Ohio attorney general sues pharmacy benefit managers, calling them ‘gangsters,’ and other notes from around the interweb:

• Ohio attorney general sues pharmacy benefit managers, calling them ‘gangsters’. The music has stopped. Calling them “modern gangsters,” Ohio Attorney General Dave Yost on Monday accused pharmacy benefit managers of illegally driving up drug prices for patients who rely on insulin and other key medications. “Medications shouldn’t cost an arm and a leg, metaphorically or literally,” Yost said in a written statement. “Insulin is just a symptom of the problem; PBMs are the disease.” Yost filed a lawsuit in Delaware County Common Pleas Court against Express Scripts, Prime Therapeutics, Ascent, Humana Pharmacy Solutions and two parent companies. He alleges the companies colluded to control drug prices and have failed to live up to promises to negotiate lower drug prices from manufacturers and deliver those savings to patients. Instead, Express Scripts created a complex ‘pay to play’ rebate scheme that pushes manufacturers to boost drug prices to get their medications on preferred lists.

• The CAA will ensure that doing the right thing is the only option. The CAA will soon begin holding employers accountable for upholding their fiduciary responsibility and exploring insurance options that lower the cost of employee health care. Word is circulating that the CAA may allow employees to sue employers if they don’t effectively manage their health care benefits. Even though the idea of employees taking legal action against their employers regarding health care benefits sounds terrible, if this interpretation is correct, it should have a positive effect on the health care industry. Should employers be worried about this new eventuality? No, not all of them. Most employers want to help their people — they just don’t fully understand that they have options. The new CAA guidelines will push employers and their brokers to explore other avenues that lower health care costs. It is simply establishing a framework to protect employees from medical debt — the leading cause of bankruptcy in the United States.

• Claims Cost Transparency: Using Data to Optimize Medical Benefits Costs. Employee benefits are the second largest budget item in employee compensation, with medical benefits consuming the bulk of that cost. Yet, companies with fully insured medical plans often have limited financial transparency and control when it comes to managing these costs. Try viewing the actual, full cost for a broken ankle, and you’ll see that pricing is not so transparent. Companies that know and understand their medical & Rx claims can make decisions that will improve plan utilization and reduce overall costs. Claims cost analysis allows you to drill down into the data and see what you need in your health plan to boost utilization and get your employees and their families better care. Many small and mid-size companies have fully insured plans, allowing for a fixed monthly cost. The carrier creates a pool, lumping your company with others. The carrier may determine your rate based on costs for the entire pool, meaning you’ll pay a set cost whether your company’s claims are higher or lower than average. When it comes to data, however, fully insured plans may not provide transparency or flexibility. They offer some claims data, but the carrier owns all of it, including your high claimant utilization.

• The 2023 specialty drug pipeline. “We’re in a whole new world. The specialty world has taken over,” said Jeffrey Casberg, M.S. Casberg, senior vice president of pharmacy of IPD Analytics, and his colleague, Leslie Fish, Pharm.D.. vice president of pharmacy at the Aventura, Florida, pharmaceutical analytics, and consulting firm, gave an hourlong tour of that world on the final day of the annual meeting of the Academy of Managed Care Pharmacy in San Antonio. More specifically, they thumbnailed the thirty-one specialty drugs in late-stage development that have been or are likely to be approved by the FDA this year. It is a group that includes the first gene therapy for hemophilia A and Duchenne muscular dystrophy, the first treatment for a rare neurological disorder called Friedreich’s ataxia that may have off-label uses, a third anti-beta amyloid drug for Alzheimer’s disease, an oral treatment for Clostridioides difficile that might preferable to treatment delivered rectally that is currently on the market, and three different vaccines for respiratory syncytial virus, one of which is going to have Magic Johnson as a spokesperson. Nearly 80% of the drugs that the FDA is expected to approve this year are specialty drugs, a category that is getting increasingly difficult to define but includes drugs for rare diseases or need special handling.

Study Sheds Light on Concerning New Trend in Drug Advertising and other notes from around the interweb:

• Top 20 GoodRx Competitors & Alternatives. GoodRx is a leading online platform that helps consumers compare prescription drug prices and offers discounts on their medications. GoodRx is the go-to source for many and is the leading online resource for free prescription drug coupons and discounts. Several of GoodRx’s competitors also provide prescription drug coupons and discounts, such as Blink Health, SingleCare, NeedyMeds, RxSaver, WellRx, Truepill, WeRx, and Optum Perks. Each of these companies offers different services and discounts, so customers research and find the best option for their needs. Here’s a look at top GoodRx competitors and alternatives and how they compare.

• The CAA will ensure that doing the right thing is the only option. The CAA will soon begin holding employers accountable for upholding their fiduciary responsibility and exploring insurance options that lower the cost of employee health care. Word is circulating that the CAA may allow employees to sue employers if they don’t effectively manage their health care benefits. Even though the idea of employees taking legal action against their employers regarding health care benefits sounds terrible, if this interpretation is correct, it should have a positive effect on the health care industry. Should employers be worried about this new eventuality? No, not all of them. Most employers want to help their people — they just don’t fully understand that they have options. The new CAA guidelines will push employers and their brokers to explore other avenues that lower health care costs. It is simply establishing a framework to protect employees from medical debt — the leading cause of bankruptcy in the United States.

• How Accumulators and Maximizers May Be Increasing Your Out-of-Pocket Drug Costs. A copay accumulator adjuster program is a type of health insurance program that affects people using biopharmaceutical patient assistance programs, which are usually provided by a drug manufacturer to help reduce the cost of taking the medication. Accumulator programs don’t allow patient assistance through the pharmaceutical industry to count toward the deductible set by the insurance company. For example, let’s say your patient assistance card has a $6,000 limit and your deductible is $6,000. After that $6,000 is covered by the patient assistance program, you still have to pay $6,000 out-of-pocket since none of it was counted toward the deductible with an accumulator adjuster program, per the Global Healthy Living Foundation (GHLF). “It started about five years ago when the pharmacy benefit management companies started introducing the accumulator program marketplace, so they convinced a lot of employers to pick it up as part of their benefit design,” says Robert Popovian, PharmD, Chief Science Policy Officer at GHLF. “But it’s not just about the accumulators. The next iteration is the maximizer program, which is a little different, but the same principle applies.

• Study Sheds Light on Concerning New Trend in Drug Advertising. The study, published this week in the Journal of Medical Internet Research, provides some of the first insights into the burgeoning, loosely regulated world of so-called “patient influencers,” sharing findings from 26 in-depth interviews about why and how they do it. “The bottom line here is that patient influencers act as a form of interactive direct-to-consumer (DTC) advertising, sharing their knowledge and experiences on pharmaceutical drugs with communities of followers in which they wield great influence,” said author Erin Willis, an associate professor of advertising, public relations, and media design. “This raises ethical questions that need more investigation.” The study comes amid growing concerns about the harmful consequences of drug promotion on social media. In recent weeks, in the wake of a slew of TikTok videos and Twitter posts touting the weight loss benefits of the diabetes drug Ozempic, patients who need the medication to manage their disease have faced global shortages. Meanwhile, those taking it “off-label” to slim down have experienced surprising side-effects, including violent diarrhea and extreme facial thinning. “This is a great example of the power of social media and the unintended consequences,” said Willis.

A self-insured employer gets hit with $50 million in claims for just two members and wants the stop loss carrier and PBM to pay up. When pharmacy benefits are loosely managed, self-insured employers play right into the hands of drugmakers, rebate aggregators, non-fiduciary PBMs, and specialty pharmacies who all stand to benefit financially. Micromanaging a pharmacy benefit can nonetheless lead to very satisfied participants and improved medical outcomes.

Micromanagement refers to a management style where a manager closely observes and controls the work of their employees, often involving themselves in every aspect of their work. Micromanagers tend to be excessively controlling and directive, often providing constant feedback and criticism.

Advantages of micromanagement:

• Helps ensure that work is being done correctly and efficiently
• Allows for immediate correction of mistakes or problems
• Provides a high level of detail and precision in the work being done
• Can be useful in situations where there is a high level of risk or complexity

Disadvantages of micromanagement:

• Can create a negative work environment, leading to demotivated PBM employees and high turnover rates
• Can lead to a lack of creativity and innovation, as PBM employees may feel discouraged from taking risks or trying new things
• Can be time-consuming and create unnecessary work for the PBM
• Can limit the development of employee skills and independence, as they may become overly reliant on the broker’s or consultant’s guidance.

Overall, while micromanagement can have some benefits in certain situations, it is generally not considered an effective workplace management style as it can lead to a range of negative consequences for both employees and the organization as a whole. A more hands-off approach that focuses on trust, collaboration, and empowerment tends to be more effective in promoting a positive work culture and achieving long-term success.

However, in pharmacy benefits management, micromanagement is the rule not the exception. Loose management of the pharmacy benefit is all fine and dandy until a self-insured employer gets hit with $50 million in claims for just two members. Poor utilization management by PBMs doesn’t show up in RFPs even though it is a major cost driver.

The claims in question herein would have never made it through the TransparentRx clinical review process. Few PBMs in their PA workflow adhere to FDA-approved labeling, patient selection criteria, and clinical trial check points. Micromanagement of the pharmacy benefit acts as a de facto insurance policy.

The List of PBM Formulary Exclusions Grew in 2023 and other notes from around the interweb:

• The List of PBM Formulary Exclusions Grew in 2023. Several of the omitted products can be cheaper list-priced generics or biosimilars that the PBMs ignore in favor of branded pharmaceuticals. Critics of the practice claim that brand manufacturers’ rebates are frequently to fault for this behavior, even though patients may be saddled with increased copays. Formulary exclusions were first used by major PBMs in 2011. The white bagging practice, in which payers decline to cover physician-administered pharmaceuticals unless they are delivered (white bagged) to the physicians by an authorized pharmacy, has contributed to the spread of the exclusions from the pharmacy benefit to the medical benefit side. A lot of states are taking legislative action to control white bagging. Plans can no longer refuse to pay suppliers for providing medications given by clinicians in Louisiana. Moreover, insurers are required to cover medical and pharmaceutical benefit pathways under Arkansas’ anti-white bagging rule, which only pertains to hematology and oncology. The preferred pathway is up to the patient and the physician.

• Federal Judge Rules Cheaper Drugs Can Be Imported From Canada. In a setback to the pharmaceutical industry, a federal judge has tossed a lawsuit that sought to prevent state governments from importing medicines from Canada. And the decision is likely to embolden more states to now consider the approach as they look to lower the cost of prescription drugs. The 26-page ruling noted that to have standing, plaintiffs must prove that they have suffered an “injury in fact,” that the injury is traceable to the defendants’ conduct, and that the injury is likely to be remedied by a favorable decision. And in two distinct aspects, the plaintiffs had no standing to bring the case against the federal agencies, Kelly ruled. The DC Circuit Court has struck a blow against the pharmaceutical lobbying group PhRMA and other plaintiffs’ attempt to stop states from importing drugs from Canada. Joined alongside public health group Partnership for Safe Medicines and advocacy group Council for Affordable Health Coverage, PhRMA was rebuffed by Judge Timothy Kelly, who dismissed the civil suit due to a lack of standing.

• California Gov. Gavin Newsom ends $54 million Walgreens contract over abortion pill dispute. Mifepristone is a pill that when combined with another pill will end a pregnancy. The U.S. Food and Drug Administration approved the pill in 2000 for use in up to the 10th week of pregnancy. Today, more than half of all abortions in the U.S. are done by pills, according to the Guttmacher Institute, a research group that supports abortion rights. After the U.S. Supreme Court last year overturned the federal right to an abortion, more than a dozen states have restricted the use of abortion pills. But those restrictions are being challenged in court. Attorneys general in twenty states, mostly with Republican governors, have warned Walgreens and CVS they could face legal consequences if they sell abortion pills in their states. Last week, Walgreens confirmed it sent a response to each attorney general saying it would not dispense the drug in their states. Newsom responded to that news on Monday, posting in a message on Twitter that California won’t be doing business with Walgreens “or any company that cowers to the extremists and puts women’s lives at risk.”

• Top Threats, Priorities in Employer-Sponsored Health Plan Benefits. Employers shared the main threats and priorities that they encounter as they try to manage employer-sponsored health plan benefits, according to a survey from the Midwest Business Group on Health (MBGH). The organization surveyed almost 60 large, self-insured employers from a broad span of industries. The survey was conducted in 2022. The top three threats to employer-sponsored healthcare coverage according to employer respondents were: high-cost pharmacy claims (94 percent), medical inflation (91 percent), and extremely expensive therapies with Food and Drug Administration approval (91 percent). Other obstacles included expensive medical claims, specialty drug spending, and high-cost patient populations. In response to these and other threats, employers highlighted certain priorities, from managing pharmacy costs to bolstering mental healthcare services. Nearly all the employers indicated that engagement in programs and benefits was a key priority for their health benefits strategies (96 percent) as well as communication around health benefits (94 percent). Over 90 percent of employers also mentioned that financial wellness, mental health, well-being, chronic disease management, preventive care services, and specialty drug management were also priorities. Most employers also agreed that diversity, equity and inclusion and the culture around health in their companies were priorities.

Drugmakers circumvent health plan sponsors’ benefit designs at the switch to have expensive brand pharmaceuticals dispensed. Why don’t decision-makers protest this more? By delivering eVouchers, or electronic vouchers, for pricey prescriptions at the “Switch,” brand drugmakers are getting past pharmacy coverage plan designs. The switch determines which PBM, or health plan, is to receive the third-party prescription claim and is linked to the drug. In a matter of seconds, the prescription leaves the pharmacy, makes its way to the switch, and is then sent to the PBM.

When the benefit design incorporates inadequate UM or utilization management restrictions, such as mandatory generic enforcement or step therapy drugmakers can use eVouchers to replace a tier 1 drug with a tier 2-4 drug or, worse yet, a non-formulary drug (see process flow diagram below). The two largest switch providers are Relay Health and Change Healthcare. Relay Health describes how its electronic voucher program is a Win-Win-Win resolution in the following way:

• Doctors “set aside concerns over costs”
• “Patients benefit from lower copays” and “increased adherence”
• Manufacturers benefit from increased “scripts written”, “the likelihood patients will fill and adhere to them” and “increased brand loyalty”

What about the health plan sponsor, though? Despite the fact that you pay most of the expenses, you are conveniently ignored. I demonstrate in our Certified Pharmacy Benefits Specialist (CPBS) course how plan sponsors, while knowing the least about how it operates, fund the whole US prescription drug system. Simply put, they are interested in your wallet. The switch operators’ eVoucher schemes have a huge budgetary impact on health plan sponsors, and that influence is only getting bigger over time.

There are two ways to stop the scenario from occurring:

(1) PBM inserts a provision prohibiting the action into its contract with the Switch firm
(2) Benefit design maximizes the toolset for managing drug utilization, which includes mandatory generic enforcement programs, step therapy, refill to soon, and prior authorization just to name a few

Number two is challenging since many plan sponsors are adamant that employees receive the medications they desire without any restrictions (i.e. step therapy). Even though I disagree, it’s not my checkbook. The goal is to produce better health care outcomes at the lowest possible cost, not to save employees from the “discomfort” of managing an effective pharmacy benefit plan. In a way, pharmaceutical companies and non-fiduciary PBMs are taking advantage of HR’s desire to maintain employee “happiness.”

Drugmakers circumvent health plan sponsors’ benefit designs at the switch is a hidden cost. The decision for TransparentRx is straightforward: either you want an efficiently run pharmacy benefit program for your people or you don’t. Expect to spend $1,000 for a drug when, for instance, a $100 drug would have delivered the same degree of efficacy. eVouchers are an expensive proposition for health plan sponsors but a profitable one for brand drugmakers, especially when supplemented with direct-to-consumer TV commercials for expensive brand pharmaceuticals and soft utilization management measures.

Top threats and priorities in employer-sponsored health plan benefits and other notes from around the interweb:

• Federal Judge Rules Cheaper Drugs Can Be Imported From Canada. In a setback to the pharmaceutical industry, a federal judge has tossed a lawsuit that sought to prevent state governments from importing medicines from Canada. And the decision is likely to embolden more states to now consider the approach as they look to lower the cost of prescription drugs. The 26-page ruling noted that to have standing, plaintiffs must prove that they have suffered an “injury in fact,” that the injury is traceable to the defendants’ conduct, and that the injury is likely to be remedied by a favorable decision. And in two distinct aspects, the plaintiffs had no standing to bring the case against the federal agencies, Kelly ruled. The DC Circuit Court has struck a blow against the pharmaceutical lobbying group PhRMA and other plaintiffs’ attempt to stop states from importing drugs from Canada. Joined alongside public health group Partnership for Safe Medicines and advocacy group Council for Affordable Health Coverage, PhRMA was rebuffed by Judge Timothy Kelly, who dismissed the civil suit due to a lack of standing.

• 7 Key Facts About Biosimilars. When describing biosimilars to patients, remind them that in their simplest form, medications are chemical structures, with some comprising simple, small molecules or pieces, while others are more complex. Biosimilars are made of complex chemical structures. Because biosimilars are complex medications, there are often products that treat complex conditions, such as insulin for diabetes and other biosimilars for conditions, such as multiple sclerosis or psoriasis. Many biosimilars are dispensed by specialty pharmacies, which provide medications that are typically expensive for medical conditions that are intricate and often difficult to treat. The FDA approved the first biosimilar, Zarxio (filgrastim-sndz) on March 6, 2015, for the reference product Neupogen. Zarxio was approved for all indications included on the reference product’s label, which is not the case for all biosimilars.

• Top Threats, Priorities in Employer-Sponsored Health Plan Benefits. Employers shared the main threats and priorities that they encounter as they try to manage employer-sponsored health plan benefits, according to a survey from the Midwest Business Group on Health (MBGH). The organization surveyed almost 60 large, self-insured employers from a broad span of industries. The survey was conducted in 2022. The top three threats to employer-sponsored healthcare coverage according to employer respondents were: high-cost pharmacy claims (94 percent), medical inflation (91 percent), and extremely expensive therapies with Food and Drug Administration approval (91 percent). Other obstacles included expensive medical claims, specialty drug spending, and high-cost patient populations. In response to these and other threats, employers highlighted certain priorities, from managing pharmacy costs to bolstering mental healthcare services. Nearly all the employers indicated that engagement in programs and benefits was a key priority for their health benefits strategies (96 percent) as well as communication around health benefits (94 percent). Over 90 percent of employers also mentioned that financial wellness, mental health, well-being, chronic disease management, preventive care services, and specialty drug management were also priorities. Most employers also agreed that diversity, equity and inclusion and the culture around health in their companies were priorities.

• For commonly used medications, employer-sponsored plans pay up to 3,350 percent higher than Medicare. According to a research letter published in JAMA Health Forum and based on data from employer-sponsored insurance, Medicare pays substantially lower rates for medications prescribed by doctors. From 2016 through 2020, researchers at the Healthcare Cost Institute examined the per-unit costs of the 10 most costly and 10 most often used prescription medications. Employer-sponsored insurance paid costs that were up to 3,350 percent more than Medicare for the most frequently used medications. Employer-sponsored insurance paid 20 times more for ondansetron and paid 30 times more for midazolam than Medicare did for the same medication. The researchers discovered that employer-sponsored plans did not pay as high markups for the most expensive medications. At the top end, markups were 54% higher than Medicare, and several medications were covered at rates comparable to Medicare by employer-sponsored plans.