Stelara Formulations, White Bagging Bring Complexity to IRA Negotiated Drug List

As CMS engages in the initial round of Inflation Reduction Act (IRA)-mandated drug price negotiations with manufacturers, one of the agents on the list of Medicare Part D drugs to be negotiated has certain aspects that make it a not-so-straightforward candidate. Stelara (ustekinumab) from the Janssen Pharmaceutical Companies of Johnson & Johnson has particular qualities that could result in unintended consequences, asserts one industry expert.

Stelara is unique among the first drugs to be negotiated in that it is available in both subcutaneous and intravenous formulations. The human interleukin-12 and -23 antagonist is approved for subcutaneous use for the treatment of people at least 6 years old with moderate to severe plaque psoriasis who are candidates for phototherapy or systemic therapy and people at least 6 with active psoriatic arthritis. It also is approved for the treatment of adults with moderately to severely active Crohn’s disease and adults with moderately to severely active ulcerative colitis, for whom treatment is initiated with a single intravenous dose, followed by subcutaneous maintenance dosing.

For 2026 and 2027, negotiated drug prices will be for self-administered products that fall under Medicare Part D. Starting in 2028, provider-administered Part B drugs will be included in the process. But has that distinction been blurred a bit with Stelara?

During CMS’s Nov. 14 patient-focused listening session for Stelara, Madelaine A. Feldman, M.D., a clinical assistant professor of medicine at Tulane University School of Medicine and provider with The Rheumatology Group in New Orleans, pointed out that the practice of white bagging “has the effect of making provider-administered drugs that are administered in-office appear as Part D drugs because they're filled via specialty pharmacy rather than provider-acquired. Simply put, white bagging puts Part B drugs in Part D clothing.”

Feldman, who is also immediate past president of and current vice president of advocacy and government affairs for the Coalition of State Rheumatology Organizations (CSRO), maintained that specialty pharmacy-filled Part B drugs should be kept separate from traditional self-administered Part D medications and offered two methods by which this could be achieved:

(1) Merging the prescription drug event (PDE) data with Part B claims data. “A mechanism exists to do this since the agency is already using PDE data combined with Part B claims data to implement the low spend Medicare drug exclusion,” she explained.

(2) Revise the PDE collection tool to include information indicating that white bagging was used.

“If CMS does not exclude white bag drugs from the Part D side for the purposes of the negotiation program, then PBMs [and] specialty pharmacies will be able to access maximum fair prices, potentially leading to an increased prevalence of white bagging, which has an entire list of problems associated with it that are bad for beneficiaries and program stewardship,” asserted Feldman.

She tells AIS Health, a division of MMIT, that those issues include potential delays in care since drugs will not be shipped until patients have paid their bill. And unlike buy and bill, when a provider purchases medications and stores them until they are ready for use, white bagging can also result in treatment delays when dose changes occur, since white bagging includes a specific dose for a specific patient. In addition, “if the drug choice changes or the patient has to stop that drug for other reasons, all of that medicine goes to waste because it cannot be given to another patient.” She also maintains that white bagging costs more for self-insured employers, making it a fiduciary issue if they are mandating the practice.

White Bagging Impacts SAD List

White bagging also has implications for the Medicare self-administered drug (SAD) exclusion list, she stated. When a drug is self-administered more than 50% of the time, it can be placed on the SAD list, which means that the drug cannot be covered under Part B. “With white bagging falsely elevating Part D usage, this could result in the loss of coverage for Part B medications for many more folks who can't administer due to disability,” she said during the session. “Essentially, if specialty pharmacies can access MFPs [maximum fair prices] on these dual-administration drugs, it could increase white bagging, making it appear as though these medications are self-administered more than half the time when they are not, merely filled by specialty pharmacy.”

In 2021, Medicare added Stelara to the SAD list. However, contends Feldman, that should not have happened.

“According to the Medicare policy manual, for a drug to be considered ‘self-injectable,’ it had to be administered by the patient, not the spouse, friend, neighbor or brought to the doctor's office,” she explains. But a CSRO survey found that only 60% of Part D Stelara patients injected themselves — a potentially difficult task due to joint pain and swelling — a finding echoed in a Johnson & Johnson survey of “thousands” of Medicare patients, says Feldman. And “Stelara subcutaneous is much more difficult to self-inject than a pen, so the number is probably higher,” she adds.

Those self-administration findings, she says, “would have changed the threshold for Stelara going on the SAD list.”

In an April 26, 2021, letter to CMS, CSRO called for an overhaul of the SAD list: “CMS’ SAD List policies have not kept pace with real-world use of medicines that have multiple indications and formulations. Specifically, they have the unintended consequence of discriminating against patients who are unable to self-administer certain medications based on their disease. For this reason, CMS should eliminate the SAD List concept and establish a new policy that better accounts for innovation in medication therapy.”

In CSRO’s comments on the 2024 Physician Fee Schedule, submitted Sept. 11, 2023, it maintained that “CMS’ interpretation and implementation of the [SAD] statute hinders access and exacerbates disparities in the care and treatment of rheumatologic conditions, and directly conflict with this Administration’s efforts to improve health equity and drug affordability.”

The group pointed out that CMS has not provided Medicare administrative contractors instructions on accounting for patients who “have a disability or face other social and economic challenges that limit access to the self-administered formulation” and urged the agency to “reconsider” its policies for the SAD list to address such situations. “While not intentional, this policy inadvertently discriminates against beneficiaries with chronic illnesses who are unable to obtain and/or utilize the self-administered formulation of a drug.”

Did White-Bagged Stelara Impact IRA List Inclusion?

So is it possible that CMS considered income from both self-administered and white-bagged Stelara when it put the agent on the list of drugs to negotiate? Yes, says Feldman.

“It was possible that the subcutaneous [formulation] and the 130 mg IV vial given in the doctor’s office was obtained through specialty pharmacy by the docs who didn't want to buy and bill and that was counted towards the self-injectable side (Part D) — not the provider-administered side (Part B),” she says.

Interestingly, in a list of National Drug Codes “for which any negotiated maximum fair price would apply,” CMS includes eight NDCs for Stelara. Among those codes are ones for the 130 mg vial for intravenous use with Crohn’s and ulcerative colitis.

“We believe that it [the 130 mg vial] is a Part B drug because patients do not mix and then start their own IVs,” says Feldman. “Consequently, the negotiation for that vial should not be occurring during the self-admin drug negotiations.”

Ultimately, she says, two issues exist with Stelara. First, “for the IV and subcutaneous formulations that were provider administered, there would have been providers obtaining through specialty pharmacy and not billing Part B, making it look like this was a self-injectable.” And second, among patients “who did obtain it through Part D or specialty pharmacy from the doctor, 40% never injected themselves, disqualifying those from being counted as a self-injectable.”

“The 130 mg vial that was included in the IRA was for IV use only. IV formulations were not supposed to be negotiated until 2026, and it is possible that all of the specialty pharmacy acquisition was counted as self-injectable,” Feldman says. “That designation is incorrect because the vial was meant for IV use not subcutaneous injection — but because it was obtained from specialty pharmacy, Medicare could have miscounted it as self-injectable.”

Contact Feldman through CSRO at info@csro.info.

This article was reprinted from AIS Health’s monthly publication Radar on Specialty Pharmacy.