Pharmacy Briefing: December 2020

Pharmacy Briefing is a monthly summary of select U.S. Food and Drug Administration (FDA) approvals and launches, treatment guidelines and research updates, and other newsworthy events that have the potential to impact commercial drug utilization or costs.

Highlights
  • FDA grants Emergency Use Authorization for Pfizer/BioNTech COVID-19 vaccine
  • Amazon enters retail pharmacy sector, launches Amazon Pharmacy
  • United Kingdom approves Pfizer/BioNTech COVID-19 vaccine
  • Kaiser Family Foundation report describes COVID-19’s effect on national health spending and utilization
FDA Approvals and Launches
  • Sesquient (fosphenytoin injection) is approved to treat status epilepticus.
  • Flu treatment Xofluza (baloxavir marboxil) receives additional indication for use in flu prevention (post-exposure prophylaxis).
  • Oxlumo (lumasiran) is approved to treat primary hyperoxaluria type 1, a rare genetic disorder.
  • Orladeyo (berotralstat) is approved to treat hereditary angioedema.
News

FDA grants Emergency Use Authorization for Pfizer/BioNTech COVID-19 vaccine

  • The decision follows a recommendation from the agency’s Vaccines and Related Biological Products Advisory Committee.

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Amazon enters retail pharmacy sector, launches Amazon Pharmacy

  • The online pharmacy can service patients with or without insurance and provides free two-day delivery for Prime members.
  • The service currently comes with some limitations.
    • No option of 90-day fills or automatic refills.
    • Examples of unavailable products include diabetic testing supplies, schedule II-controlled substances, specialty medications, and liquid suspensions.

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Kaiser Family Foundation report describes COVID-19’s effect on national health spending and utilization

  • As of the third quarter (Q3) 2020, authors found a decrease of 2.4% in non-pharmaceutical health spending relative to the same period in 2019.
  • As of October 2020, pharmaceutical spending increased 6.3%.

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HHS and FDA under legal pressure against drug importation final rule

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FDA advisory committee rejects endorsement of investigational Alzheimer’s drug aducanumab

  • The drug, if approved, would be the first Alzheimer’s treatment approved in over 17 years.

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U.S. Department of Health and Human Services (HHS) Special Fraud Alert warns against prescription kickback loophole

  • The alert highlights the practice of drug manufacturers awarding high-prescribing healthcare providers with speaking deals worth potentially hundreds of thousands of dollars.
  • HHS cautions that this practice violates federal anti-kickback statutes.

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OptumRx publishes Q4 Drug Pipeline Insights Report

  • The report highlights five drugs with FDA decisions in the near future, including novel cholesterol drug inclisiran.

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United Healthcare delays implementation of Accumulator Adjustment – Medical Benefit program

  • The program faced public backlash from several groups including the American Academy of Family Physicians and American Medical Association.

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Clinical Trials and Research

Pfizer/BioNTech and Moderna produce positive COVID-19 vaccine trial results

  • As a result of the clinical trial data, the manufacturers of the two vaccines have submitted requests for Emergency Use Authorization to the FDA.
  • The vaccines require two separate doses to achieve full efficacy.

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United Kingdom becomes first country to approve a COVID-19 vaccine

  • The country approved the vaccine developed by manufacturers Pfizer and BioNTech.
  • As of December 9, Bahrain and Canada have also approved the same product.

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Investigational long-acting HIV drug, cabotegravir, achieves endpoints in superiority trial

  • The injectable drug is dosed once every two months and was found to be more effective than daily Truvada (emtricitabine/tenofovir disoproxil fumarate) at preventing HIV transmission in women.

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How will HHS and CMS rules impact Medicare drug pricing?

A final rule by the U.S. Department of Health and Human Services (HHS) and an interim final rule by the Centers for Medicare and Medicaid Services (CMS) that focus on drug costs in Medicare Part B and Part D were recently published.  

While the rules were released as final and interim final, respectively, the road ahead is uncertain. It appears likely the rules will face legal challenges prior to or after the effective dates of their provisions. It is difficult to predict whether the policies finalized in these rules will reduce the total cost of drugs for the government and Medicare beneficiaries as intended. 

Milliman professionals explore the two rules and explain their implications for Medicare drug pricing in this article

Pharmacy Briefing: November 2020

Pharmacy Briefing is a monthly summary of select U.S. Food and Drug Administration (FDA) approvals and launches, treatment guidelines and research updates, and other newsworthy events that have the potential to impact commercial drug utilization or costs.

Highlights
  • Kaiser Family Foundation releases 2020 Employer Health Benefits Survey
  • Price and cost-sharing rules are finalized requiring insurers to disclose negotiated prices and cost-sharing information
  • Most-favored nation and point-of-sale rebate regulations finalized
  • Federal government partners with retail pharmacies to promote access to future COVID-19 vaccines
  • Veklury (remdesivir) is FDA-approved to treat COVID-19 in patients requiring hospitalization
  • World Health Organization (WHO) study finds no reduction in mortality rates associated with COVID-19 patients treated with remdesivir
FDA Approvals and Launches
  • Veklury (remdesivir) is approved to treat COVID-19 in patients requiring hospitalization.
  • Ultomiris (ravulizumab-cwvz) 100 mg/mL is approved to treat certain blood disorders.
    • The formulation improves upon the 10 mg/mL formulation by allowing for reduced infusion times.
  • Eysuvis (loteprednol etabonate) ophthalmic suspension is approved to treat dry eye disease.
  • Inmazeb (atoltivimab/maftivimab/odesivimab-ebgn) is approved to treat the Ebola virus.
  • Bronchitol (mannitol) inhalation powder is approved to treat symptoms of cystic fibrosis.
Continue reading

Evolving landscape of preventive services

The introduction of the Patient Protection and Affordable Care Act (ACA) brought about many legislative changes intended to improve the health of people in the United States. One such change was the introduction of mandatory coverage with no cost sharing for services determined to be “preventive.” Some examples of the services included on the A and B Recommendations lists of the U.S. Preventive Services Task Force (USPSTF) are blood pressure screening for adults, depression screening for adolescents and adults, intimate partner violence screening for women of reproductive age, and skin cancer behavioral counseling.

The USPSTF regularly updates its recommendations and the ACA preventive services list has been modified many times since the introduction of the ACA in 2014. In this paper, Milliman’s Barbara Collier and Michelle Klein examine the evolution of preventive services. They also discuss how these services have been impacted by the COVID-19 pandemic.

Five financial statements considerations for health actuaries to think about

Health actuaries have seen unprecedented challenges this year because of the ongoing COVID-19 pandemic. It has disrupted all facets of the U.S. healthcare system. How the pandemic affects an insurer’s financial statement will vary based on the distribution between lines of business, areas of service, and support channels.

As chief financial officers and actuaries attempt to determine the pandemic’s effect on year-end financial statements, the following five issues will require additional attention:

  1. Premium deficiency reserves
  2. Provider financial solvency
  3. Incurred but not reported (IBNR) claim estimates
  4. Patient Protection and Affordable Care Act (ACA) risk adjustment
  5. Appropriate documentation

Milliman’s Catherine Murphy-Barron, Doug Norris, and Daniel Perlman take a closer look at these five issues in their article “Year-end health actuarial work: Five things to consider in light of COVID-19.”

How will the pandemic impact Medicare Advantage revenue and risk scores in 2021?

While there is a great deal of focus on resource availability and handling a potential influx of severe inpatient cases resulting from COVID-19 infections, the majority of the United States saw a dramatic reduction in healthcare services around March and April 2020 and measurable reductions continue with great variation across the nation. 

As with many prospective risk adjustment models, Medicare Advantage (MA) and Part D (PD) risk scores are based on medical claims, more specifically diagnoses from face-to-face visits from the year prior to the year in which the risk score drives revenue. For 2021 MA payments, 2020 diagnoses are the basis of the final risk scores. To the extent that beneficiaries delay or avoid care, there may be fewer face-to-face encounters with providers where diagnoses can be recorded and applied toward 2021 risk scores.  

While the Centers for Medicare and Medicaid Services has announced additional flexibilities in including telehealth-based diagnoses in risk score calculations, a significant reduction in overall services is likely to result in a material reduction in both MA and PD risk scores. In this article, Milliman’s Rob PipichKarin Cross, and Deana Bell discuss the results of an analysis they performed to support 2021 MA and PD bids. They present nine scenarios intended to illustrate a range of potential outcomes on 2021 MA and PD risk scores.