RADAR on Drug Benefits

  • Supreme Court Deals Surprise Blow to PBMs in Rutledge Ruling

    In a unanimous, earlier-than-expected decision that surprised some observers, the U.S. Supreme Court on Dec. 10 unanimously rejected a trade group’s challenge to a 2015 Arkansas law regulating PBMs. The rule paves the way for states to continue tightening the reins on the increasingly scrutinized “middlemen” in the prescription drug supply chain, provided that such measures involve rate regulation.

    The managed care industry had been closely watching the case, Rutledge v. Pharmaceutical Care Management Association (PCMA). That’s because it has implications for not only Arkansas’ Act 900 — which requires PBMs to reimburse pharmacies at no less than what pharmacies pay to acquire drugs — but also a host of other PBM-targeting measures passed by states across the country.

  • News Briefs

     Documents that will be reviewed by an FDA panel on Dec. 10 conclude that Pfizer Inc.’s vaccine for the novel coronavirus offers meaningful protection against the virus within 10 days of initial dosing, tipping agency staff’s support for an emergency use authorization (EUA) of the vaccine. The Pfizer vaccine, which requires patients to be dosed twice, demonstrates “an estimated [vaccine efficacy] of 82% against confirmed COVID-19 occurring after Dose 1 of the 2-dose regimen, with [vaccine efficacy] of 52.4% between Dose 1 and Dose 2,” according to a briefing document. The same document’s executive summary concludes that “the efficacy, safety, and immunogenicity data in this EUA application” support a positive assessment of risk and benefit for the vaccine and meet the data requirements outlined in the EUA guidance. Read more at https://bit.ly/3n6KzFM.

     The Trump administration’s recent drug-pricing regulations have met roadblocks from both the pharmaceutical industry and the Canadian government. The Pharmaceutical Research and Manufacturers of America filed suits in federal courts that challenge a rule that allows the importation of drugs from Canada and another that will tie Medicare Part B prescription drug payments to an index of drug prices that other countries pay. The Canadian health minister, meanwhile, signed an order that limits bulk drug exports. Read about the suits at https://onphr.ma/3ozz5eb and https://onphr.ma/3gtWCdL and find the order at https://bit.ly/371nvCA.

  • Oral Alternatives to Injectables Still Face Stiff Competition

    In its latest quarterly Drug Pipeline Insights Report, OptumRx includes a diverse array of medications that the UnitedHealth Group-owned PBM believes are likely to make a market impact when they’re approved by the FDA. One interesting trend that applies to three of the five highlighted drugs is the fact that each is the first oral option in its respective category.

    While oral medications tend to be thought of as more convenient than injectable or IV-administered therapies, that factor alone may not confer as much of a competitive advantage as one might think, according to one OptumRx executive.

  • Specialty Drug Spending Continues to Rise, Driven by Higher Utilization

    Per-member per-year (PMPY) specialty drug spending rose 13.6% from 2018 to 2019, according to Pharmaceutical Strategies Group’s annual report, which analyzed 45 million pharmacy claims and 54 million medical claims. Contributing to the growth was a 10.3% increase in utilization and a 3.3% rise in costs per claim. Specialty drug spending under the pharmacy benefit saw the largest increase, driven by 19.6% higher utilization of such therapies. In terms of overall cost, inflammatory disorders ranked No. 1 among all drug categories, followed by oncology and multiple sclerosis.
  • Medicaid Programs Face Gene and Cell Therapy ‘Hurricane’

    Though cutting-edge gene and cell therapies can transform patients’ lives, they’ve strained pharmacy budgets across the health care sector, and state Medicaid programs are no exception. With dozens of such therapies likely to earn FDA approval in coming years, Medicaid administrators and policy experts are working out how best to control costs and manage risk.

    Gene and cell therapies can have courses with costs in the millions of dollars for one patient. States’ Medicaid programs must cover all FDA-approved drugs, though manufacturers are required by law under the Medicaid Drug Rebate Program (MDRP) to provide Medicaid programs with the “best price” for prescription drugs — defined as the lowest available price to any wholesaler, retailer or provider, excluding certain government programs. Despite that offset, the increasing use of expensive therapies has had a dramatic effect on Medicaid budgets: in 2017, drugs costing more than $1,000 per claim accounted for 43.7% of all Medicaid drug spending, according to an opinion piece published in the Journal of the American Medical Association (JAMA) on Oct. 11.

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