Tag Archives: specialty pharmacy

Hepatitis C treatments: Emerging trends

The high cost of therapy for patients with chronic hepatitis C (HCV) infection has been an important topic of discussion for key stakeholders in pharmacy benefit design and management. Multiple effective treatments have been introduced, with cure rates approaching 100%.

Although costly, curing HCV early on can prevent serious liver complications, such as hepatic cirrhosis, organ failure, and cancer, for the approximately 2.7 million affected people in the United States.

Trends
In 2016, there was a downward cost and utilization trend for the HCV Specialty category. Express Scripts reported in its 2016 Drug Trend Report that utilization of HCV therapies had decreased by 27.3% and the unit cost had decreased by 6.7%. The cost per member per year (PMPY) for HCV drugs decreased to $25.26 PMPY from $38.44 PMPY the previous year.

Why have cost and utilization suddenly decreased after two years of steady growth?

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State laws limit the interchangeability of biosimilars

sarah-burnettBiosimilars have been on our radar for a while. With Europe leading the way, this fall marks 11 years of the European Medicines Agency’s biosimilars guidelines with 20 biosimilars approved corresponding to seven different reference drugs. As part of the Patient Protection and Affordable Care Act (ACA) in 2010, President Obama amended the Public Health Service Act (PHS Act) to create an abbreviated Biologic License Application (BLA) regulatory process for biosimilars, which has yet to catch on for a variety of reasons.

Key challenges in the U.S. regulatory environment remain for establishing interchangeability for biosimilars. Drug interchangeability allows for substitution for the less expensive biosimilar version of the brand-name biologic (reference drug). The U.S. Food and Drug Administration (FDA) can classify biosimilars as interchangeable. However, state legislatures can regulate the substitutability by requiring a biosimilar in question to be first approved as interchangeable by the FDA. These regulatory hurdles thus create limits at the prescriber level to prevent substitution. So far, only two products have gained full FDA approval yet are not considered interchangeable; it is estimated that many more biosimilars are currently in development.

Before biosimilars flood the market en masse, states were taking measures to assure their regulation. In the United States, 23 states and Puerto Rico have passed legislation in the past three years to regulate the substitutability of biosimilars. The National Conference of State Legislators outlines the substitution laws for each state with an enacted law here. The common threads to the legislation are summarized below:

FDA approval. All biosimilar products seeking substitutability status must be approved by the FDA. The FDA has yet to approve a biosimilar as an interchangeable drug.

Prescriber decides. Substitution of a biosimilar for another product can be prohibited by the prescriber. In such cases, “dispense as written” or “brand medically necessary” must be noted on the prescription.

“Notification” versus “communication.” Previous legislation in 2013 and 2014 required that prescribers be notified of legally permitted substitutions made at a pharmacy. In 2015, language regarding “notification” was adjusted to allow certain “communications” to be sufficient for drug substitutions. These “communications” included notation in an electronic medical record, pharmacy benefit management (PBM) files, or pharmacy records shared with prescribers. The purpose of this language change was to allow prescribers to monitor their patients without causing unnecessary access barriers.

Patient notification. Certain states require that patients be notified of a drug substitution. Stricter versions of these regulations require explicit patient consent before any substitution is made. Documentation of notification and consent are possible barriers to adoption of approved biosimilars.

Records. Any biologic product substitution must be accompanied by records in the prescriber’s medical practice and at the pharmacy.

Immunity. In certain states, laws provide protection to pharmacists who substitute a biologic product in compliance with the state’s laws.

Web lists. States must keep an up-to-date list of permissible interchangeable products that is publicly available.

Cost or pricing. Legislation exists requiring pharmacists to explain the cost or price of a biologic and its interchangeable biosimilar. Five states require that a substitution must have the lowest cost.

Understanding the extent of the state and federal laws regarding substitutability can help employer groups and pharmacy programs estimate the potential cost impact for their organizations. Milliman has done previous research on cost savings for employer groups that take up biosimilars. As more biosimilars are approved, there will be more competition for high-priced biologics and additional drug choices will be available at more affordable prices.

To learn more about Milliman’s pharmacy benefits consulting services, click here.