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Federal court vastly weakens use of copay accumulators; patient groups rejoice
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Insurance companies and pharmacy benefit managers (PBMs) were dealt a blow this week as a federal judge struck down a Trump Administration rule that allowed use of copay accumulators in commercial plans for brand drugs that did not have generic equivalents. The suit was brought against the Department of Health and Human Services (HHS) by 3 patient organizations (HIV+Hepatitis Policy Institute, Diabetes Leadership Council, and Diabetes Patient Advocacy Coalition) and 3 patients and resulted in their vastly limited application: Insurance companies can now only use an accumulator for branded drugs that have a generic equivalent and only in states that allow the use of a copay accumulator (as of summer 2023, 19 states and DC banned their use).
Copay accumulators—a relatively newer pricing tool developed by health insurance companies and PBMs to rein in costs they paid out—do not count amounts paid by drug manufacturers toward a patient’s out-of-pocket (OOP) maximum and deductible. Patients have relied on manufacturer copay assistance to both minimize the costs they pay at the pharmacy counter and contribute toward their deductible. Use of these accumulator tools meant that a patient who relied on a manufacturer copay program did not see their deductible decline throughout the calendar year in accordance with that manufacturer payment, which then also affected their later OOP payments for other drugs. While patient payments still counted, copay assistance from manufacturers—which could total hundreds or thousands of dollars a year toward an individual’s deductible, to the tune of $19 billion in 2022—was not counted, thus essentially extending the amount of time an insurer did not have to cover all costs once a patient reached the OOP maximum.
The court agreed with plaintiffs that copay accumulators increase patient costs while also enhancing insurance company profits. The court also noted that insurance companies’ use of the programs was “capricious” and “conflicting,” as the rule permitted insurers to decide when they did or did not use such a program, thus affecting what counted toward “cost-sharing” as defined by the Affordable Care Act.
Health insurers had argued that manufacturer copay assistance could steer patients toward higher-cost drugs when a lower-cost generic was available.
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Legislative bytes
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- Senate Finance Committee Chair Ron Wyden (D-OR) and House Energy and Commerce Committee Ranking Member Frank Pallone Jr. (D-NJ) opened an investigation into Medicaid managed care organizations’ (MCOs) prior-authorization practices. The investigation followed a report by the Office of Inspector General finding that numerous Medicaid MCOs had high rates of denial of health services for patients.
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Discover Cencora at ISPOR Europe 2023
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Connect with our teams and global healthcare leaders as we convene in Copenhagen at ISPOR Europe 2023, the leading global conference in Europe for health economics and outcomes research (HEOR).
Meet with us at booth #C3-070.
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Inflation Reduction Act (IRA) corner
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IRA snippets
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- Currently in the lead for the most non-“news” release... “[T]he Biden-Harris Administration announced that all 10 drug companies whose drugs were selected for price negotiation with Medicare for the first cycle of the program have decided to participate in those negotiations.”
- The American Cancer Society Cancer Action Network (ACS CAN) and 21 other advocacy organizations wrote to the Centers for Medicare & Medicaid Services (CMS) asking the agency to weigh off-label treatments and unmet medical needs when developing an initial price offer for the first 10 Part D drugs to face negotiations.
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From valuing cures to CMS assessments to Add-In models, ICER has multiple opportunities for improvement
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On Thursday, PhRMA published a blog post highlighting Cencora’s newly released issue brief, “Valuing potential cures: An examination of ICER’s approach to assessing high-impact single and short-term therapies.” The issue brief and blog identify areas where the Institute for Clinical and Economic Review’s (ICER) single and short-term (SST) framework and application are falling short. The issue brief makes 4 recommendations to address these limitations:
- ICER’s processes for assessing SSTs should embrace full transparency and meaningful stakeholder engagement.
- ICER should uphold its stated processes and the commitments outlined in its SST framework.
- ICER should not employ untested methodologies that lack empirical evidence or scientific justification.
- ICER’s SST assessments should only be one of many tools stakeholders use to inform decision-making.
On Monday, ICER published its “Special assessment to inform CMS drug price negotiation: Eliquis and Xarelto.” The assessment reviewed the comparative clinical effectiveness and value of apixaban (ELIQUIS) and rivaroxaban (XARELTO) for the treatment of nonvalvular atrial fibrillation (NVAF) and was submitted to CMS as part of the public comment process to inform Medicare drug-price negotiations. Although the special assessment includes some familiar comparative- and cost-effectiveness metrics, the framing is different than a standard ICER assessment, with a focus on equal-value life years (evLY) rather than quality-adjusted life years (QALY), and an estimate of “price premiums” rather than the usual health benefit price benchmarks (HBPBs). Another important way the special assessment differs from ICER’s standard assessments is the absence of transparency about the assessment process and the lack of opportunities for stakeholder engagement and comment.
For ELIQUIS, ICER issued a B rating relative to warfarin, indicating high certainty of a small net benefit, and a C+ rating relative to dabigatran, indicating moderate certainty of a comparable or small net benefit. For XARELTO, ICER issued a B rating relative to warfarin, indicating high certainty of a small net benefit, and a C rating relative to dabigatran, indicating high certainty of a comparable net benefit.
Reflecting the CMS guidance against the use of QALYs, ICER’s price premium estimates relied on evLYs rather than QALYs. Given the lack of transparency around net prices in the US healthcare system, the price premium estimates are more challenging to interpret than ICER’s typical HBPB estimates. ICER estimates ELQUIS could command an annualized price premium of $1,260-$4,350 over warfarin and $240-$530 over dabigatran. For XARELTO, ICER estimates an annualized price premium of $1,100-$3,920 over warfarin and no premium pricing relative to dabigatran.
It remains to be seen whether this type of information is of use to CMS and to what extent ICER will conduct similar assessments in the future. If ICER does continue with such assessments, it will be important for the organization to incorporate transparency and opportunities for stakeholder engagement, in keeping with its principles.
Last week, ICER’s monthly ICER Analytics Update newsletter announced a new offering for subscribers: Add-In models. ICER said, “These models will focus on new entrants in classes previously assessed by ICER. Our first ICER Analytics Add-In model of donanemab for the treatment of Alzheimer’s disease was demoed during the Conference and will be released to subscribers next month.” As with ICER’s special assessment, Add-in models raise potential concerns related to transparency and stakeholder engagement. ICER’s standard assessment process includes multiple opportunities for stakeholder engagement and a commitment to economic model transparency. We look forward to more information about this offering and hope that ICER does not proceed with including new entrants—that have not been previously assessed by ICER—in a firewalled model update without transparency and opportunities for meaningful stakeholder engagement.
Other value assessment stories that caught our eye:
- No thru traffic—Evidence Street becomes a dead end: Visitors to the Blue Cross Blue Shield Association’s Evidence Street website are greeted with a message stating, “This platform will sunset effective December 29, 2023.”
- No value without equity: The Innovation and Value Initiative released a new report in its ongoing series on equity in health technology assessment, “Fulfilling the promise of equity in value-based care: A focus on power, people, and processes in health technology assessment.”
- A Journal of Managed Care + Specialty Pharmacy study concluded that despite the high and increasing cost of oncology drugs, and greater competition in some indications, payers in the US have not significantly increased their level of management in oncology from 2017 to 2022. However, the study found that some value-based tools are becoming more important, specifically pathways of care and the ICER reviews.
If you need assistance with all things value assessment or ICER-related, please contact Kimberly Westrich.
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Information buffet (AKA, other stuff that caught our attention)
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- The Congressional Budget Office (CBO) announced it will consider cost savings when it analyzes legislation involving anti-obesity medications, if new research shows anti-obesity medications will save money for the healthcare system. The Office suggested Congress consider tailoring its Medicare coverage legislation to those specific conditions for which new research shows savings.
- The Medicare Payment Advisory Commission (MedPAC) held its October 2023 meeting yesterday; here is the agenda:
- Considering current law updates to Medicare’s payment rates for clinician services
- Examining staffing ratios and turnover rates in nursing facilities
- An alternative method to establish Medicare payments for select conditions treated in inpatient rehabilitation facilities
- Workplan: Prices of generic drugs under Part D
- Biopharmaceutical manufacturers including AbbVie, Amgen, Gilead, Merck, and Novartis have formed a new 31-member industry coalition, the Partnership for the US Life Science Ecosystem (PULSE), that plans to battle a proposed overhaul of federal antitrust guidelines and advocate for “pro-innovation” mergers and acquisitions in the sector.
- Biogen announced the Food and Drug Administration approved TOFIDENCE (tocilizumab-bavi) intravenous formulation, a biosimilar monoclonal antibody referencing ACTEMRA (tocilizumab). TOFIDENCE is approved for the treatment of moderately to severely active rheumatoid arthritis, polyarticular juvenile idiopathic arthritis, and systemic juvenile idiopathic arthritis. Biogen has not announced a launch timeline. TOFIDENCE is the 43rd biosimilar approved in the US and the first referencing ACTEMRA.
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“The developing market for AOMs [anti-obesity medications] could significantly affect healthcare spending and the federal budget. The most recent available data show that spending on AOMs has increased markedly. CBO has not yet produced a cost estimate for legislation that would expand access to those medications for beneficiaries of government programs such as Medicare, but the agency is monitoring trends in the use of AOMs, along with their prices, effects on health, and coverage by insurance plans. When CBO analyzes such legislation, it will consider the potential offsetting budgetary savings associated with improved health outcomes as well as the direct costs of the medications.”
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– CBO, announcing it will consider cost savings when it analyzes legislation involving AOMs, if new research shows the drugs will decrease costs for the healthcare system. CBO suggested Congress consider tailoring its Medicare coverage legislation to those specific conditions for which new research shows savings.
Source: “A call for new research in the area of obesity,” CBO, October 5
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The largest healthcare strike in US history began Wednesday by roughly 75,000 Kaiser Permanente health system workers seeking better pay, retiree medical plans, and job protections against subcontracting and outsourcing. Strikes are happening at hundreds of Kaiser facilities across California, Colorado, Oregon, Washington, Virginia, and Washington DC.
Source: “75,000 Kaiser Permanente workers strike hundreds of facilities in 5 states, D.C.,” MSN, October 4
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Engage at AMCP Nexus 2023
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Join us in Orlando, FL on October 16-19, 2023, as we proudly support AMCP Nexus 2023. Our line-up of contributions to this year’s event features 6 posters, including platinum and bronze medal winners, plus CPE and podium presentations.
Visit us at booth #715.
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Count on Health Policy Weekly for an at-a-glance view of legislative and regulatory developments and news that impacts the healthcare industry.
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Interim Editor-in-chief
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Corey Ford
Vice President, Reimbursement and Policy Insights
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Managing editor
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Scott Shields
Associate Director, Health Policy
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Contributing editor
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Kimberly Westrich
Director, Value and Access Strategy
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Contributing authors:
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Kylie Matthews | Scott Shields | Kimberly Westrich
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Production:
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Laurie Kozbelt | Frank Jorfi
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Copyright © 2023 Cencora. All Rights Reserved.
1 West First Avenue, Conshohocken, PA 19428
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