#PrescriptionDrugCosts

[syrtissolutions]

PRESCRIPTION DRUG COSTS RESULT IN OHIO CARVE-OUT

In addition to the pandemic driven economic downturn and the resulting surge in Medicaid enrollment, climbing prescription drug costs in the Medicaid program have led to tremendous fiscal pressure on state budgets for many years. In 2017, prescription drugs represented 5.1 percent of Medicaid benefit spending, and this expenditure continues to rise. States typically utilize managed care organizations and pharmacy benefit managers (PBMs) to deliver pharmacy benefits and lower prescription drug costs. However, a number of states have decided to carve-out pharmacy benefits and change to fee-for-service (FFS) models. In July, Ohio became the most recent state to shift from its managed care model and issued a RFP for a single pharmacy benefit manager (SPBM).

The carve-out approach reduces drug costs by centralizing a state's purchasing power, allowing it to leverage the size of its population to negotiate prescription drug prices with pharmaceutical manufacturers directly. Presently, Tennessee, West Virginia, Wisconsin, and Missouri have carved-out their pharmacy benefits. Due to the potential savings from FFS models, some other states are now considering carve-outs and other methods to drive pharmacy costs down.

OHIO RFP FOR SPBM

Over the past five years, there has been criticism of how Ohio Medicaid PBMs oversee the state's prescription drug program. After complaints of overcharging, double-dipping, anti-competitive practices, and transparency concerns, the state legislature required that the state selects a SPBM to manage prescription drugs. Also, the SPBM would contract with the state directly to improve transparency.

In July, the Ohio Department of Medicaid (ODM) issued a request for proposal to change the agency's managed care program and carve-out pharmacy benefits. Ohio hopes to improve and build on administrative efforts that will increase transparency and financial accountability. According to ODM, implementing a SPBM will assist the Medicaid program by reducing costs, easing administrative burdens, and improving fiscal oversight.

CALIFORNIA Rx CARVE-OUT

California's Governor, Gavin Newsom, authorized an executive order at the beginning of the year to transfer all of Medi-Cal's pharmacy benefits from managed care to a FFS model starting January 2021. According to the state, the carve-out is an economical way to negotiate prices and purchase medications. State authorities believe that the FFS model will also standardize drug access for all Medicaid beneficiaries.

California's FFS move has been contentious, and there are concerns over its potential impact on MCOs, PBMs, pharmacies, and the coordination of care. Critics argue that it will make the coordination of care challenging. While buying in bulk directly from manufacturers could drive down prices, it's uncertain how drugs will be dispensed and how local pharmacies will maintain profitability.

MICHIGAN CARVE-OUT TO SINGLE PDL

In October, Michigan's Department of Health and Human Services announced that outpatient prescription drug coverage would no longer be a Michigan Health Plan (MHP) benefit. MHP would shift to a FFS model. The state anticipated to save $10 million in general funds with the FFS model through Rx rebates and the removal of MHP administrative capitation costs.

At the time, healthcare payers and PBMs opposed the decision. They stated that the move would impede the delivery of whole-person integrated care by increasing out-of-pocket costs, and members wouldn't have the proper overview of their medications.

A couple months later, the state decided against the carve-out and rather chose to implement a single Medicaid preferred drug list while also raising MHP's dispensing fee to $3 for independent pharmacies.

State budgets are experiencing fiscal pressure from the public health crisis and skyrocketing prescription drug costs. Each year pharmacy spend represents more and more of state budgets. Because of this, some Medicaid plans are carving-out pharmacy benefits and transitioning to FFS models to curb costs. While this is one course of action to save money, states should also look for opportunities to improve efficiency and cost avoid in their Medicaid plans.

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[mariebenz]

Access to Pharmaceutical Biosimilars Varies with Insurance Plan

MedicalResearch.com Interview with:

Dr. Chambers James D. Chambers, PhD, MPharm, MSc Associate Professor of Medicine Tufts Medical Center Institute for Clinical Research and Health Policy Studies MedicalResearch.com: What is the background for this study? Response: We know that biosimilars have not had the same uptake in the US as they have had elsewhere. We know that this is in part due to reference product manufacturer tactics to delay biosimilar market entry and patent disputes. In this study we examined whether lack of preferred coverage by commercial health insurers may also play a role. MedicalResearch.com: What should readers take away from your report?  Response: That patients’ access to biosimilars is unequal across insurance plans. This means that physicians must tailor their treatment choices not only to a patient’s clinical presentation, but also to their insurance coverage. Also, that a lack of preferred coverage by US health plans may be a factor in biosimilars mixed success to date. MedicalResearch.com: What recommendations do you have for future research as a result of this work? Response: We will continue to monitor how commercial health insurers cover biosimilars to determine if this trend continues. We also plan to extend this work to evaluate to what extent a lack of preferred coverage affects utilization, and also patient’s health outcomes.  MedicalResearch.com: Is there anything else you would like to add? Response: I would only like to add that this paper is part of our larger effort to better understand how health plans cover specialty products for their enrollees. The variation in biosimilar coverage we identified is consistent with variation we have found for specialty products more generally. However, given that the intent of biosimilars is to reduce costs, we were surprised by the lack of preferred coverage among many of the included commercial insurance plans. I have no disclosures. Citation: Chambers JD, Lai RC, Margaretos NM, Panzer AD, Cohen JT, Neumann PJ. Coverage for Biosimilars vs Reference Products Among US Commercial Health Plans. JAMA. 2020;323(19):1972–1973. doi:10.1001/jama.2020.2229   The information on MedicalResearch.com is provided for educational purposes only, and is in no way intended to diagnose, cure, or treat any medical or other condition. Always seek the advice of your physician or other qualified health and ask your doctor any questions you may have regarding a medical condition. In addition to all other limitations and disclaimers in this agreement, service provider and its third party providers disclaim any liability or loss in connection with the content provided on this website.   Read the full article

[therapy-bites]

The Shark Medicine Cabinent

Day 5 - SharkWeek 2022

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[jffc-in-blog]

Trump's prescription to reduce drug prices takes small steps

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[syrtissolutions]

DISCORD AT THE DEPARTMENT OF HEALTH AND HUMAN SERVICES

Government healthcare reforms and reducing prescription drug prices have been at the top of President Donald Trump's agenda. A quarrel between the top health officials at HHS is stalling the administration's healthcare initiatives.

Over the past year, tensions have been building between HHS Secretary Alex Azar and CMS Administrator Seema Verma. The drama between the two officials could be confused for an episode from the reality television show, The Apprentice. The two health chiefs are in a power struggle over policy; additionally, both are claiming credit for the administration's healthcare policy victories.

According to sources, the drama started when former HHS Secretary Tom Price resigned in the fall of 2017. Verma was a possible replacement to Price but the president opted to nominate Azar for the position. From that point, the two officials became very competitive with each other to advance the president's healthcare agenda.

After Azar was confirmed, a meeting occurred in the oval office where Azar discussed his prescription drug-pricing proposal with President Trump and Administrator Verma. Verma emphatically opposed Secretary Azar's plan due to its potential of raising federal spending and Medicare costs in 2020. Subsequently, the White House ended up not supporting Azar's drug pricing proposal.

At about the same time, Verma had invested months composing an alternative to the Affordable Care Act (ACA). Secretary Azar struck down that proposal before Administrator Verma could show it to the president. Azar strongly believed that the proposal would have reinforced the ACA rather than abolishing it.

Sources also say that there have been attempts to marginalize and restrict Verma's influence by excluding her from policy meetings. In October, Azar allegedly attempted to keep Verma from traveling with the president to Florida for the unveiling of a Medicare executive order which was drafted largely in part by CMS. Verma purportedly complained to the White House and was eventually permitted on the plane. In addition, Azar has also been accused of meddling in staffing decisions affecting HHS and CMS.

Officials at the White House claim that the situation between Azar and Verma has hit such a low that they are now resorting to leaking stories about one another to the media. One of the stories has to do with a stolen property claim submitted by Verma in 2018. While she was giving a work-related speech in California her jewelry and luggage were stolen from a rental car. She requested reimbursement from the federal government and the claim was met with objection from Democrats as a waste of taxpayer dollars. The other leak reported that Verma had contracted consultants to boost her reputation using taxpayer dollars. According to a CMS representative, "these recent leaks are part of a targeted campaign to smear the Administrator and undermine the accomplishments of CMS."

On December 11th, the White House chief of staff Mick Mulvaney called Azar and Verma to a meeting at the White House to resolve the spat. President Trump was not present at the meeting and according to White House officials, the president still supports Administrator Verma but he also wants the two officials to put an end to the drama. One official said President Trump "doesn't care if they like each other, but they have a job to do." The source also claimed that neither of their jobs are in jeopardy.

The drama between HHS Secretary Azar and CMS Administrator Verma has reached new heights and the Trump administration has had enough. Their failure to cooperate and get along with one another is not only postponing the president's healthcare policies but it has the potential to adversely impact the president's 2020 election campaign. Hopefully, the two chief health officials can set their quarrels aside and recognize that their decisions affect the healthcare of millions of Americans.

Discover more here. 

[syrtissolutions]

GOVERNOR NEWSOM'S EXECUTIVE ORDER: MEDI-CAL TO NEGOTIATE PRESCRIPTION DRUG PRICES

California's newly appointed governor; Gavin Newsom (D) has just recently taken a legislative measure to address skyrocketing drug prices. Soon after he was sworn in last week, Newsom authorized an executive order making the state responsible for negotiating drug prices directly with pharmaceutical drug companies. Furthermore, the governor is pursuing increased funding for Medi-Cal and a state-level individual mandate.

The order outlines a singular purchasing model which intends to achieve improved drug pricing for the state's Medicaid program. Newsom is attempting to making use of the purchasing power that comes along with a Medicaid population of over 13 million and growing. In addition, there is very little doubt that carrying out the order will have ramifications with California's relationship with big pharma. Under the order, California will develop a list of drugs to be purchased in bulk as well as target specific medications for negotiation. It would also enable private payers to participate in the public system and negotiate prices.

Advocates of the initiative view it as a chance to not only decrease costs locally but also at the federal level. Jack Hoadley, an analyst at Georgetown University's Health Policy Institute, believes that the order could promote the use of high priced pharmaceuticals and make them more common.

Hoadley stated, "States like California could bring a lot of leverage to a sole-source drug that is priced very high."

Friso van Reesema specializes in Medicaid pharma at Cipher Health and sees Newsom's executive order as an "interesting move that shows that states are diving deeper into their budgets to identify ways to allocate funds to priority programs." Reesema thinks that pharmaceutical companies will have to comply with the state's updated purchasing model, thus enabling payers to negotiate drug pricing based on health outcomes rather than models that are based purely on volume.

On the other hand, some specialists are concerned about the fact that managed care plans will no longer have complete control over their drug formularies. This could result in denied prescriptions and could greatly impact patient and provider satisfaction.

Dr. Adam Fein from Pembroke Consulting is unconvinced by the governor's order. Fein says, "It sounds like a supplemental rebate play. States can negotiate supplemental rebates with manufacturers (either through state pools or via managed care). Nearly all states already do this as single states or as part of a multistate group."

Sandeep Wadhwa, MD, chief health officer and senior vice president of government programs at Solera Health, agrees with Fein's observation. According to Wadhwa, "This is a bit like other state-administered services such as long-term services or dental care which may not be part of managed care contract. This will almost certainly require a state plan amendment to be approved by feds."

Read more here.

[jffc-in-blog]

The Latest: Trump unveils plan to reduce drug prices

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