Pharma-Funded FDA Gets Drugs Out Faster, But Some Work Only ‘Marginally’ and Most Are Pricey

Pharma-Funded FDA Gets Drugs Out Faster, But Some Work Only 'Marginally'  and Most Are Pricey | Kaiser Health NewsSource: Kaiser Health News, by Arthur Allen

Dr. Steven-Huy Han, a UCLA liver specialist, has prescribed Ocaliva to a handful of patients, although he’s not sure it helps.

As advertised, the drug is lowering levels of an enzyme called alkaline phosphatase in their blood, and that should be a sign of healing for their autoimmune disease, called primary biliary cholangitis. But “no one knows for sure,” Han said, whether less enzyme means they won’t get liver cancer or cirrhosis in the long run.

“I have no idea if the drug will make them better,” he said. “It could take 10, 20, or 30 years to know.”

Ocaliva came to market through an FDA review process created 30 years ago called accelerated approval, which allows pharmaceutical companies to license promising treatments without proving they are effective. It has become a common path to market — accounting for 14 of the 50 approvals of novel drugs in 2021 compared with four among 59 in 2018, for example.

The FDA’s accelerated approval is usually based on a “surrogate marker” of effectiveness — evidence of lower viral loads for HIV, for example, or shrinking tumors for cancer. Debate rages over the validity of some of these stand-ins, and some of the drugs.

“If you’ve got a game-changing drug that truly is going to make a difference, you don’t need surrogate markers to prove that. If it’s effective, patients will survive longer,” said Dr. Aaron Mitchell, an oncologist at Memorial Sloan Kettering Cancer Center. The shortened approval process, he said, is one reason “we are getting a lot of marginally effective, not clinically meaningful, more expensive drugs on the market.”

Many of the estimated 100,000 U.S. patients with primary biliary cholangitis — most are women — had few other treatment options. And their testimony, at FDA meetings and in online forums, helped boost Ocaliva to FDA approval in 2016. Its list price is about $100,000 a year.

After Deborah Sobel’s sister Sarah Jane Kiley died of liver complications in 2006 at age 47, Sobel met with members of Congress and bankers to urge support for the drug and its maker, Intercept Pharmaceuticals. Although the trial required for accelerated approval was too short to show long-term improvement, the drug lowered alkaline phosphatase levels in many patients who could tolerate taking it. For some, the side effects proved too much.

Sobel, who also has the disease, began taking Ocaliva six years ago. Her last liver scan “looked like I had rolled back some of the damage,” said Sobel, 67, of Naperville, Illinois. “I can’t attribute that to the drug, but I’m religious about taking it.”

Ocaliva’s profile is typical for the FDA’s accelerated program. In 2019 the drug ranked seventh in Medicare spending — about $54 million — among products approved through the program, which launched in 1992. That same year, Congress passed the Prescription Drug User Fee Act, or PDUFA, a law committing the drug industry to pay so-called user fees to help fund the FDA’s drug approval process.

The fees have steadily swollen in importance, accounting for $2.9 billion of the agency’s $6.5 billion 2022 budget, including two-thirds of the drug regulation budget, and the work of at least 40% of the FDA’s 18,000 employees. Companies in recent years have paid between $2.5 million and $3 million to have each drug application reviewed.

In most cases, companies that win accelerated approval must submit additional data, after the drug goes to market, that proves it cures or successfully treats the disease.

It turns out that some surrogate markers are better than others. Critics lashed out at the agency in 2021 after it approved Aduhelm for Alzheimer’s disease based on the drug’s capacity to dissolve clumps of amyloid plaques in the brain. Despite that evidence, most patients, who were in the earliest stages of Alzheimer’s, didn’t get better, and over a third suffered brain swelling, a frightening and painful side effect.

When it approved Ocaliva, the FDA required Intercept to conduct another trial to produce evidence of its benefit. But the company in 2021 stopped the trial, saying it was unable to enroll enough patients. To that point, the trial had shown no clinical benefit for patients on the drug. Now, Intercept is asking the FDA to accept a combination of evidence, including studies that it says show patients taking the drug fared better than “external controls” — patients whose health records indicate they would have qualified for Ocaliva but did not receive it.

The FDA already uses such “real-world evidence” for post-market reviews of the safety of drugs, vaccines, and medical devices. But when it comes to drug approvals, records collected for routine health care are often erroneous and usually can’t replace the rigorous evidence of randomized controlled trials.

Policy Born of Impatience

Impatience — among drug companies, investors, patients, and politicians — created the user fee agreements and accelerated-approval pathway, and that impatience, for profits and cures, fuels both programs.

In the late 1980s and early 1990s, the FDA was under tremendous pressure. With AIDS cutting a deadly swath through the gay community, activists held symbolic die-ins at FDA headquarters, demanding approval of new drugs. Meanwhile, conservative groups, frustrated that approvals could take three years or more, debated changing the FDA’s charter to put drugs on the market after cursory reviews. Democrats generally were skeptical of industry user fees — and many still are. During a June debate, Sen. Bernie Sanders (I-Vt.) said drug companies might be “charging outrageous prices” because so much of FDA’s regulatory budget “comes not from taxpayers who want more access to prescription drugs but from the pharmaceutical industry itself.”

The user fees came about after then-FDA Commissioner David Kessler and industry leader Gerald Mossinghoff agreed that companies would pay sums earmarked for the agency to modernize practices, hire more staff, and set deadlines for its reviews.

The impact was immediate. AIDS drugs were the first notable success beginning in 1995, turning HIV from a death sentence into a chronic but manageable disease.

One way user fees have sped reviews is by expanding communications between industry members and the FDA. Before, “it was pretty challenging to get a meeting with FDA,” said Dr. John Jenkins, a senior agency official for 25 years and now an industry consultant. By 2019, the FDA was hosting over 3,000 drug industry meetings each year. This has dramatically changed how companies operate, he said, providing more certainty about whether they are collecting the data FDA needs for its reviews.

Although FDA-regulated products account for about a fifth of every dollar spent by U.S. consumers, Congress has never shown appetite for dramatically increasing its budget, so every five years the user fee renewals become must-pass legislation. This is their year. The user fee accords — one for each brand-name, generic, and over-the-counter drug, as well as for animal drugs, biologics, and medical devices — are packed with new programs, tweaks to old ones, regulatory deadlines, and other items negotiated by the FDA and industry, with Congress tacking its priorities onto the authorizing bill.

The fee agreements are negotiated behind closed doors — industry and FDA officials met more than 100 times to prepare the 2022 accords. At least two industry negotiators were former FDA officials, and the lead FDA negotiator, Dr. Peter Stein, was a Merck and Janssen veteran before arriving at the FDA in 2016. The FDA held six public hearings on the agreements, then announced it did not intend to incorporate a single change.

The bill stalled over the summer because of disagreements over riders affecting generic drugs, lab tests, dietary supplements — and accelerated approval. The final bill, part of a stopgap spending measure, stripped out language that would have made it harder for accelerated products to stay on the market if manufacturers failed to produce evidence of lasting value in a timely way. Stephen Ubl, president of the industry trade group Pharmaceutical Research and Manufacturers of America, or PhRMA, called the slimmed-down bill “a win for patients, biopharmaceutical innovation and regulatory predictability.”

‘I Feel Divided’

Ocaliva patients and doctors are generally grateful to have the drug, though some physicians interviewed for this article said they wouldn’t prescribe it. The drug can seriously harm patients who already have cirrhosis of the liver and produces side effects such as severe itching. But some patients can’t tolerate, or fail to benefit from, the less expensive drug ursodiol, the other main treatment for primary biliary cholangitis. And some doctors who’ve studied Ocaliva believe the drug may slow liver damage.

“I feel divided about this,” said Dr. Renumathy Dhanasekaran, an assistant professor of gastroenterology and hepatology at the Stanford University School of Medicine. “As a scientist, the accelerated approval process concerns me, but as a physician treating patients with a very challenging disease, translating some of these drugs to the clinic faster is attractive.”

While final approval of Ocaliva for primary biliary cholangitis is pending, Intercept is seeking a broader, lucrative market for the drug: as many as 13 million Americans who have non-alcoholic steatohepatitis, or NASH, a variant of fatty liver disease. The only current treatment is radical weight loss. The FDA is expected to rule on that application in 2023.

Ocaliva and Aduhelm are far from the only accelerated approval drugs whose long-term impact remains uncertain. Only a fifth of the cancer drugs approved through the platform kept people alive longer than other treatments against which they were tested, according to a 2019 study co-authored by Dr. Bishal Gyawali, an associate professor of medical oncology and public health at Queen’s University in Canada.

FDA’s cancer branch has tried to remove ineffective accelerated approval drugs from the market, and says it may begin demanding that drugmakers start confirmatory trials before receiving accelerated approval for their products. But for now, many drugs with uncertain survival benefits remain on the market. Ibrance, an oral breast cancer drug that brought Pfizer nearly $5 billion in annual revenue in recent years, falls into this category.

FDA approved Ibrance for breast cancer in 2015 after a study showed it slowed tumor progression for a full year longer than aromatase inhibitors, then the standard of care. Although Pfizer won final approval through a confirmatory trial, less tumor growth apparently did not translate into longer survival for patients on Ibrance, subsequent studies indicated.

Still, with new cancer drugs continually coming to market, it makes sense for the FDA to approve promising new medications even if their benefits are incremental, said Dr. Matthew Goetz, a breast cancer specialist at the Mayo Clinic.

“All of us were excited about Ibrance when it came out,” he said. “It was an oral drug, very well tolerated, and it pushed off the time before a patient needed chemotherapy.”

Gyawali, another breast cancer expert, said he has treated his patients with Ibrance. “Many oncologists would agree that it’s a good tool to have in their toolbox.”

The Walmart, UnitedHealth Group Deal: Another Big Retail, Health Care Partnership

The Walmart, UnitedHealth Group deal: Another big retail, health care  partnership | BenefitsPRO

Source: BenefitsPRO, by Michael Popke

Just two days after the CVS acquisition of Signify Health, there is another retail store-primary health care merger – Walmart Inc. and UnitedHealth Group announced Sept. 7 a 10-year, wide-ranging collaboration that is expected to serve millions of people with high-quality, affordable health services that both companies promise will improve health outcomes and the patient experience.

The collaboration will begin in 2023 with 15 Walmart Health locations in Florida and Georgia before expanding over time. The goal is to serve hundreds of thousands of Medicare beneficiaries in value-based arrangements through multiple Medicare Advantage plans.

“We’re on a journey to transform health care, connecting more people to the right care at the right time — at a cost that makes sense,” Doug McMillon, Walmart’s chief executive officer, said in a statement. “This collaboration puts the patient at the center of health care by leveraging the strength and complementary skill sets of our two companies to accelerate access to quality care.”

 

Optum, a UnitedHealth Group business, will help enable Walmart Health clinicians through analytics and decision support tools to deliver comprehensive value-based care that officials say will enhance the care already provided at Walmart Health centers.

“UnitedHealth Group and Walmart share a deep commitment to high-quality and affordable, primary care-led services that address all of a patient’s health needs in ways that are convenient for them and improve health outcomes,” Andrew Witty, chief executive officer for UnitedHealth Group, said in a statement.

Beginning in January 2023, the collaboration will include a co-branded Medicare Advantage plan in Georgia called UnitedHealthcare Medicare Advantage Walmart Flex (HMO-POS). Also in January 2023, Walmart Health Virtual Care will be in network for commercial members in UnitedHealthcare’s Choice Plus PPO plan, giving consumers another option.

 

Eventually, according to the companies, the collaboration aims to serve even more people — including those across commercial and Medicaid plans — by providing access to fresh food and enhancing current initiatives to address social determinants of health, over-the-counter and prescription medications, and dental and vision services.

This is the not the first health care partnership for Walmart. In October 2021, the retail giant announced it was teaming up with Transcarent, a consumer-directed platform for employees of self-insured employers and their families. And in October 2020, Walmart agreed to offer Medicare Advantage plans from Clover Health in parts of Georgia.

Newsom Signs Bill Making Family Leave Affordable To More Workers

Work & Family CA (@WorkFamilyCA) / TwitterSource: CalMatters, by Jeanne Kuang

Gov. Gavin Newsom signed a family leave bill today that will enable lower-income workers to recoup up to 90% of their income when they take time off to care for a new child or a sick family member.

That will be a boost from the current program and will apply to those who make as much as $57,000 a year.  The boost, outlined in SB 951, will begin in 2025, and higher earning Californians will pay for it through larger contributions from their paychecks.

“California created the first Paid Family Leave program in the nation 20 years ago,” Newsom said in a statement. “Today we’re taking an important step to ensure more low-wage workers, many of them women and people of color, can access the time off they’ve earned while still providing for their family.”

Advocates for the legislation — a coalition of gender equity, child and maternal health and anti-poverty groups — say the program has fallen behind other states and California doesn’t provide enough to allow low-income workers to take the leave. Research shows paid family leave is linked to improved maternal health and child development.

“Until now, workers who couldn’t afford a 40% pay cut were being forced to keep working against their doctor’s orders, to work up until the day they go into labor, to leave ill family members without adequate care, and to return to work right after having a child,” said Katherine Wutchiett, staff attorney at Legal Aid at Work, in a news release. “SB 951 finally ends this inhumane status quo.”

Program helps higher earners more

Paid family leave, like the state’s disability insurance program, is funded through a 1.1 % tax on most workers’ paychecks. Those who claim the benefit can receive paid leave based on their income for up to eight weeks. The maximum payout this year is $1,540 a week. Pregnant workers can also take time off using disability insurance.

In 2025 the bill increases the amount Californians receive through the program to 90% of paychecks for lower-income workers and 70% of the paychecks for other workers.

For 2023 and 2024, the bill will keep the program’s current wage replacement rates, which have stricter income limits. That’s 70% of paychecks for the lowest-income workers — making as much as $27,000 a year — and 60% for the rest. Even those making the minimum wage full-time can only get the lower rate.

Higher-income people have been more likely to take time off. From 2017 to 2019, leave claims by workers making less than $20,000 a year declined while they rose for all other workers — increasing the most for those making $100,000 or more, according to the Employment Development Department.

Last year Newsom vetoed similar legislation to raise family leave payments, saying it would create unbudgeted costs.

The bill this year will pay for increased benefits by removing a payroll tax shield on earnings above $145,600, effectively raising the contributions from higher earners.

The Employment Development Department told the Legislature in a Senate floor analysis that this would increase funding for the program, but it “would not offset the additional benefit payments over time.”

‘There’s just no way.’

Kiera Schminke, a Carlsbad mother of two, learned of paid family leave when she was pregnant with her first daughter seven years ago.

Between her husband’s full-time job and her part-time work as an adjunct professor, they were just able to pay the bills, she said, but it wouldn’t have added up if she had taken paid leave. At the time, the family leave program only paid 55% of workers’ incomes.

“There was just no way I could take it,” Schminke said. “It would reduce my income so much and so drastically that my husband and I just wouldn’t have been able to even buy essentials and pay rent.”

She worked until her delivery date, took two weeks of vacation after giving birth, then returned to work. Her doctor told her the stress was negatively affecting her milk supply, said Schminke, a breastfeeding advocate.

If she could have taken more time off to bond with her daughter it would have been “life-changing,” she said. When Schminke gave birth to her second daughter three years ago, the leave program would pay 60% of her income; she still could not afford it.

“It was pretty difficult and it affected me emotionally,” said Schminke, 42. “We pay into this system. I’ve paid into this system since I was 18 years old.”

Down to the wire

Newsom’s decision came down to the wire on the final day for the governor to act on legislation. He has spent weeks vetoing many other social spending bills on the grounds that state revenues are coming in lower than expected this fiscal year.

No organizations voiced opposition to the bill this year. The California Chamber of Commerce, which represents employers, didn’t take a position on the state’s current leave program because it’s entirely funded by workers themselves and doesn’t require business contributions, said policy advocate Ashley Hoffman.

Newsom in 2020 signed legislation increasing the amount of time workers can receive family leave benefits. This year, he signed a bill requiring the Employment Development Department to collect demographic information on workers who use the program to improve outreach efforts.

On Friday he also signed a bill requiring businesses to allow employees to take unpaid leave to care for any “designated” person, not just an immediate family member.

New ALS Treatment Sparks Yet Another Drug Pricing Debate

ALS drug wins FDA approval despite questionable data | FOX8 WGHPSource: Axios, by Caitlin Owens

The FDA’s expedited approval of a new ALS treatment priced at $158,000 a year, has touched off another debate over balancing regulation with patient access.

Why it matters: ALS, or Lou Gehrig’s disease, is a dreaded neurological condition whose victims usually die within three years of the onset of symptoms. But there’s limited evidence the newly approved drug works, or that its price is justified.

Driving the news: The FDA on Thursday announced the approval of Relyvrio, an experimental drug combination from Amylyx Pharmaceuticals. It’s the first ALS drug to win approval in five years and only the third in the agency’s history.

  • * The approval was granted without the clinical trial evidence the agency usually requires. The FDA originally recommended Amylyx apply for approval after the Phase 3 trial was completed in 2024, but backed off after intense campaigning by patient advocacy groups, per the NYT.
  • * “Given the serious and life-threatening nature of ALS and the substantial unmet need, this level of uncertainty is acceptable in this instance and consideration of these results in the context of regulatory flexibility is appropriate,” the FDA wrote in a benefit-risk assessment.
  • * Amylyx has said the list price of Relyvrio will be $158,000 a year.

Between the lines: Advocates and experts quickly criticized the price as excessive. An analysis by the Institute for Clinical and Economic Review had previously said that the drug would be cost-effective if it was priced between $9,100 and $30,600 per year.

  • * “$158,000 annually for a medicine that is not a biologic or complicated delivery device or new molecule, but rather the combination of two drugs that already exist and have for a while,” tweeted Walid Gellad, a professor of medicine and health policy at the University of Pittsburgh.
  • * “The issue in the US will be the sky high cost combined with residual uncertainty about level of efficacy,” Gellad added.

The intrigue: Although the company previously told the agency that it would voluntarily withdraw Relyvrio from the market if its shown to be ineffective in its Phase 3 trial, its co-CEO walked back that pledge on Friday, according to Endpoints News’ Zach Brennan.

Employers, Prepare For Wage Transparency Laws

New York City Companies Prepare to Put Pay Ranges on Job Listings - WSJ

Source: BenefitsPRO, by Willa Hart

What’s next for wage equality? More wage transparency laws. Across the country, multiple states and cities have passed or are currently considering legislation which would require employers to offer prospective workers more information about their compensation. The laws may give female workers more bargaining power, while drawing attention to differences in salaries between different workers, according to the New Jersey Law Journal.

Currently, seven states have wage transparency legislation on the books. Colorado was the first state to pass such a law, when, in 2021the Equal Pay for Equal Work act went into effectOther states with similar laws include California, Connecticut, Maryland, Nevada, Rhode Island, and Washington. Some cities have also passed wage transparency legislation, including New York City, Jersey City, and Cincinnati.

According to some experts, the laws are a win for wage equality. “More information about pay range will give employees more bargaining power and leverage as they’re negotiating starting pay,” says Christine Hendrickson, vice president of strategic initiatives for Syndio, a Seattle software company, according to the New Jersey Law Journal. “As starting pay is far and away the most impactful pay decision, getting started right means you have a good ground for equity moving forward.”

But the laws have introduced complications, too. For instance, many employers don’t know if they’re legally obligated to obey the laws for remote work positions. In fact, after Colorado introduced their laws, some companies decided to exclude remote candidates from Colorado from consideration for their open positions to avoid any potential wrongdoing, according to the Denver Post.

David Rapuano, an employment lawyer, says that it can be hard for employers to know what laws apply to them – especially if they’re small businesses who can’t afford to consult lawyers on the matter. “It becomes incredibly burdensome and incredibly easy to run afoul of them despite every good intention,” he says. “The question is, is the cost worth the benefit? And I don’t know the answer to that.”

Transparency laws aren’t the only wage equality legislation on representatives’ dockets. Some states, including Illinois and California, have passed or are considering legislation which requires companies to report the salaries of their employees to the government, alongside information about their race, ethnicity, and gender. The goal of the legislation is to be able to monitor for potential wage discrimination.

New California Legislation Affects Health Care

New 2022 California laws on COVID-19, housing and policing - Los Angeles  TimesSource: Word & Brown, by Paul Roberts

California Governor Gavin Newsom signed a package of new laws in late September that significantly affect health care and access to abortive care in the Golden State. These changes impact most Californians, especially those covered by fully insured group health plans, individual plans, or Medi-Cal.

Among the latest measures are bills that support health care providers, expand access to contraception, protect Californians from legal retaliation regarding health care services, boost uninsured care, and prohibit law enforcement and corporations from cooperating with out-of-state entities regarding abortion records in California.

In comments at the bill signing, Governor Newsom explained the intentions behind the new laws, “An alarming number of states continue to outlaw abortion and criminalize women, and it’s more important than ever to fight like hell for those who need these essential services. We’re doing everything we can to protect people from any retaliation for accessing abortion care while also making it more affordable to get contraceptives. Our Legislature has been on the frontlines of this fight, and no other legislative body in the country is doing more to protect these fundamental rights – I’m proud to stand with them again and sign these critical bills into law.”

The health care-related measures included in the September legislative package are:

  • * ASSEMBLY BILL 2223: PROTECTIONS FROM CRIMINAL & CIVIL LIABILITIES: Helps ensure that pregnancy loss is not criminalized, prohibiting a person from being criminally or civilly liable for miscarriage, stillbirth, abortion, or perinatal death due to causes that occurred in utero.
  • * ASSEMBLY BILL 2091: KEEPS MEDICAL RECORDS PRIVATE: Prohibits a health care provider from releasing medical information on an individual seeking abortion care in response to a subpoena or request from out-of-state.
  • * ASSEMBLY BILL 1242: PROHIBITS COOPERATION WITH OUT-OF-STATE ENTITIES: Prohibits law enforcement and California corporations from cooperating with out-of-state entities regarding a lawful abortion in California. Also prohibits law enforcement from knowingly arresting a person for aiding in a lawful abortion in California.
  • * SENATE BILL 523: EXPANDS BIRTH CONTROL ACCESS: Expands birth control access – regardless of gender or insurance coverage status – by requiring health plans to cover certain over-the-counter birth control without cost sharing. Also prohibits employment-related discrimination based on reproductive health decisions. Note: The state of California does not have authority over self-funded plans. Thus, these changes generally do not apply to such plans.
  • * SENATE BILL 1375: TRAINING FOR HEALTH CARE PROVIDERS: Expands training options for Nurse Practitioners and Certified Nurse-Midwives for purposes of performing abortion care by aspiration techniques.
  • * SENATE BILL 1142: CARE WEBSITE: Requires the establishment of an abortion care services website and an evaluation of the Abortion Practical Support Fund.
  • * ASSEMBLY BILL 2134: HEALTH EQUITY PROGRAM: Establishes the CA Reproductive Health Equity Program, which will provide grants to providers who provide uncompensated care to patients with low-incomes and those who face other financial barriers.
  • * ADDITIONAL MEASURES: Other legislation expedites licensure for health care practitioners coming to California to provide abortion care services, prohibits license suspension or revocation for performing an abortion in accordance with the licensee’s practice, establishes an LA County reproductive health pilot project to safeguard abortion access, and creates a program to support comprehensive reproductive/sexual health education to disproportionately impacted communities.

The Governor had previously signed legislation to eliminate cost-sharing for abortion services, Senate Bill 245, and to protect those in California from civil liability for providing, aiding, or receiving abortion care in the state, Assembly Bill 1666. These measures build on the state’s earlier efforts to reduce costs and expand access for those in need of abortion care services, including allocation of $200+ million to help pay for travel costs, cover uninsured care, support health care facilities and providers, and bolster security.

Governor Newsom also issued an executive order preventing medical records, patient data, and other information from being shared by state agencies in response to inquiries or investigations brought by other states or individuals looking to restrict abortion access.

Beyond what’s happening legislatively, in November, California voters will face a ballot measure to decide whether to amend the state’s constitution to enshrine the right to an abortion. Public opinion polls in California show a majority of voters across the political spectrum support women’s rights and reproductive freedom.
Still, there are groups in the state that are expected to challenge some recent legislation in court. Time will tell if any measures end up being scaled back or eliminated altogether.

You can expect further updates from our Compliance team on changes that might further impact your employer-clients and their employees or dependents.

NAIC Takes Aim At Misleading Health Insurance Marketing

NAIC takes aim at misleading health insurance marketing – InsuranceNewsNet

Source: InsuranceNewsNet, by Susan Rupe

Consumers are bombarded with misleading advertising for Medicare Advantage and other health plans. Insurance regulators are taking action to identify and combat the improper marketing of these health plans.

Two state insurance regulators gave a rundown on efforts to crack down on misleading advertising during Wednesday’s session of the National Association of Insurance Commissioners 2022 Insurance Summit.

TV commercials featuring celebrity endorsers urging viewers to call a toll-free number to sign up for Medicare Advantage plans, and advertising selling short-term, or “skinny” health plans, that are not compliant with the Affordable Care Act are two of the best-known examples of improper health plan marketing, the speakers said.

“We are working to do cease-and-desist orders on these short-term plans, but it’s like a game of Whack-a-Mole,” said Franklin T. Pyle Jr., special deputy commissioner for the Delaware Insurance Department.

NAIC established the Improper Marketing of Health Insurance (D) Working Group in 2021. Its charges include:

  • * Coordinating with state and federal regulators to provide assistance and guidance monitoring the improper marketing of health plans, and coordinating the appropriate enforcement actions.
  • * Reviewing existing NAIC models and guidelines that address the use of lead generators for sales of health insurance products, and identify models and guidelines that need to be updated or developed to address current marketplace activities.
  • * Creating language within an existing model or creating a new model that would give states the ability to take action against lead generators.

The working group is reviewing the Unfair Trade Practices Act, particularly in regard to the act’s definition of “insurance lead generator,” said Martin Swanson, deputy director and general counsel for the Nebraska Department of Insurance.

Under Section 2 of the act, “insurance lead generator” means any marketing-related activity or entity that publicizes the availability of an insurance, or what purports to be, an insurance product or service.

What the group is trying to do, Swanson said, is define “lead generator.”

Section 3 of the Act states that it is an unfair trace practice for any insurer to make, publish, disseminate, circulate or place before the public in a publication, internet communication, mailing, or on radio or TV an advertisement, announcement or statement containing any assertion, representation or statement that is untrue, deceptive or misleading about insurance or about the insurer’s business.

 

Swanson said the working group wants to change the language of Section 3 to include insurance lead generator with insurer. “As it stands now, we have jurisdiction over the producer but not the lead generator,” he added.

“It’s broad language but it needs to be because of mode of these scams keeps changing,” he said. “Grandma is on Facebook looking at pictures of her grandkids when she starts getting inundated with Medicare Advantage ads.”

Swanson said his agency has heard from several Medicare beneficiaries who said they have received phone calls from someone wrongly claiming to be with the state Department of Aging and saying they need to change their Medicare plans. “It’s fraud,” he said.

Several insurers who offer short-term plans, or so-called “skinny” plans, have moved to the Medicare Advantage market and are offering seniors what Pyle called “junk plans.”

“They think they it’s easier to con a senior who thinks they are getting more benefits by moving to another plan,” he said. “I don’t want to see our seniors getting lied to and getting talked out of their plans to get into a junk plan.”

Health care sharing ministries

NAIC also is looking at health care sharing ministries, which are not required to comply with the ACA.

Pyle said NAIC does not have regulatory authority over health care sharing ministries, but added “that could change” as some plans become ACA compliant.

He pointed to Virginia’s Bureau of Insurance, which produced a list of FAQs for agents who offer these plans. The list noted that health care sharing ministries do not guarantee payment of claims, which could leave consumers with significant medical bills to pay. Agents who wish to offer these plans should ensure they understand their limitations and must be able to explain these limitations to consumers to avoid misleading them. Agents also must provide consumers with a legally required disclaimer.

“Good plans want to get rid of the bad actors. We want to get rid of the bad actors. That’s good for everyone, especially consumers,” he said.

Amazon, Walmart And Hundreds Of Providers Lobby Senate For Extension Of Telehealth Policies

Amazon, Cleveland Clinic join call for telehealth flexibilities

Source: Fierce Healthcare, by Heather Landi

Big tech and retail giants like Amazon and Walmart joined hundreds of provider groups, hospitals and virtual care companies pressing Congress to take action on telehealth legislation this fall.

 
 

More than 370 organizations sent a joint letter (PDF) to bipartisan leadership of the U.S. Senate to pass a two-year extension of important telehealth policies enacted at the start of the COVID-19 pandemic. Currently, those policies are set to expire 151 days after the end of the public health emergency.

 
 

Policy certainty beyond the COVID-19 public health emergency is essential to continuing access to telehealth for both Medicare and commercial market patients, the groups wrote in the letter.

The hundreds of employers, providers and health tech companies that signed the letter represent a spectrum of organizations with customers and patients that are impacted by telehealth policy. The signers include consumer groups representing mental health, chronic disease and primary care as well as providers including physicians, nurses and physical therapists along with employers representing millions of Americans who receive their coverage through their jobs.

The groups urge the Senate to pass legislation that would extend critical telehealth flexibilities, including provisions to waive provider and patient location limitations, remove in-person requirements for telemental health, ensure continued access to clinically appropriate controlled substances without in-person requirements and increase access to telehealth services in the commercial market, including for those with a high-deductible health plans coupled with a health savings account.

 

“More than 400 members of the House voted to extend telehealth flexibilities in July, and it’s time for the Senate to follow. Without more policy certainty around telehealth, beneficiary access could be compromised,” said Krista Drobac, executive director of the Alliance for Connected Care. “The House created the momentum, we hope the Senate will seize it and enact comprehensive telehealth legislation this fall.”

The joint letter was co-led by the Alliance for Connected Care, the American Telemedicine Association, the College of Healthcare Information Management Executives, the Connected Health Initiative, the Consumer Technology Association, Executives for Health Innovation, the Health Innovation Alliance, HIMSS and the Partnership to Advance Virtual Care.

With expanded flexibilities, telehealth has helped bridge gaps in care, especially in communities facing significant workforce shortages, the groups wrote. Almost 3 in 4 Americans “strongly agree” or “somewhat agree” that patients should have the option to receive telehealth, even after the pandemic, which increases to 84% among recent telehealth patients, according to a poll from the Alliance for Connected Care and Morning Consult.

Most recently, reports from the Department of Health and Human Services’ Office of Inspector General showed dually eligible beneficiaries were more likely than others to use telehealth to ensure access to care and that telehealth expanded access for minority populations.

 

Telehealth is helping address the crisis-level mental health and primary care shortages and has expanded access to care for underserved communities, according to the groups.

Patients who utilize telehealth as part of their care plan face the possibility of a forced return to in-person care. “This is particularly concerning for those utilizing telehealth to reach experts at longer distances, for access to mental and behavioral health practitioners, and those receiving ongoing remote care for chronic conditions,” the groups wrote.

Bringing Pharmacy Costs Into The Light: Transparency Is Key To Capping Costs

Bringing pharmacy costs into the light: Transparency is key to capping costs  | BenefitsPRO

Source: BenefitsPRO, by Will Young

America’s prescription-drug prices are out of control.

The problem is so large that it has begun attracting high-profile new market entrants, like the Mark Cuban Cost Plus Drug Company that launched earlier this year. Cuban seeks to fix the convoluted prescription-drug market by not taking insurance, and charging 15% over cost.

 

But another path exists for health plans to tame prescription drug costs within the confines of a health plan — a new model of pharmacy benefits managers. PBMs are companies that manage health insurers’ prescription-drug plans. Transparent PBMs, like San Francisco-based SmithRx, provide their clients 100% of payments they receive from drug manufacturers, be they rebates, incentives, administrative fees or data fees. Transparent PBMs also supply clients with any discounts they negotiate with pharmacies.

Other transparent PBMs include CapitalRx, Navitus Health Solutions and TransparentRx.

Passing through rebates and fees isn’t the only benefit of transparent PBMs. A 2019 report by the Commonwealth Fund, for example, found pharmacy benefit plan sponsors could also accrue savings “by reducing the use of high-cost, low-value drugs.” Removing PBM rebates frees them to choose the best value drugs for any given treatment. The Commonwealth Fund estimated that the sponsors it evaluated could save about $63 million annually.

 

Why affordable prescription coverage remains elusive

Americans spend more than twice the amount on prescription medications compared with our counterparts in the 37 other member nations of the Organisation for Economic Co-operation and Development. U.S. per-capita average spending in 2019 was $1,126 compared to OECD per-capita average spending of $552.

Cuban’s online pharmacy is one example of efforts underway to combat what everyday Americans spend on prescription medications. Customers save money by paying cash for prescriptions at prices Cuban says frequently will be lower than the “discounted rates” negotiated by many insurance plans.

Cuban’s venture addresses a core, systemic obstacle to reducing prescription drug costs: spread prices — the difference between what a PBM pays for a drug, and what it charges its customers.

 

The current PBM model that pervades the U.S. health care system is one with labyrinthine and opaque costs and pricing, making it almost impossible for patients and payers to make cost-conscious decisions. Worse, the model incentivizes PBMs to promote more expensive drugs.

PBMs historically have negotiated a list price, and typically receive a drug-manufacturer rebate. But PBMs share little or no information about the rebate amount — or how much of that rebate is passed on to the plan or the patient. That lack of transparency makes it difficult for the plan or patient to choose the most cost-effective solution.

Perverse PBM incentives are another consequence of the current model. For example, it makes financial sense for PBMs to include in their covered medications a $100 name-brand drug that provides a $50 rebate, all of which the PBM may keep, and exclude a $20 generic drug with a $5 rebate.

It would appear that employers are aware of these flaws in their current PBMs. A 2017 National Pharmaceutical Council report found that just 41% of employers rated their PBMs as “very good” in negotiating rebates from pharmaceutical manufacturers to secure cost savings. Only one-third described their PBMs as “very trustworthy.” And, 50% believe that PBMs are not transparent with covered medications.

Yet, just a handful of legacy PBMs — namely those owned by Blue Cross Blue Shield, United Healthcare, Cigna, Aetna, Humana, or their parent companies — dominate the market. According to a report released earlier this year by the Drug Channels Institute, the PBMs associated with those insurance giants managed 92% of prescription claims. Data released earlier this year by the independent, non-partisan market research firm Health Industries Research found comparable domination of the PBM market, with those same players handling 92% of claims.

It’s unlikely that big health insurers will seek more effective PBM partners any time soon. Their affiliated PBMs increasingly are driving revenue and profitability growth for those insurers and their parent companies.

The CVS PBM segment, for instance, fueled about $46 billion of the company’s  $324 billion in revenue last year. Cigna’s PBM, Express Scripts Holding Co., accounted for much of the doubling in revenue the company reported in 2019, to $38.2 billion from $14.3 billion. United Healthcare’s PBM collected more profit in the fourth quarter of 2019, $3 billion, than the company’s insurance arm, $2.1 billion.

This landscape has resulted in 18 million Americans, or 7% of U.S. adults, being unable to pay for prescriptions they need, according to a 2021 West Health and Gallup survey. That group could not pay for at least one prescribed medication during a three-month period, the survey found. Adults younger than 65 were twice as likely as seniors to report being unable to pay for prescriptions, and that group also was twice as likely to skip doses to save medicine and money.

Solutions to reducing prescription-drug costs

If we can’t depend on the big commercial health plans to drive the shift to transparency, what can we do? In the absence of federal government action, many state legislatures have proposed bills requiring various levels of transparency and limiting costs to patients.

But, businesses need not wait on legislative action. They may partner with transparent PBMs right now through one of two ways. They can negotiate a pharmacy carveout from their legacy-company health plans, which is commonly done for larger businesses. Or, they could find a health plan that utilizes a transparent PBM.

Companies that do so know that incentives will be aligned among the PBM, the payer and member. Many transparent PBMs will also improve employees’ drug choices by providing their respective costs and arming them with real-time information about which drugs are effective treatment options.

Regardless of the path to reducing prescription drug costs, a fundamental starting point is transparency — supplying all stakeholders with clear data on where the money is going and what it’s for. That will enable companies, payers and patients to make better decisions.

Health Care Spending For Mental Health Disorders Increases Between 2013 And 2020

Health care spending for mental health disorders increases between 2013 and  2020 | BenefitsPRO

Source: BenefitsPRO, by Michael Popke

Overall spending on mental health services increased from 6.8% to 8.2% between 2013 and 2020, according to a new study published by the Employee Benefit Research Institute (EBRI).

“Approximately 1 in 5 adults and 1 in 6 youth experience mental illness each year, and these rates have been rising,” Paul Fronstin, director of EBRI’s Health Benefits Research and co-author of the study, says in a statement. “Over 20 million Americans have a substance use disorder. The COVID-19 pandemic has exacerbated mental health issues nationally and in the workplace. With increases in both the number of individuals diagnosed with mental health disorders and use of health care services, higher spending is of great concern to plan sponsors of health benefit programs.”

Here are five key findings from EBRI’s research:

  1. 1. The percentage of the population under the age of 65 with employment-based health coverage diagnosed with a mental health disorder increased from 14.2% in 2013 to 18.5% in 2020.
  1. 2. Use of mental health care services increased between 2013 and 2020, and use of outpatient services increased the most. The percentage of enrollees using outpatient services increased from 12% to 16%, a 33% increase.
  1. 3. Among enrollees with a mental health diagnosis, average annual spending on mental health care services increased from $1,987 to $2,380 between 2013 and 2020 — an average of 3% per year.
  1. 4. Spending on outpatient mental health services increased 37%, while spending on prescription drugs for mental health disorders fell 15%.
  1. 5. Outpatient mental health care services accounted for two-thirds of total spending in 2020, up from just over one-half in 2013.

“Employers and workers spent nearly $77 billion on mental health disorders in 2020,” Fronstin adds. “Employers are looking for ways to address the mental health needs of workers given the current economic climate, and they are especially interested in addressing mental health needs because of the connection between depression and productivity losses. Taking responsibility for workers’ mental health may not only reduce spending on health care but may increase worker productivity.”

Last Updated 10/05/2022

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