Radar on Drug Benefits
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Optum Rx’s PBM Pricing Model May Have Hidden Costs
Experts say they’re skeptical that a pricing tool unveiled on May 20 by Optum Rx, UnitedHealth Group’s PBM division, will make significant changes to the PBM business model or generate major savings for plan sponsors. Indeed, some experts say that the model, Clear Trend Guarantee, could in practice be used to obscure rebate revenue that plan sponsors would otherwise collect.
According to a UnitedHealth press release, the new product “combines guarantees into a single per member cost” that “will offer drug benefit plan sponsors greater predictability of pharmacy spend to help manage total lowest net cost.”
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More MA Enrollees Are Facing Step Therapy Requirements for Part B Drugs
Over half of Medicare Advantage enrollees were in plans that applied step therapy to the 10 most commonly used rheumatoid arthritis (RA) medications covered by Medicare Part B in 2023, according to a recent Avalere analysis.
Since 2019, CMS has given MA plans the ability to use step therapy protocols — meaning a patient may be required to try a less expensive drug before moving to the more expensive one — for physician-administered and other Part B medications. Avalere analyzed MA plans’ annual medical policy and formulary restrictions for 22 RA drugs from 2018 to 2023 and found that the percentage of MA beneficiaries in plans that use step therapy has increased steadily since 2019. For two of the drugs studied, 78% of enrollees were in MA plans that applied step therapy in 2023.
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News Briefs: State Officials Urge SCOTUS Review of PBM Regulation Case
A bipartisan group of state attorneys general recently filed an amicus brief with the Supreme Court, asking it to review an appeals court decision that limited states’ ability to regulate PBMs. In August 2023, the U.S. Court of Appeals for the Tenth Circuit ruled to block an Oklahoma law that contained provisions such as setting uniform standards for pharmacy networks and banning PBMs from using discounts to drive customers to pharmacies owned by their parent companies. That ruling was the result of a challenge to the Oklahoma law brought by the Pharmaceutical Care Management Association (PCMA). In PCMA v. Mulready, the PBM trade group argued that Oklahoma’s law is preempted by the Employee Retirement Income Security Act of 1974 (ERISA) and the statues governing Medicare Part D. But in their brief urging the Supreme Court to review the case, Minnesota Attorney General Keith Ellison (D) and his colleagues argue that the Tenth Circuit’s broad approach to federal preemption would “severely and unduly impede states’ abilities to protect their residents and regulate businesses.” In a similar case regarding an Arkansas law regulating PBMs, Rutledge v. PCMA, the Supreme Court rejected the PBM trade group’s ERISA-preemption argument.
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Plans Take Wait-and-See Approach to Vendors Promising Help With Weight Loss Medication Costs
As the use of and interest in GLP-1 medications for weight loss increases, numerous vendors are pitching self-insured health plans on solutions to manage the demand and high costs of the medications. However, benefits experts say employers are approaching these outside companies with caution and are still trying to figure out how to manage the significant expenses associated with GLP-1 drugs.
Chantell Sell Reagan, Pharm.D., WTW’s national pharmacy clinical leader, estimates that about 25 to 30 vendors are marketing solutions to employers to help with FDA-approved weight loss medications such as Novo Nordisk’s Wegovy (semaglutide) and Eli Lilly & Co.’s Zepbound (tirzepatide). Wegovy and Zepbound are also approved to treat type 2 diabetes under the brand names Ozempic and Mounjaro, respectively.
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Studies: IRA Will Spur Medicare Biosimilar Adoption — and Shift Costs to Part D Plans
Medicare Part D plans are likely to revise their biosimilar formulary management policies as a result of recent regulatory changes, not least the Inflation Reduction Act (IRA). With the IRA-mandated overhaul of the Part D benefit taking effect year, Part D payers will be on the hook for a greater share of catastrophic drug costs, which are likely to include biosimilars.
A study in Health Affairs released in May makes the case that the longstanding gap in the coverage of biosimilar products between employer-sponsored insurance plans and Medicare Part D plans is likely to shrink in 2025, when several key components of the IRA take effect.
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