Radar on Drug Benefits

If the new Congress agrees with some Republican lawmakers’ view that the Medicare Part D Premium Stabilization Demonstration is a “taxpayer-funded bailout” for health insurers, it can either defund the program or limit CMS’s authority to create such demonstrations in the first place, pointed out a recent report from the Congressional Research Service (CRS).  

However, one health policy expert says that any action regarding the controversial demonstration is more likely to come from CMS than from Congress. 

The Nevada Division of Insurance is seeking public comment on proposed updates to its essential health benefits benchmark plan, which would require Affordable Care Act exchange plans sold in the state to expand their prescription drug coverage. The Division of Insurance is considering selecting a new set of benefits to become its new benchmark plan and must seek public comment under CMS rules. The state is considering adding all FDA-approved drugs to treat opioid use disorder; all approved drugs to test, treat and prevent HIV; and all approved drugs to test, treat, and prevent hepatitis B and C. The deadline for submitting comments is March 9. 

A couple in Wisconsin filed suit against Walgreens and UnitedHealth Group’s Optum Rx PBM after their son’s death following a $500 surge in his asthma medication’s price. The Associated Press reported that Shanon and William Schmidtknecht filed the lawsuit a year after their 22-year-old son died of an asthma attack after he could not afford to refill his medication. The suit alleges the pharmacy and PBM did not give him advance notice that his out-of-pocket costs for Advair Diskus were increasing from $66 to $539. He suffered a fatal asthma attack several days later. They also claim the price was increased without a valid medical reason. 

Shortly after taking office, President Donald Trump on Jan. 20 rescinded numerous executive orders that were put in place under his predecessor, Joe Biden — including one that led to the introduction of three CMS drug pricing pilot programs. However, experts say it's still unclear what Trump’s move indicates for the future of the models.  

Biden issued his order in October 2022 to address lowering prescription drug costs through the CMS Center for Medicare and Medicaid Innovation (CMMI). In February 2023, CMMI announced three models under consideration, including the Cell and Gene Therapy (CGT) Access Model, the Accelerating Clinical Evidence Model and the Medicare $2 Drug List Model. The CGT model is the furthest along and is set to launch this year, while the other two models are still in the planning stages. 

The Cigna Group and Cigna Health & Life Insurance Company last month joined a lawsuit against the Minnesota Dept. of Commerce, claiming the state’s PBM reform law violates a legal concept known as ERISA pre-emption. And it isn’t the only state-level PBM law that the ERISA Industry Committee (ERIC) is targeting for possible legal challenges, the powerful employer group tells AIS Health. 

Cigna, ERIC and the National Labor Alliance of Health Care Coalitions filed the complaint in federal court on Dec. 27, alleging the law dictates the design of health plans, including self-insured plans that fall under the jurisdiction of the federal Employee Retirement Income Security Act of 1974 (ERISA). 

In a move endorsed by its new chairman, the Federal Trade Commission (FTC) on Jan. 14 issued its second interim staff report on PBMs, this time finding that the country’s three largest firms significantly marked up specialty generic drugs dispensed by their affiliated pharmacies.  

The PBM industry’s main trade group, the Pharmaceutical Care Management Association (PCMA), says the FTC’s report is making “sweeping assertions about the role of PBMs disconnected from a full appreciation of their critical cost-saving role for employers, unions, taxpayers, and patients.”  

Yet one equities analyst who focuses on the health care industry recently suggested to investors that the FTC may very well be onto something.