Radar on Drug Benefits

The health insurer trade group AHIP recently unveiled a new advertising campaign that accuses the pharmaceutical industry of deflecting blame for its “price-gouging” practices and undermining the “evidence-based, market-driven tools” that health insurers use to keep drug costs in check. But the campaign doesn’t appear to mention PBMs, even though they’re the ones conducting drug-price negotiations with manufacturers on behalf of health plans and employers.  

Health care industry observers say that omission is unsurprising since PBMs are currently facing a growing wave of scrutiny — scrutiny that insurers likely want to minimize even if they don’t want to lobby for that explicitly. Pharmaceutical Research and Manufacturers of America (PhRMA), meanwhile, pounced on the opportunity to call out what it sees as the unspoken, PBM-supporting message in AHIP’s new campaign. 

Express Scripts and Optum Rx recently disclosed initiatives including pass-through arrangements, lower copays and price matches that they say will help clients and members save money and increase transparency. Marc Guieb, Pharm.D., a consulting pharmacist with Milliman, Inc., says the announcements are not “new or revolutionary or anything” and that they “seem to be rebranding of existing programs and products that are already offered.”

Guieb notes that the press releases are likely in response to the increasing scrutiny the PBM industry faces from politicians and others. Several Senate committees this year have introduced PBM legislation, and the Federal Trade Commission (FTC) last year opened an investigation into the business practices and consolidation of PBMs.

A new report by the Institute for Clinical and Economic Review (ICER) argues that “white bagging,” if used appropriately, could save health plans enough money to slow premium growth, but it stipulates that policy reforms and clinical guidelines are necessary to make the practice fair to patients. Health care insiders tell AIS Health, a division of MMIT, that in their view, the white paper correctly and fairly identifies both the challenges and opportunities presented by the white bagging trend.

White bagging is a payer practice that significantly changes the customary dispensing and billing arrangements around specialty drugs. Until recently, nearly every specialty pharmacy transaction involved the so-called “buy-and-bill” framework. In buy-and-bill transactions, which still account for the vast majority of specialty pharmacy care, providers purchase a specialty drug, stock it in their facility and charge a payer for it after administering the drug to a patient. White bagging, on the other hand, involves a payer purchasing a drug directly from the manufacturer, distributor, or specialty pharmacy and arranging for the drug to be delivered to the site of care. In a similar practice also covered by the ICER report, “brown bagging,” payers also purchase the specialty drug directly, but have it delivered to the patient’s home instead of the provider’s facility.

Although new treatments hold tremendous promise for addressing obesity and the myriad health issues associated with it, Medicare Part D is barred from covering them, and private insurers’ coverage is variable. And there are multiple barriers that will make fixing those coverage gaps challenging, health policy experts said during a recent panel discussion. 

Perhaps the most headline-grabbing obesity treatment is semaglutide, which Novo Nordisk sells under the brands Ozempic (for Type II diabetes) and Wegovy (for weight loss). That drug has recently been the topic of a cascade of news articles discussing the drug’s ability to help patients shed stubborn pounds, side effects such as hair loss, and shortages faced by some diabetes patients due to semaglutide’s skyrocketing popularity.