Radar on Drug Benefits

  • After Aduhelm, Congress May Revamp Accelerated Approvals

    The FDA’s accelerated approval of Alzheimer’s drug Aduhelm (aducanumab) last year was extremely controversial, prompting harsh criticism and calls for reform of the accelerated approval process itself. Congress has taken up the issue and is considering one bill from each major party that would revamp the process in the hope of addressing concerns that the pathway has allowed flawed drugs to stay on the market without being revisited.

    Medical research and health care policy experts have raised a number of critiques of the current accelerated approval framework. Two critiques stand out: The first concerns the quality of data used in measuring the effectiveness of accelerated approval drugs. After a drug is granted accelerated approval, the FDA mandates that the drug be evaluated using confirmatory clinical trials. Experts have criticized the quality of data collected for accelerated approval drugs; in particular, the measurements used to gain approval for Aduhelm were heavily criticized by clinicians.

  • Walgreens Faces Another ‘Usual and Customary’ Fraud Suit

    Several Blue Cross and Blue Shield affiliates sued Walgreens Boots Alliance Inc. on March 15, alleging that the retail pharmacy giant fraudulently overcharged them and their members for generic drugs over the course of “more than a decade.” The suit follows years of similar allegations from multiple payers, including federal health insurance programs. One legal expert tells AIS Health, a division of MMIT, that the current litigation has the potential to expose Walgreens to years of legal risk.

    In the suit, three Blues affiliates — CareFirst, Blue Cross and Blue Shield of South Carolina and Blue Cross and Blue Shield of Louisiana — allege that Walgreens systematically and fraudulently charged the health plans inflated prices for generic prescription fills. The health plans claim that their contracts with Walgreens entitled them to reimburse the pharmacy for drug fills at the lowest price that Walgreens charged for the drug in question, an arrangement called “usual and customary” pricing. The plans allege that, despite those agreements, Walgreens allowed members of its prescription drug savings club to pay less than Blues plan members for the same drug — and intentionally withheld information from the plans to avoid changing the usual and customary price.

  • Part D Out-of-Pocket Cap: Limited Impact, Low Cost

    A small share of Medicare Part D beneficiaries without access to the low-income subsidy (LIS) program would benefit from the introduction of a $2,000 out-of-pocket (OOP) spending cap for prescription drugs, a provision that is included in the Build Back Better Act, according to a recent Urban Institute analysis. In 2019, a $2,000 cap could have saved approximately 866,000 non-LIS Part D enrollees about $900 each, on average. There are 32.8 million total non-LIS enrollees in the Part D program. The cap would carry a small price tag, increasing total Part D expenditures by $782 million in 2019 and the premium across all Medicare beneficiaries by $4.35 annually. The study concluded that capping out-of-pocket costs for certain Part D beneficiaries would enhance the program without significantly raising costs.
  • News Briefs: Centene Appoints New CEO Amid PBM Overhaul

    Centene Corp. has named Sarah London as its new CEO after its longtime chief executive, Michael Neidorff, took a medical leave of absence ahead of his planned retirement. London, who was serving as Centene’s vice chairman, will take the helm immediately. In her previous management role, London was responsible for a “portfolio of companies independent of Centene’s health plans, designing differentiated platform capabilities, and delivering industry-leading products and services to third-party customers,” per a March 22 press release. Before coming to Centene, she worked for UnitedHealth Group’s venture capital arm, Optum Ventures, and its data solutions division, Optum Analytics. London’s appointment comes at a time when Centene is planning an overhaul of its PBM assets, with a request for proposal seeking an external vendor due this summer. The firm in recent months has paid millions of dollars to settle accusations by states that its PBM operations overcharged their Medicaid programs for prescription drugs. During Centene’s Feb. 8 conference call to discuss fourth-quarter and full-year financial results, London told analysts that “the strategy here is to outsource administrative PBM functions to an external partner, thereby allowing us to reduce our three PBM platforms down to one and to focus...[on] clinical member and provider engagement.”
  • Inflation Rebates Would Cost Manufacturers Millions, Studies Say

    Drug manufacturers would be on the hook to pay the federal government hundreds of millions of dollars in rebates per year should the Build Back Better Act (BBBA) — and a key inflation-based penalty provision within it — become the law of the land. The breadth of the penalties, however, hinges on various factors, including the current runaway rate of inflation.

    While the BBBA, passed by the House in November 2021, remains stalled, lawmakers have expressed a renewed sense of interest in picking up the pieces following President Joe Biden’s March 1 State of the Union address.

    A previous holdout to the Democrats’ wide-ranging spending plan, Sen. Joe Manchin (D-W.V.) recently issued an informal counteroffer to Biden’s speech, calling for prescription drug spending to remain central to any legislation that moves ahead.

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