Radar on Drug Benefits

Payers shouldn’t write off the idea of value-based pricing for COVID-19 vaccines and therapeutics, even though the ongoing coronavirus pandemic makes it imperative to develop and release those products as quickly as possible, four Tufts Medical Center researchers say.

The researchers, writing in the January edition of Health Affairs, say payers should consider value from both a health system and a societal perspective.

In addition to creating “one of the nation’s largest behavioral health platforms,” Centene Corp. will add another pharmacy-related asset to its portfolio with its recently announced $2.2 billion proposed purchase of Magellan Health, Inc.

The deal, unveiled on Jan. 4, will deliver 2 million PBM members and 16 million medical pharmacy lives to Centene, which already has a variety of internal and external PBM relationships. And while those pharmacy lives are just a slice of the transaction compared with the behavioral health and specialty health assets that Centene will get by purchasing Magellan, they are a key part of the strategic rationale for the deal.

When CMS on Jan. 8 approved Tennessee’s Section 1115 Medicaid waiver — making it the first state to try an “aggregate cap” approach to Medicaid financing — the agency also took the unprecedented step of authorizing Tennessee to set up a “commercial-style” closed drug formulary while still receiving statutory Medicaid drug rebates for covered drugs.

“I think this piece will be particularly controversial and potentially quite ripe for litigation,” says Jocelyn Guyer, a managing director with Manatt Health. “It’s a foundational change that we’ve never seen before in a Medicaid waiver.”

In the year ahead, Trump administration drug pricing policies are likely to be changed or revoked by the incoming Biden administration and court challenges, although which policies will be affected — and to what extent — is still unclear, policy experts tell AIS Health. Meanwhile, the violent attack on the Capitol by supporters of President Donald Trump may have poisoned bipartisan efforts to reform drug pricing before Congress had a chance to take them up.

These uncertainties are a challenge for PBMs, according to experts. Brian Anderson, a principal at Milliman Inc., observes that firms have to act as though they will need to comply with the Trump administration’s rules, even if there is consensus that the new administration will make changes. Anderson also notes that PBMs and plans are managing the transition amid the most challenging plan year rollover in recent memory.