Radar on Drug Benefits
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Cancer, Neurology Drugs Lead 2020 Pharma Pipeline
In its quarterly drug pipeline trends report, OptumRx projected that 2020 will see large numbers of drug approvals for oncology drugs and identified 11 drugs with the potential to be blockbusters in the United States.OptumRx, which is owned by UnitedHealth Group, sorted the drugs likely to be approved this year into 17 treatment categories. Cancer-treating drugs were by far the most prevalent, with 44 likely approvals. Neurology followed with 29.
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PBM Integration Helps Drive Solid 2019 Earnings, Execs Say
The health care industry’s largest payers continue to make the case that they are gaining — or project to gain — substantial benefits from integrating PBM businesses.
In particular, Cigna Corp. expects its integration of PBM Express Scripts to drive substantial prescription claim growth in the coming year, and Humana Inc. projects cost savings from its recent acquisition of hospice-focused PBM Enclara Pharmacia Inc.
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Payers Test Ways to Control Rising Cost of Diabetes Drugs
With the cost of diabetes drugs still growing, PBMs and payers are looking for more innovative strategies to hold down costs. For some, that might include a strategy similar to the one recently unveiled by CVS Health Corp.’s Caremark unit. The plan, called RxZERO, offers a slimmer formulary for the diabetes drug class, but with no out-of-pocket costs for members. CVS says employers or insurers that pick this plan should expect to save about $30 annually per member.
Mike Schneider, a principal in the commercialization and market access practice at Avalere Health, says the plan is innovative. “You’ve seen Express Scripts do something where they’re offering specific insulins at very low out-of-pocket costs, but this is the first time I’ve seen a PBM come up with a way to eliminate out-of-pocket costs completely,” he tells AIS Health.
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CMS Backs Closed Medicaid Formularies…But Are They Legal?
As part of long-awaited guidance that CMS issued to states on Jan. 30 outlining how they can test-drive a fixed federal Medicaid budget and more program flexibilities, the Trump administration invited states to try out something else that hasn’t been done before: implement a closed drug formulary for a portion of their Medicaid population.
“For the first time, participating states will have more negotiating power to manage drug costs by adopting a formulary similar to those provided in the commercial market, with special protections for individuals with HIV and behavioral health conditions,” CMS said in its press release unveiling the Healthy Adult Opportunity (HAO) demonstration, which states can apply for via a Section 1115 Medicaid waiver.
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News Briefs
✦ The Supreme Court has agreed to hear a case that ultimately could upend state-based efforts to regulate PBMs. The lawsuit, which was brought by the Pharmaceutical Care Management Association (PCMA), challenges a 2015 Arkansas law that requires PBMs to reimburse pharmacies at or above their wholesale cost for generic drugs. The case boils down to whether PBMs are acting as agents under the Employee Retirement Income Security Act of 1974 (ERISA) and therefore are exempt from state-level regulation, or whether they are a “non-interested party and therefore subject to regulation,” says Jeff Myers, founder of health care consulting firm OptDis. He tells AIS Health that he believes it’s likely the high court will side with PCMA and the PBM industry, agreeing that ERISA bars state laws like the one at issue in Arkansas. View court documents related to the case at https://bit.ly/3aCjOmw.
✦ Democrats and Republicans on the House Energy and Commerce Committee sent FDA Commissioner Stephen Hahn a joint letter asking why generic drug approvals are so slow. Members cited EpiPen, noting that the drug took 10 years to approve in the FDA’s expedited track, and mentioned a 2018 Government Accountability Office report that recommended the FDA offer more guidance to pharma. The FDA only issued five of a possible 28 complex generic drug approvals in fiscal year 2017. View the letter at https://bit.ly/2REbyKh.
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