WHITE HOUSE EXECUTIVE ORDERS
On July 24, 2020, President Trump released four executive orders on prescription drug pricing as part of the White House’s ongoing drug pricing reform efforts. This announcement came with less than four months remaining before the November 3 presidential election.
The executive orders follow the Department of Health and Human Services (HHS) Blueprint to Lower Drug Prices and Reduce Out- of-Pocket Costs released in May 2018 and targets the pharmacy benefits industry to lower prescription drug prices through various methodologies. The executive order finalizes the objectives provided by HHS after a period of public comment and multiple hearings in both the Senate and House of Representatives.
Executive Order on Lowering Prices for Patients by Eliminating Kickbacks to Middlemen
In a surprise inclusion, President Trump signed an executive order reforming the rebate payment model after HHS withdrew its plan on July 11, 2019. In the original model, HHS proposed the outright elimination of rebates paid for by pharmaceutical manufacturer to pharmacy benefit managers, but the updated executive order would eliminate “safe harbor” protections from anti-kickback laws and criminal penalties only if pharmacy benefit administrators do not comply with framework to lower the “prices patients see at the point-of-sale.” The executive order directs HHS to complete the rulemaking process to provide certain drug manufacturer payments at the point-of-sale for Medicare prescription coverage.
VPS Commercial Impact: Point-of-sale rebate models have been available for several years with limited commercial interest. This legislation targets Medicare Part D members only at this time. Rx Solutions feels that PBMs have gotten ahead of this legislation by setting up contracting entities for the purpose of handling rebate negotiations, which will limit compliance requirements to the overall law.
Executive Order on Increasing Drug Importation to Lower Prices for American Patients
The president’s executive order on drug importation advances the HHS framework for safe importation of certain prescription drugs presented on July 31, 2019. The original Drug Importation Act was passed by Congress in 1848 and the United States has since repeatedly expanded restrictions on cross border importation of medications based on drug safety. The executive order provides guidance to minimize international disparities in drug pricing by expanding safe access to lower-cost imported prescriptions through the HHS framework, including creating a pathway for safe personal importation through the use of individual waivers through pre-authorized US pharmacies. Providers of international medications will need to prove importation poses no additional risk to public safety and results in lower costs to American patients.
VPS Commercial Impact: Based on previous proposals and public hearings, HHS guidance has been given that only certain medications will be allowed under drug importation guidelines and strict safety protocols will be put in place. In the near future, we anticipate greater access to safe affordable medications, such as insulin, which will be available to commercial clients without the risk of illegally importing prescription medication under federal law.
Executive Order on Access to Affordable Life-Saving Medications
In a move that followed the CMS announcement on March 11, 2020, to lower out of pocket expenses for insulin, President Trump signed an executive order to reduce the cost of insulin and Epipen by requiring Federally Qualified Health Centers (FQHC) to pass through sharp 340B discounts they receive through a “penny pricing” policy. Further grants permitted under the Public Health Service Act to FQHCs will be conditional on the compliance of making insulin and injectable epinephrine available at the same price paid by the FQHC (pass through pricing). The executive order pertains to members both on commercial insurance or federal programs who do not have affordable access to these medications.
VPS Commercial Impact: Rx Solutions is confident that this executive order will lower insulin and Epipen pricing over time. FQHCs will either play a larger role in distributing these medications or retail pharmacy chains will be forced to negotiate lower comparable discounts to dispense these medications at comparable prices. There are 1,368 official FQHC located in the United States and they could potentially expand or build mail order facilities. In addition to access, we feel that commercial plans may also change benefit designs to limit coverage to these medications so that participating members meet eligibility requirements to qualify to purchase medications through this newly created executive order.
Executive Order on Creating an International Pricing Index
The final executive order may be the most interesting because it is yet to be published officially, but also because it could have greatest impact on lowering drug pricing. The executive order would cap Medicare payments for Part B prescriptions administered in a physician’s office to prices paid across the 15 other developed nations. Today, Medicare Part B pricing frame work today is called ASP plus 6 or the average selling price plus 6% commission on any drug administered to a patient in their offices. This framework incentivizes doctors to prescribe more expensive prescriptions even if a more effective lower cost option is available. Manufacturers also know that if they develop infusion medications they can charge higher prices and doctors will not face PBM step therapy programs. The order will be effective on August 24 unless Congress acts to come up with a better plan.
VPS Commercial Impact: Because commercial insurance is not tied to ASP plus 6, this would likely have limited impact on commercial market in the near future if a different plan is not developed by August 24. The industry is expecting further developments under this plan prior to August 24.Source STAT, “Covid-19 vaccine from Pfizer and BioNTech shows positive results”
How VPS Clients Benefit
Rx Solutions continues to work closely with vendors that actively participate in these conversations, creating innovative products and pricing models that provide greater flexibility for our clients. As FQHC, international drug wholesalers and PBMs enact the president’s executive orders, the Rx Solutions team will actively participate in building products and services with our partners to provide the most advanced product offering in the market place.
Top-Selling Drugs in the US in 2019
There were no surprises on the list of top-selling drugs for 2019. What may be more surprising to learn though is that the top 10 highest selling drugs managed $50 billion in sales even after giving out over $20 billion in rebates. A drug’s list price and how much a company will pay in rebates is largely associated with how much competition that drug has, whether due to a generic formulation in the market or a new direct competitor. For orphan drugs and those that treat rare conditions – like Keytruda or Stelara – there is often very little competition and so they tend to have higher list prices and offer low rebate amounts. For those drugs that have many competitors – like Trulicity or Eliquis – they may have to offer rebates of 50% or more off of their list price in order to capture a coveted formulary position.Source: "The Top Selling Drugs in the US in 2019," Axios Vitals, 2020.
Humira Patent Protections
Humira is a top selling drug for AbbVie, bringing the drug maker billions of dollars every year. In order to keep competition from potential biosimilar products away AbbVie has created a network of patents around Humira that has frustrated many in the industry, as it has allowed the price to remain high. AbbVie has made deals with many biosimilar manufacturers to allow them to market their Humira biosimilar products in the European market but not in the US until 2023. Recently, a group of drug purchasers attempted to sue AbbVie but a judge has ruled that although they have been able to “exploit advantages” they are still doing so lawfully.Source: Eric Sagonowsky. "AbbVie’s Humira Defense May Keep Prices High, but It’s Still Legal, Judge Rules," Fierce Pharma, 2020.
Recall: Metformin ER Products
At the end of May this year the FDA had announced a voluntary recall on certain Metformin ER products that had been identified as having greater than the acceptable levels of N-Nitrosodimethylamine (NDMA). Testing has not shown NDMA in immediate release (IR) metformin products — which is the most commonly prescribed formulation. At the time of the recall, at least five manufacturers had been impacted, although some were for specific product lots only. The impacted manufacturers were Actavis/Teva, Amneal, Apotex, Lupin and Marksans, with Baxter being added in early July 2020.
The substance N-Nitrosodimethylamine or NDMA has also been the reason for other recent drug recalls. Blood pressure medications like losartan and valsartan, along with the popular over-the-counter heartburn medication ranitidine, or Zantac, were also recalled after being found to contain higher than appropriate levels of NDMA.
NDMA is a substance that the FDA has identified as one that could cause cancer in humans. The substance is known to be found in many sources people might commonly come in to contact with — water and foods, including meats, dairy products and some vegetables. It is reported that NDMA could increase a person’s risk of cancer if they are exposed to high levels and are exposed over an extended time period. For example, a person taking a medication that contains NDMA at levels meeting or falling below the acceptable limit every day for 50 years would not be expected to have a greater risk of cancer.
The FDA has found that NDMA can be related to a medication’s manufacturing process or its chemical structure or even the conditions in which they are stored or packaged. As foods and drugs are processed by the body, NDMA can also be formed. The FDA continues to test and research possible sources for medications that are found to contain NDMA.Sources: "FDA Issues Recall Alert for Metformin ER Products," AAFP Foundation, 2020. "Information about Nitrosamine Impurities in Medications," Food and Drug Administration, 2020.
Oral Treatment for Spinal Muscular Atrophy
In early August 2020 the FDA approved Evrysdi, the first oral treatment for spinal muscular atrophy (SMA). SMA has gained more awareness recently as it is the target of the gene therapy Zolgensma, which was approved in 2019. Spinraza was the first treatment available for SMA; it was approved in 2016 but requires more invasive spinal injections
Evrysdi is a gene-splicing treatment designed to correct the genetic defect that is responsible for the reduction of the survival motor neuron 1 (SMN1), which leads to the weakness and disability of SMA. The drug helps the body produce more of the functional SMN protein and to avoid the loss of these neurons.
The cost for Evrysdi is reported to be up to $340,000 per year as the dose depends on the weight of the patient being treated. In comparison, Zolgensma is a $2.1 million one-time infusion and Spinraza costs about $750,000 for the first year and $375,000 each year thereafter.Source: "FDA Approves Oral Treatment for Spinal Muscular Atrophy," Food and Drug Administration, 2020.
The top 10 highest selling drugs managed $50B in sales even after $20B in rebates.
Decision on Roctavian
The approval of the much anticipated hemophilia gene therapy, Roctavian (formerly Valrox), has been postponed. The FDA has decided to hold their approval, likely until 2022 once the last trial patient completes their two year follow-up period, expected in November 2021. Roctavian would be the first gene therapy to treat the deficiency of the clotting factor responsible for hemophilia A. The treatment would be a one-time infusion and has the potential to reduce or even eliminate clotting factor infusions, which is the current treatment for patients that experience bleeding episodes. The data that has been reported so far does indicate that the clotting factor levels might decrease over time but that they may still remain at clinically therapeutic levels. Treatment also seems to be well tolerated as there have not been any new side effects reported nor have any patients dropped out of the study prematurely.Source: Joana Carvalho, Ph.D. "FDA Delays Decision on Roctavian, Potential Hemophilia A Gene Therapy, for a Year or More," NHemophilia News Today, 2020.
PBM PRICING TRANSPARENCY
Price Transparency Tool for Pharmacies
Electronic prescription company Surescripts has released a real-time price transparency service. The tool will allow pharmacists to see detailed cost and alternative drug information in real time. It gives pharmacists access to information on out-of-pocket costs and drug alternatives. The service is called Real-Time Prescription Benefit for Pharmacy. This can be combined with another Surescripts program called RxChange to let pharmacists send electronic prescription change and prior authorization requests to the original prescriber. Pharmacists can find clinically interchangeable medications without having to call or fax the physician and send requests directly to prescribers via their electronic record without a phone or fax machine. As a result, these prescription price transparency tools have begun to take off. In 2019, the number of real-time benefit checks at the point of care increased by 336% and more than 250,000 prescribers used them, according to the Surescripts 2019 National Progress Report.
OptumRx has a program called PreCheck MyScript for prescribers. It provides real-time information about available drug options and allows the prescriber to compare exact out of pocket costs of each drug based on the patient’s benefit plan.
This provides transparency to the prescribing process and displays formulary options and requirements. It also calculates the exact cost each patient will pay and display the availability of lower cost alternatives. That allows providers to easily avoid prior authorizations where clinically appropriate and also gives the chance to discuss options before the patient has left for the pharmacy. Therefore, it saves patient money, increases patient medication adherence (was shown to increase by 4% for three common chronic conditions), and improves provider efficiency and time savings.
In summary, PreCheckMyScript increases pricing transparency, allowing for more informed decision making. It was introduced in 2017 and has generated close to 60 million transactions thus far.
CVS has a program called Health Savings Advisor to help members find the most affordable drug options. Members get personalized Rx savings advice and can print a PDF of top savings opportunities to share with their physician. Health Savings Advisor also provides email alerts for a lower out-of-pocket cost opportunity. The email link sends the member to a personalized Drug Savings Opportunity page at caremark.com.
Express Scripts has a program called ScriptVision. It is also prescriber- based and enables prescribers to make better clinical and cost decisions in real time. It presents the prescriber with patient out-of-pocket costs, coverage alerts, therapeutic options and pharmacy choices. Lastly, Express Scripts has launched a temporary program, Parachute Rx, for people who lose drug coverage, offering deep discounts on thousands of commonly used medications.Source: Mallory Hackett "Surescripts Releases Real-Time Prescription Price Transparency Tool for Pharmacies," Healthcare Finance, 2020.
Walgreens Plans to Open Doctor Offices in Drugstores
Walgreens has invested $1 billion in primary care clinics with Village MD. The clinics will be full service doctor’s offices integrated at a Walgreens store. This expanded partnership will open 500 to 700 “Village Medical at Walgreens” primary care clinics in more than 30 US markets in the next five years with 3,600 primary care providers. These are the first clinics in pharmacies to use licensed doctors, rather than nurse practitioners. VillageMD data shows that the integrated pharmacy model has increased medication adherence and provided better patient outcomes. These are important factors in managing the chronic conditions that drive 85% of all US healthcare spend. Lastly, more than half of the clinics will be located in underserved areas.Sources: Mellissa Repko. "Walgreens Strikes Deal with Primary Care Company to Open Doctor Offices in Hundreds of Drugstores." CNBC, 2020
Amazon Plans to Offer Employee Health Centers
Amazon is launching neighborhood healthcare clinics near its fulfillment centers and operations facilities. The initial pilot will include 20 clinics in five cities: Dallas-Ft. Worth, TX; Phoenix, AZ; Louisville, KY; Detroit, MI; and San Bernardino, CA. This pilot program will provide primary care services for employees as soon as they join the company and will serve around 115,000 employees and their families. To accomplish this, Amazon has partnered with Crossover Health, a medical group that works with self-insured employers, to integrate care teams that will deliver primary care at each facility. Crossover will operate and staff the health centers. The clinics will provide a full spectrum of care, offering acute, chronic and preventative primary care, prescription medications, vaccinations, behavioral health services, and physical therapy and chiropractic care, among other services. The idea behind this is that patients often do not have access to primary care and instead use emergency or urgent care options, driving up costs. The centers are intended to increase accessibility to primary care, lessening reliance on emergency care systems. The centers will have same-day pediatric services available for employees’ children as well. Amazon may decide to roll out health centers at other locations across the US if the pilot is successful.Sources: Annie Palmer. "Amazon Launches Neighborhood Health Clinics for Warehouse Workers," CNBC, 2020. Kayla Webster. "Amazon Plans to Launch 20 Employee Health Centers," Employee Benefit Adviser, 2020. Tina Reed. "Amazon Teams with Crossover Health to Pilot Employee Health Centers," Fierce Healthcare, 2020.
It is more critical than ever for people to receive their prescriptions directly and efficiently.
TECHNOLOGY & INNOVATION
Uber Health & NimbleRx
Uber Health is a nonemergency medical transportation service that allows healthcare facilities to provide affordable and easily accessible transportation solutions to patients. NimbleRx is a pharmacy that offers same-day delivery of prescription medications without any extra fees. These two companies have collaborated up to offer online prescription ordering and drug delivery. Nimble has completed over 15,000 deliveries via partnership with Uber Health since the pilot launched this summer. Consumers in Seattle and Dallas will be able to order their medication online and have the prescription delivered directly to them. According to Fierce Healthcare, NimbleRx has more than 700 pharmacies in 34 states, which means that prescription delivery could be coming to a city near you. With the current health crisis and ongoing social distancing guidelines in place, it is more critical than ever for people to receive their prescriptions directly and efficiently, according to a press release from the companies.Source: Heather Landi. "Uber Health Teams Up with NimbleRx to Offer Prescription Drug Delivery," Fierce Healthcare, 2020.
DoorDash & Walgreens
DoorDash, an on-demand prepared food delivery service, and Walgreens have partnered to offer delivery for over-the-counter medication and other products from the drug store chain. Although prescription medications will not be included, more than 2,300 products from the store are available for delivery. Consumers in Chicago, Atlanta and Denver will be able to get over-the-counter items delivered from Walgreens. According to CNBC, DoorDash’s entrance into convenience store delivery also means it is maybe competing more directly with the likes of Amazon and Instacart.Source: Kevin Stankiewicz. "DoorDash Partners with Walgreens to Deliver Over-the-Counter Drugs and Other Health Products," CNBC, 2020.
Teladoc & Livongo
Telehealth services have been on the rise due to COVID-19. Teladoc and Livongo have been at the forefront of virtual services being offered to patients. Teladoc offers high-quality virtual care solutions, from in-hospital to in-home care, to meet patient healthcare needs on a global scale. Livongo is a digital-health start up that is looking to help people with chronic conditions live better and healthier lives.
Increasing patient visits have lead to an increase in revenue for both companies. According to Fierce Healthcare, Teladoc plans to pay $18.5 billion in cash and stock for Livongo. The merger of two of the largest publicly traded virtual care companies will create a win-win situation for everyone involved. Doctors will not only have access to their patients through Teladoc, they will be able to enable long-term monitoring of patients’ chronic diseases through Livongo.Sources: DTF Capital. "Teladoc and Livongo: Made the First Move in Telehealth; Huge Upside," Seeking Alpha, 2020. Heather Landi. "How Teladoc’s Blockbuster Deal Could Impact the Entire Virtual Care Landscape," Fierce Healthcare, 2020.
SpokenRx and CVS
As of 2012, 4.2 million Americans aged 40 years and older suffer from uncorrectable vision impairment, out of which one million are blind, according to the Centers for Disease Control and Prevention. The drugstore giant CVS worked with the American Council of the Blind to design and test out the new feature. The feature, Spoken Rx, is the first in-app prescription reader application to be developed by a national retail pharmacy, according to CVS. The in-app reader helps to avoid potentially detrimental errors, which are all too common for patients who are visually impaired or can’t read standard print labels, the company said. When the RFID labels are scanned by the Spoken Rx feature in the CVS Pharmacy app, which can be accessed by users using Siri or Google Assistant on their phones, prescription label information will be spoken out loud. This information includes patient name, medication name, dosage and directions. According to Fierce Healthcare, the program will be available in all CVS Pharmacy locations by the end of 2021. The labels will be enhanced to include additional information over the months to come.Sources: Heather Landi. "CVS Rolls Out ‘Talking’ Prescription Labels for Visually Impaired Patients," Fierce Healthcare, 2020. "Spoken Rx – Prescription Reader,," CVS Pharmacy, 2020.