Radar on Drug Benefits
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Experts: COVID May Cause Permanent Rx Delivery Changes
Industry experts expect the COVID-19 pandemic and related economic crisis, in addition to the trend of vertical integration in the PBM sector, will increase those companies’ direct interaction with consumers. The crisis has so far spared the margins of insurance companies, but it has forced patients to change their behavior toward medicine as jobs are lost and quarantine becomes a way of life.
The recent wave of payer acquisitions of PBMs has kept the latter on strong footing despite the crisis. CVS Health Corp.’s Caremark, UnitedHealth Group’s OptumRx and Cigna Corp.’s Express Scripts control approximately 74% of the market, according to a January 2020 estimate by Drug Channels Institute CEO Adam Fein, Ph.D. Each parent company posted strong first-quarter 2020 results and maintained its earnings guidance through the rest of the year.
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With Costco Now in its Corner, PBM Navitus Thinks Big
Serving just 6.2 million members, Navitus Health Solutions — a PBM owned by St. Louis, Mo.-based integrated health system SSM Health — is hardly one of the industry’s major players. But given that it features a “pass-through” business model in an era when opaque PBM structures are facing scrutiny, and Costco Wholesale Corp. recently purchased a minority stake in the firm (RDB 3/12/20, p. 3), Navitus may be poised for a bigger spotlight.
Just ask David Fields, who in late April was named the PBM’s new CEO after serving on an interim basis after Navitus’ former chief executive stepped down due to health issues. Fields — who joined SSM Health in 2018 as president of its Dean Health Plan and has held leadership roles at Blue Shield of California and Aetna Inc. — tells AIS Health that what he likes best about Navitus is how it differs from some of its peers.
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Potential COVID-19 Treatments’ List Prices vs. Minimum Manufacturing Costs
On May 1, the FDA authorized Gilead Sciences, Inc.’s experimental antiviral drug remdesivir for emergency use in seriously ill COVID-19 patients. A 10-day course of remdesivir could cost around $4,500 if the drug is able to reduce mortality, according to the Institute for Clinical and Economic Review. Meanwhile, a recent study published in the Journal of Virus Eradication showed that the drug’s minimum estimated cost of production is $9 per person. The researchers looked at the list prices of nine leading drugs that may be able to treat COVID-19, and calculated the minimum costs required to produce them based on the price of active pharmaceutical ingredients. Current list prices of all medications are significantly higher than the production costs, especially in the U.S. Graphics below show how seven drugs’ list prices in the U.S. compare with other countries.
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PBMs Post Strong 1Q, but Questions Loom About Rest of 2020
Major PBMs reported strong results for the first quarter of 2020 as members rushed to fill prescriptions in March ahead of the COVID-19 pandemic. However, financial analysts warn the pandemic could have unpredictable effects on PBMs for the rest of 2020 and moving into 2021.
The 2021 PBM selling season could be disrupted in still-unknown ways, analysts said, and members are cutting back on routine physician visits and elective procedures, resulting in lower script volume overall.
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News Briefs
✦ Recent developments related to Gilead Sciences Inc.’s antiviral drug remdesivir indicate that it could be a promising treatment for COVID-19. In a New England Journal of Medicine paper published on April 10, researchers reported that clinical improvement was observed in 36 out of 53 (or 68%) of COVID-19 patients who were given remdesivir on a compassionate-use basis. Then on April 16, Stat published an article offering an early look at results from Gilead’s two Phase III clinical trials on remdesivir, which it conducted on 125 COVID-19 patients being treated at the University of Chicago Medical Center. The news outlet reported that the hospital saw rapid recoveries in fever and respiratory symptoms among patients treated with the drug, with nearly all patients discharged in less than a week. View the NEJM paper at https://bit.ly/2KplOmd and the Stat article at https://bit.ly/3br9rSP.
✦ Novartis AG said on April 20 that the FDA will allow it to proceed with a Phase III clinical trial in which it will test the anti- malarial drug hydroxychloroquine on hospitalized patients with COVID-19. Sandoz, the generics and biosimilars division of Novartis, will supply hydroxychloroquine for the clinical trial, which the Swiss drugmaker said will be “conducted at more than a dozen sites in the United States” and begin enrolling patients within the next few weeks. Demand for hydroxychloroquine and its more potent cousin, chloroquine, surged after President Donald Trump touted early evidence that it could be a promising treatment for COVID-19, causing major PBMs to restrict dispensing such drugs to prevent stockpiling for off-label uses (RDB 4/9/20, p. 1). Meanwhile, a recent study conducted on 368 COVID-19 patients at U.S. veterans hospitals “found no evidence that use of hydroxychloroquine, either with or without azithromycin [an antibiotic], reduced the risk of mechanical ventilation” for those patients. Read more at https://bit.ly/3eFkPMN and https://bit.ly/3bx5eg6
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