Radar on Drug Benefits

CVS Health Corp.’s Caremark is the latest big PBM to offer clients new pricing models that the company claims will increase transparency and reduce overhead. Experts say that the new offerings are not as transparent as CVS claims they are, and constitute a response to various pressures including likely federal PBM reforms, scrutiny from plan sponsors and disruptive business trends like the growth of Mark Cuban Cost Plus Drug Co.

Most experts expect that the new CVS offerings, called CostVantage and TrueCost, will only make a marginal difference — if any — in either drug costs or price transparency. Industry observers point to similar product rollouts by the other two of the Big Three PBMs, UnitedHealth Group’s Optum Rx and The Cigna Group’s Express Scripts, neither of which seemed to dampen the firms' PBM earnings. Express Scripts’ ClearCareRx and Optum Rx’s Cost Clarity launched in April and May, respectively. Express Scripts also rolled out a new “cost-plus pharmacy pricing” option, called ClearNetwork, in November.

In a move decried by the major PBM trade group but hailed by employer plan sponsors and a pro-reform coalition of smaller PBMs, the U.S. House of Representatives on Dec. 11 passed legislation that would usher in a host of new transparency requirements for what has become a heavily criticized industry.

The Lower Costs, More Transparency Act (H.R. 5378) passed on a 320-71 vote, but an uncertain fate awaits the measure in the Senate. The bill was initially due to be voted on in September but was tabled amid concerns over lawmakers’ support and the House’s focus at the time on passing a stopgap government spending package.

In the latest version of its annual Unsupported Price Increases (UPI) report, the Institute for Clinical and Economic Review (ICER) found that eight high-expenditure drugs with substantial, unjustified net price increases in 2022 cost insurers and patients nearly $1.3 billion.

“After some reduction in net price increases last year, we're again seeing many increases in net prices for drugs with large budget impacts,” ICER Chief Medical Officer David Rind, M.D., tells AIS Health, a division of MMIT. However, Rind says that recent legislative changes could make a difference in future years.

The recent approvals of the first two gene therapies for sickle cell disease represent potential major breakthroughs for patients who have faced significant burdens associated with the condition. However, there are still questions about how and whether payers will cover the high-cost treatments and how many patients will be open to taking the new treatments.

The FDA on Dec. 8 approved Casgevy (exagamglogene autotemcel) from CRISPR Therapeutics and Vertex Pharmaceuticals Inc. and Lyfgenia (lovotibeglogene autotemcel) from bluebird, Inc. for patients who are 12 or older and have recurrent vaso-occlusive events (VOEs), the term for severe pain and organ damage. The agency noted about 100,000 people in the U.S. have sickle cell disease and that VOEs “can lead to life-threatening disabilities and/or early death.”

Payers covering 81% of commercial lives have implemented copay accumulator programs as of September 2023, compared with 89% in 2022, according to data collected by MMIT (AIS Health’s parent company) on 35 insurers and PBMs representing 117.8 million lives. Payers covering 71% of people were enrolled in plans with copay maximizers, down from 76% in 2022. However, on average, payers anticipated a 30% increase in the number of plan sponsors opting into such programs next year and a 14% increase in member enrollment in plans with copay accumulators and maximizers.