Radar on Drug Benefits

For two of the largest diversified health care companies, their PBM divisions were a much-touted highlight in the firms’ first-quarter 2021 earnings reports and conference calls.

Cigna Corp. Chief Financial Officer Brian Evanko, during a May 7 conference call with analysts and investors, said the firm’s “favorable first-quarter earnings were primarily driven by strong Evernorth performance, favorable net investment income, and favorable prior year medical cost development.” Evernorth is Cigna’s newly renamed health services division, housing its Express Scripts PBM and other assets.

Dupixent (dupilumab), the first biologic approved for atopic dermatitis (AD), hasn’t shaken up treatment of the condition completely even as it steadily gains market share, since the bulk of plans still require patients to try mostly generic topical corticosteroids (TCSs) and topical calcineurin inhibitors (TCIs) first. But more competition could be coming to this category, with the FDA set to consider four new products for AD, including three Janus kinase (JAK) inhibitors.

The oral JAK inhibitors hit a speed bump in April: The FDA extended the review period to early in the third quarter of 2021 for Pfizer Inc.’s abrocitinib for the treatment of adults and adolescents with moderate to severe AD. The agency also extended review to the third quarter of Eli Lilly and Co.’s and Incyte’s supplemental New Drug Application for Olumiant (baricitinib) for the treatment of adults with moderate to severe AD, saying it wants to gather additional cost-benefit and safety data.

Work on drug pricing legislation is underway in Congress, with two House committees holding hearings on the topic in May. The most likely changes are PBM regulation, lowering out-of-pocket costs for Medicare Part D beneficiaries, allowing HHS to negotiate drug prices for Medicare patients, and limiting year-to-year price hikes to no more than the rate of inflation.

While all those policies are on the table, it’s unlikely that all of them would make it through Congress. Majority Democrats have few votes to spare, which means party-line legislation would have to pass through the Senate’s budget reconciliation process in a blockbuster bill that is mainly focused on a Biden administration priority like infrastructure. However, insiders expect the House to pass some version of legislation based on H.R. 3, the Lower Drug Costs Now Act, which includes Part D reform, drug price negotiation and inflation caps. New PBM regulations similar to those proposed by retired Sen. Lamar Alexander (R-Tenn.) in the 116th Congress, including requirements that PBMs pass through all rebate revenue and disclose all negotiated prices to plan sponsors, are under discussion, according to insiders.

✦ The state budget recently unveiled by New York Gov. Andrew Cuomo (D) would delay the state’s move to carve out pharmacy benefits from its Medicaid managed care contracts, Modern Healthcare reported. Instead of starting April 1 of this year, the passed health budget bill would make the change no earlier than April 1, 2023. The New York Health Plan Association has been vocal in its opposition to the move, claiming it could thwart care coordination efforts by plans (RDB 1/28/21, p. 1). Read more at https://bit.ly/2QlSQue.

✦ An analysis by Blues affiliate- owned PBM Prime Therapeutics found that an average course of chimeric antigen receptor T-cell (CAR-T) therapies for B-cell lymphoma cost $700,000, and in some cases exceeded $1 million. The analysis reviewed records from 74 members, and found that 39% of patients did not have a “durable CAR-T response, with chemotherapy being the most [subsequent] common event (30%) and 1 in 20 going on to have a bone marrow transplant.” Read more at https://bit.ly/2QdmJNn.

An April 19 analysis by the Kaiser Family Foundation (KFF) found that a small number of drugs accounted for the majority of spending in Medicare, and that drug pricing negotiation could lower overall spending in the program. Negotiating drug prices for Medicare has become a hot topic in health care policy circles, and it is one of the options on the table as Congress considers options to control drug costs (RDB 3/25/21, p. 1).

According to the report, the 250 top-selling drugs in Medicare Part D with one manufacturer and no generic or biosimilar competition accounted for 60% of net total Part D spending, while the top 50 drugs covered under Medicare Part B accounted for 80% of total Part B drug spending (see infographic, p. 6).