Early Alzheimer’s Treatment Saves Medical Costs

Alzheimer’s patients who received medication for the disease ended up costing the health system less and had lower mortality rates, according to a study presented the Alzheimer’s Association International Conference (AAIC) in Toronto last week. “Even with today’s first-generation therapies, early Alzheimer’s treatment has significant potential to benefit the individual with the disease as well as the economy,” said Maria Carrillo, PhD, chief science officer, Alzheimer’s Assn. Christopher Black from Merck said, “Since Alzheimer’s is incurable and progressive, some assume that treating dementia is an unjustified cost drain on our healthcare system, but this study presents compelling arguments for prescribing the standard of care.”

Average health care costs more than tripled in the month after an Alzheimer’s diagnosis. But those receiving an Alzheimer’s treatment had lower health care costs in the month after they were diagnosed compared to those who did not receive a treatment ($5,535 versus $6,711). Though people who initiated taking medications had higher pharmacy costs, their total health expenditure was less than the people who did not take approved medications ($2,207 vs. $2,349 per patient per month).

CMS Proposes to Test Value-Based Payment Strategies for Part B

The Medicare Rights Center sent a letter CMS in support of its proposal to test value-based payment strategies for prescription drugs under Medicare Part B. According to CMS, the Part B prescription drug reimbursement model establishes a perverse incentive to prescribe higher cost medication. The reimbursement is determined by average-sales price plus 6%. CMS wants to test a variety of innovations, many of which are in use in the private insurance market. The new methods are designed to promote the most clinically effective medications, not the most expensive. CMS wants to test multiple strategies that encourage the use of high-value medications, especially those that eliminate or lower cost sharing for beneficiaries and promote evidence-based clinical decision support tools.

Joe Baker, president of Medicare Rights said, We’re confident that CMS’ proposed payment model will preserve beneficiary access to needed prescription drugs while advancing innovative strategies to ensure
that people who need Part B medications receive the highest value care available to them. We believe the proposal can yield results meaningful to today’s beneficiaries through enhanced care quality, and to future generations, through a stronger and more sustainable Medicare program.”

Costly cancer drugs offer little benefit to older patients with colorectal cancer

Fifty-three percent of patients aged 75 and older with advanced colon or rectal cancer take at least three cancer medications, up from 2% 10 years earlier, according to a study in the journal Medical Care. However, survival benefit from costly new drugs that starve tumors is a median of one month, compared with eight months for patients ages 65 to 74. Treatment costs with newer cancer therapies are substantially higher, and side effects can harm quality of life. HealthDay News (3/10)

More Cost Transparency Needed for Cancer Drugs

Consumers don’t have enough information about cost-sharing for Cancer drugs in order to select the best plan in the insurance marketplaces, according to a study by the American Cancer Society. This updated analysis incorporates 2015 data from marketplaces in California, Florida, Illinois, North Carolina, Texas, and Washington. Researchers found that coverage transparency has improved somewhat since 2014, but significant barriers remain for cancer patients. Researchers found the following:

  • Coverage of newer oral chemotherapy medications was limited in some states in 2015.
  • Coverage for intravenous medications, while noted more often than in 2014, was still unclear in most plans.
  • Cost-sharing structures presented in plan formularies did not match those presented on marketplace websites nearly half of the time.
  • Plans continue to place most or all oral chemotherapy medications on the highest cost-sharing tier, presenting transparency and cost barriers for patients.
  • Nearly half of plans placed a generic oral chemotherapy drug on the highest cost-sharing tier, which may constitute a discriminatory cost-sharing design.

The American Cancer Society recommends that the HHS increase transparency of coverage and cost-sharing, ensure adequate access to medically necessary drugs via an exceptions process, make cost-sharing more predictable and affordable for patients, and monitor the marketplace for evidence of discrimination against people with high-cost conditions, such as cancer.

Rules defining essential health benefits leave a great deal of flexibility for insurers in prescription drug coverage, leading to concerns that some plans may not provide adequate coverage for certain diseases. Increasingly, cancer drugs are targeted to specific molecules involved in the growth or spread of particular cancers, meaning that these drugs are not interchangeable, and most are not yet available in generic form.

Biosimilar Medications Could Save Billions

Over the next decade, the United States could save $44 billion by introducing competing biosimilar versions of complex biologic drugs, according to a report by the RAND Corporation. Biologics, which treat conditions, such as cancer and rheumatoid arthritis, are often effective, but expensive. Patient copays can be several thousand dollars a year. In 2011, eight of the 20 best selling drugs were biologics. Also, annual spending on the drugs has grown three times faster than spending for other prescription medications. Introducing biosimilar drugs into the U.S. marketplace is expected to increase competition and drive down prices, saving money for patients, health care payers, and taxpayers. However, savings are not expected to be as dramatic the as savings we have seen for an earlier generation of less-complex generic drugs.

The Affordable Care Act authorizes the FDA to develop a regulatory framework for approving biosimilar drugs. Draft materials released by the FDA suggest that not all biosimilars will be interchangeable with their original counterparts. In addition, nearly all biosimilars will require at least one head-to-head clinical trial to confirm similarity to the original biologic, which is a more-strenuous process than what is required for standard generics. A number of issues will determine the savings and who will benefit. One issue is how much the use of biologics grows as some patients switch to biosimilar drugs as they become more affordable. Patients will see some cost savings. But physicians and hospitals may also benefit because biologicals are often purchased by health providers and administered in clinics and other treatment settings. For more information, visit www.rand.org.

Medicare Drug Plans

UnitedHealthcare introduced its 2015 Medicare health and prescription drug plans with an out-of-pocket maximum. Most plans members will get their medications without paying a separate premium for a stand-alone Part D plan. For 2015, the company is increasing the number of medications on the tier 1 of the formulary for Medicare Advantage-Part D plans. Many of the medications that beneficiaries use most commonly will be available for a lower copay. For example, generic versions of Lipitor, Synthroid, Actos, Coumadin, Fosamax, Singulair and 72 other drugs will move to tier 1. UnitedHealthcare is also lowering prices through its Pharmacy Saver program in 2015, allowing Medicare Advantage members to save even more money on their medications. Members will be able to show their member ID card at participating pharmacies to get select generic medications for as low as $1.50 per 30-day prescription. UnitedHealthcare will offer a choice of Medicare Advantage plans with monthly premiums. These plans will offer additional features or lower cost-sharing. Monthly premiums in 2015 will not change for 60% of UnitedHealthcare’s Medicare Advantage members. More than 22 million Medicare beneficiaries in the company’s 2015 coverage area, including three-quarters of its Medicare Advantage members, will have access to a standard UnitedHealthcare Medicare Advantage plan with a $0 premium beyond the Medicare Part B premium. For more information, visitwww.UHCMedicarePlans.com.

Arthritis Foundation Urges Support for Legislation

During the California Arthritis Foundation Council’s summit on April 22 to 23, arthritis advocates urged California lawmakers to support AB 889, which would ensure that consumers have timely access to arthritis medications. They also urge support for SB 1052, which would ensure that Arthritis patients have the information they need to make more informed decisions on Covered California health plan options.

Wesley Mizutani, MD of the California Arthritis Foundation said, “Californians living with arthritis and other rheumatic conditions need to know if their prescription drugs are covered by insurance and how much they will cost. For example, a constituent with Ankylosing Spondylitis, a type of systemic arthritis, switched to a Covered California plan that offered her medication. She later discovered that her prescription co-pay increased from $5 a month to $2,000 a month. Without this medication, her condition will likely regress and could result in spinal fusion with total spinal immobility, fusion of shoulders and hips, as well as difficulty in breathing.” For more information, visit www.arthritis.org.

It May Be Harder to Get Your Meds in the Exchange Plans

On the exchange plans, branded mental health and oncology medications are extremely likely to be subject to step therapy or prior authorization. In fact, more than 70% of covered drugs require utilization management in exchange plans. HIV/AIDS drugs have the lowest incidence of utilization management, with more than half of exchange plans providing open access to these medications, according to a report by Avalere Health. Caroline Pearson vice president at Avalere says that consumers shopping on the exchange need to look beyond premiums. Patients may be better off with a plan that provides open access to drugs they use regularly. They will need to work closely with their physicians to fulfill utilization management requirements where they exist, she added.

Health plans rely on utilization management to encourage patients to choose lower cost drugs and use the drugs that are most appropriate to their medical condition. However, these tools may block access to needed medications, particularly for vulnerable populations like severely mentally ill patients. Utilization management for mental health drugs is more than four times more common for exchanges compared to employer coverage. Matt Eyles, executive vice president at Avalere said, “The utilization management tools we profiled are not as widely used in commercial insurance settings, so they need to be closely monitored for their effects on consumers and on the clinicians responsible for their administration.” For more information, visit http://avalerehealth.net/expertise/life-sciences/insights/more-controls-on-drug-access-in-exchanges.

Branded Mental Health Meds Under the Exchanges

There may be lower use of branded prescriptions for schizophrenia, bipolar disorder, and depression on the health insurance exchange plans that are set to launch in January 2014, according to an analysis by Decision Resources. “For their patients on exchange-based plans, physicians would like to follow the same treatment pattern they have for their commercial patients. However, formulary design may constrain this behavior as managed care organizations push for generics. This tension will become more pronounced with the launch of newer premium-priced agents over the next few years that will be competing against entrenched therapies,” said Decision Resources senior director, Roy Moore.

More than a third of managed care organizations (MCOs) with a plan on the exchange expect to have a different formulary than the one used in their largest commercial product. The exchange formulary may feature fewer branded therapies, less preferred coverage of brands, and greater restrictions as MCOs seek to reduce costs by favoring generics.

Primary-care providers and psychiatrists expect a 19% to 34% increase in the number of patients they treat for schizophrenia, bipolar disorder, and depression since Medicaid eligibility will expand under the ACA.  Exchange-based plans will account for 17% of their patients in 12 months, highlighting the opportunity for the drug industry in exchanges. Expanded Medicaid eligibility will also present an opportunity for the drug industry, but more restrictive formularies in Medicaid will again favor generics. For more information, visit www.decisionresources.com.

Medicare Drug Coverage Doesn’t Ensure Easy Access to Meds

Consumers with traditional Medicare and Medicare Advantage plans face various hurdles in getting their medications, according to an analysis by HealthPocket. Some plans cover more than twice the number of drugs as do other plans. For 16% of drugs, plans limit the quantity that members are allowed to purchase at one time; 18% of drugs requir prior authorization; and nearly 2% requir step therapy in which a member must first try a less expensive medication. Steve Zaleznick of HealthPocket said, “Annual enrollment is coming up in October…The first step…is to ensure that the drugs they take are on the plan’s formulary, and the second is to look at what restrictions they can face in actually getting the medication in hand.”

Each Medicare plan has a formulary, which lists the drugs that are covered and the consumer’s out-of- pocket costs for those medications in a given year. A consumer would have to pay the full cost of a drug that’s not on the formulary. Plans can restrict access to drugs that are on the formulary by limiting the quantity, requiring prior authorization, and mandating step therapy.

Kaiser plans have no quantity limits or step therapy rules and only 3.5% of its drugs are subject to prior authorization. This model can prove useful to industry and government for new and reformed Medicare and private plans that come online through the Affordable Care Act, according to the analysis. For more information, visit www.HealthPocket.com

Last Updated 09/22/2021

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