Radar on Drug Benefits

  • News Briefs

     Humana Inc. and its PBM and pharmacy subsidiaries, alongside Roche Diagnostics Corp. and Roche Diabetes Care, Inc., agreed to pay $12.5 million to settle a lawsuit that claimed they engaged in fraud and illegal kickbacks. The settlement, unveiled on Feb. 8, resolves a whistleblower’s allegations that Roche forgave millions of dollars’ worth of debt from Humana in exchange for the insurer purchasing Roche’s diabetes testing supplies and favoring them in its Medicare Advantage plan formularies. Read more at https://bit.ly/3jBVTIU.

     Included in House Democrats’ evolving budget-reconciliation bill for COVID-19 relief is a provision that would lift the cap on rebates in the Medicaid Drug Rebate Program. Currently, that cap is set at 100% of a drug’s Average Manufacturer Price, and proposals to increase or eliminate the cap would “generate savings for the program and lower revenues for drug manufacturers,” according to a Kaiser Family Foundation issue brief. The provision in House Democrats’ COVID-relief bill is slated to go into effect in 2023 if it makes it into the final version of the legislation. View the provision at https://bit.ly/3a8tmrb.

  • Humana Joins Cigna’s GPO For Commercial Members

    Humana Inc. entered an agreement with Cigna Corp. to join a group purchasing organization (GPO) for prescription drugs called Ascent Health Services, a Switzerland-based subsidiary of Cigna’s Express Scripts PBM. Humana representatives said the move would give the insurer more clout in negotiations with pharmaceutical manufacturers, but critics of the accelerating GPO trend (RDB 8/13/20, p. 1) say that the agreements are a way for carriers and PBMs to capture rebate revenue that should flow to plan sponsors by increasing pricing opacity and complexity.

    “This arrangement will help us leverage scale and buying power to extract deeper price discounts from drug manufacturers and advance affordability for our customers while at the same time preserve our ability to address their specific clinical needs,” a Humana spokesperson told AIS Health via email. The agreement only applies to Humana’s commercial group plan members, which comprise a small percentage of the Medicare-focused insurer’s total covered lives.

  • Biosimilar Uptake Is More Related to Practice Setting Than Patient, Physician Characteristics

    Practice setting and hospital outpatient ownership status had the strongest associations with the adoption of the first three biosimilars launched in Medicare, according to a recent study published in JAMA Network Open. By analyzing use of the biosimilar versions of filgrastim and infliximab among more than 40,000 Medicare fee-for service beneficiaries, the study found that patient and physician characteristics did not strongly correlate with whether a patient received a biosimilar. While the setting of administration had the greatest association with biosimilar uptake, the direction of association differed by drug class. For instance, a patient in a hospital outpatient setting was 16 percentage points less likely to receive a filgrastim biosimilar than a patient in an office setting, but 3 percentage points more likely to receive an infliximab biosimilar.
  • Diversified Insurers Remain Bullish on Pharmacy Holdings

    Although the fourth quarter of 2020 brought financial challenges for some health insurers due to surging coronavirus infections, the pharmacy-focused divisions of those publicly traded firms seemed to provide a universal bright spot.

    Cigna Corp., for example, saw its stock prices slide after its fourth-quarter earnings came in below Wall Street’s expectations — a result the company attributed in part to COVID-19-related costs outpacing the financial benefits of deferred care. But Cigna also reported that for its health services segment Evernorth — which houses its PBM — full-year 2020 adjusted revenues increased 20% compared with 2019, reaching $30.5 billion. Those results were driven by “ongoing strong retention, the completion of insourcing Cigna volumes and organic growth, including our partnership with Prime Therapeutics,” Cigna CEO David Cordani said during the company’s Feb. 4 earnings conference call.

  • As Authorized Generics Proliferate, Benefits Are Unclear

    Pharmaceutical manufacturers likely will continue to turn to authorized generics — drugs produced by brand-name drugmakers without the brand label — as they face increased pushback against high drug prices, but payers and patients probably won’t see much benefit as a result, according to industry experts.

    “I think we will continue to see authorized generics competing with traditional generics,” says Stacie Dusetzina, Ph.D., associate professor of health policy at Vanderbilt University School of Medicine. “I’m hopeful that we will see fewer signs that they are being used in pay-for-delay types of arrangements or to discourage traditional generic competition.”

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