Employer Coverage of GLP-1 Drugs Jumps and other notes from around the interweb:

• Employer Coverage of GLP-1 Drugs Jumps. As the popularity of GLP-1 drugs like Ozempic and Wegovy grows, so does the percentage of employers covering the drugs for employees. A new employer survey out June 13 from the International Foundation of Employee Benefit Plans (IFEBP) found that employer coverage of the drugs is up 8 percentage points since last fall, with roughly one-third of companies now offering GLP-1 drug coverage for both diabetes management and weight loss. More than half of employers (57%) currently provide coverage for diabetes only—the original intended use for the drugs—up from 49% in 2023. Perhaps even more significant, 34% provide coverage for both diabetes and weight loss (up from 26% in 2023), according to the benefits organization’s May survey of 279 employers. IFEBP, which counts some 31,000 organizations as members, last surveyed employers abut GLP-1 drugs in October 2023. It’s a big jump that shows employers are getting serious about coverage of the drugs, especially as employees express interest, said Julie Stich, vice president of content at IFEBP.

• Mail-Order Drugs Were Supposed to Keep Costs Down. One employer was paying about $100 for a prescription for a generic antidepressant, though it could be bought elsewhere for about $12. A key tool that businesses have counted on to keep a lid on employees’ drug spending—filling workers’ prescriptions by mail—is now driving up their costs. Unity Care NW, a nonprofit health clinic in Washington state, forecasts the cost of medical and drug benefits for its 365 employees and their family members will increase this year by 25% to more than $3 million. A big reason: Drugs delivered by mail are costing multiples more than those picked up at a store counter. Markups were as much as 35 times higher than what other pharmacies charged, according to a recent analysis of millions of prescriptions in Washington state. The stakes nationally are huge, in a medical market with escalating prescription prices and increasing concentration of medical providers in direct employment by hospital groups.

• The J&J lawsuit should be a wakeup call to the PBM industry — and to companies everywhere. The ongoing legal dispute involving Johnson & Johnson has again thrust the topic of pharmacy benefit managers (PBMs) into the spotlight. Ann Lewandowski, a J&J employee, sued the company for overpaying for its employees’ prescription drugs through its PBM, Express Scripts, claiming that these overpayments resulted in higher health insurance premiums and out-of-pocket drug costs for employees. This lawsuit is a significant entrant in the recent groundswell of efforts to shine light on the traditional PBM industry and its opaque pricing structures and outdated evaluation models. It follows on the heels of probes by government regulators and attention from Congress into PBMs’ business practices. In late May, executives from three major PBMs were asked to testify before the House Committee on Oversight and Accountability.

• Mark Cuban’s D2C pharmacy won’t beat most insured patients’ out of pocket drug prices, one study finds. Insured patients are often better off buying their generic prescriptions through their health insurance benefits than through Mark Cuban Cost Plus Drug Company, though those without insurance could find cost savings in over a quarter of their pharmacy fills, according to a study published Friday in JAMA Health Forum. Across a sample of nearly 844 million prescription pharmacy fills logged among 124 generic drugs in 2019, researchers found that nearly 100 million (11.8%) would have reduced out-of-pocket spending for patients if they had been acquired through the billionaire-backed manufacturer and distributor. Cost Plus Drugs’ direct-to-consumer pharmacy didn’t launch until 2022. To measure the company’s hypothetical savings for consumers at the individual level, researchers adjusted the per-drug out-of-pocket costs from their sample based on the Center for Medicare and Medicaid Services’ 2023 National Average Drug Acquisition Cost.

The recent New York Times article The Opaque Industry Secretly Inflating Prices for Prescription Drugs sheds light on a critical issue within the pharmacy benefit management (PBM) industry: the role of PBMs in driving up prescription drug costs instead of reducing them. As a fiduciary PBM and an advocate for transparency and education in pharmacy benefits, I feel compelled to offer my perspective on the article’s key takeaways and provide actionable solutions.

Key Takeaway 1: PBMs Often Increase Drug Costs

Opinion: The primary role of a PBM should be to manage prescription drug benefits in a way that lowers costs for patients and plan sponsors. However, the investigation highlights a stark reality: many PBMs are steering patients towards higher-priced drugs and imposing significant markups on otherwise affordable medications. This practice not only contradicts the intended purpose of PBMs but also places an undue financial burden on patients and employers.

Solution: To address this issue, PBMs must adopt a fiduciary model, which prioritizes the best interests of their clients over their own profits. TransparentRx, as a fiduciary PBM, eliminates conflicts of interest by disclosing all revenue sources and ensuring that any rebates or discounts are passed directly to the client. This approach not only reduces drug costs but also fosters trust and transparency between PBMs and their clients.

Key Takeaway 2: PBMs Acting in Their Own Financial Interests

Opinion: The article reveals that the largest PBMs often act in their own financial interests, extracting billions of dollars in hidden fees from drug companies. These fees contribute nothing to reducing healthcare costs and are detrimental to the overall system. Such practices highlight a fundamental misalignment between PBMs and their clients’ needs.

Solution: Employers should seek out fiduciary PBMs that are legally bound to act in their clients’ best interests. By partnering with a fiduciary PBM, employers can ensure that the PBM’s revenue model is transparent and aligned with the goal of reducing drug costs. Additionally, PBMs should be required to disclose any subsidiaries and the financial relationships they maintain to provide a clear picture of where the money is going.

Key Takeaway 3: Employers’ Lack of Understanding and Control

Opinion: The complexity of the pharmacy benefits system often leaves employers in the dark, unable to fully grasp or control the dynamics of their drug plans. Simply put, employers don’t know what they don’t know. This lack of understanding and oversight can lead to suboptimal decisions, adverse patient outcomes, and increased costs. Leading employers (i.e., Caterpillar) are hiring and training in-house experts to manage their pharmacy benefit programs, resulting in a significant return on investment (ROI).

Solution: Education is paramount. Employers need to be equipped with the knowledge to make informed decisions about their pharmacy benefits. Programs like the Certified Pharmacy Benefits Specialist (CPBS) certification can empower employers and their consultants with the expertise needed to navigate the intricacies of PBM contracts and practices. Additionally, employers must demand transparent and straightforward reporting from their PBM, enabling them to understand the impact of their choices and maintain control over their benefits programs.

Conclusion

The findings of the New York Times investigation The Opaque Industry Secretly Inflating Prices for Prescription Drugs underscores the urgent need for reform in the PBM industry. By adopting a fiduciary model, ensuring transparency, and prioritizing education, we can realign PBM practices with the best interests of patients and employers.

As we continue to advocate for these changes, we must remember that the goal is to create a system where healthcare costs are managed effectively and ethically, ensuring better outcomes for all stakeholders. For more insights and detailed strategies on managing pharmacy benefits, visit our blog at TransparentRx. Together, we can build a more transparent and cost-effective healthcare system.

The J&J lawsuit should be a wakeup call to the PBM industry — and to companies everywhere and other notes from around the interweb:

• The J&J lawsuit should be a wakeup call to the PBM industry — and to companies everywhere. The ongoing legal dispute involving Johnson & Johnson has again thrust the topic of pharmacy benefit managers (PBMs) into the spotlight. Ann Lewandowski, a J&J employee, sued the company for overpaying for its employees’ prescription drugs through its PBM, Express Scripts, claiming that these overpayments resulted in higher health insurance premiums and out-of-pocket drug costs for employees. This lawsuit is a significant entrant in the recent groundswell of efforts to shine light on the traditional PBM industry and its opaque pricing structures and outdated evaluation models. It follows on the heels of probes by government regulators and attention from Congress into PBMs’ business practices. In late May, executives from three major PBMs were asked to testify before the House Committee on Oversight and Accountability.

• Blue Cross Blue Shield of Michigan dropping coverage of weight loss drugs. Michigan’s largest insurance company said it will begin eliminating coverage of various weight loss drugs next year. In a statement to CBS News Detroit, the company said it is ending coverage of GLP-1 drugs “for large group fully insured members beginning January 1, 2025, or on a group’s 2025 health coverage renewal date.” Additionally, the company said it will change prior authorization requirements for Saxenda, Wegovy and Zepbound beginning Aug. 1. The company said the changes were made “after careful consideration of GLP-1 weight loss drugs’ efficacy, safety and access, and cost. “Blue Cross Blue Shield of Michigan is committed to providing our members with access to high-quality, affordable health care. We also have a responsibility, as stewards of our members’ and customers’ premiums, to ensure that the drugs we pay for benefit our members without adding excessive costs that impact all members and customer groups,” the health system said in a statement.

• Missouri is in the center of a national drug pricing battle — with billions on the line. The stakes nationally are huge, in a medical market with escalating prescription prices and increasing concentration of medical providers in direct employment by hospital groups. Nationally, pharmaceutical manufacturers sold nearly $100 billion in discounted drugs in 2021 and 2022 through a federal program known as 340B, for the section of law where it is authorized. With an average discount of about 60%, according to representatives of the drug manufacturers, the wholesale value of the discounted prescriptions over two years is approximately $250 billion. The retail markup adds hundreds of millions more to the total revenue stream.

• Sanofi and Bristol Myers on the hook for $916M. Hawaii has won more than $900 million in a years-old lawsuit over the blood-thinning drug Plavix, in the largest court award in the state’s history. It’s a victory over two of the country’s largest drug companies, who said they plan to appeal. Plavix was marketed as a drug that could help reduce serious cardiovascular events. But in 2014, a state court found Bristol-Myers and Sanofi sold Plavix in Hawaii for 12 years, even though they knew it did not work on many Asians and Pacific Islanders. Judge James Ashford ruled that Sanofi and BMS knew that there was a risk “that about 30% of patients might have a diminished response to Plavix, but they did not update their label. The defendants created an environment where Hawaii prescribing physicians practiced for more than a decade without the necessary information needed to evaluate the serious limitations of this heart medication,” Ashford added.

The Consolidated Appropriations Act (CAA) has ushered in a new era of transparency and accountability in the healthcare industry. For Chief Human Resources Officers (CHROs) and Chief Financial Officers (CFOs), navigating these regulations can be daunting. One aspect stands out as a beacon of compliance and trustworthiness: the ERISA fiduciary responsibility which sets CAA-Compliant PBMs apart.

ERISA (Employee Retirement Income Security Act) mandates that fiduciaries act solely in the interest of plan participants and beneficiaries. This means making decisions with the utmost care, skill, prudence, and diligence. For PBMs, embracing ERISA fiduciary responsibility signifies a commitment to transparency, fairness, and prioritizing the client’s best interests.

Why ERISA Fiduciary Responsibility Matters

Transparency in Pricing and Rebates: A pharmacy benefit manager (PBM) with ERISA fiduciary responsibility ensures transparent pricing models. This includes clear disclosure of all fees, rebates, and any potential conflicts of interest. CHROs and CFOs can rest assured that there are no hidden costs, leading to more predictable budgeting and financial planning.

Alignment with Client Interests: ERISA fiduciary duty requires PBMs to align their practices with the interests of their clients. This alignment reduces the likelihood of exploitative practices, such as spread pricing or rebate pumping, which can inflate costs without providing added value to the employer or plan members.

Improved Patient Outcomes: When PBMs operate under ERISA fiduciary standards, their focus shifts to improving patient outcomes. This means implementing strategies that enhance medication adherence, optimize therapeutic regimens, and ultimately lead to healthier employees. Healthier employees translate to reduced absenteeism and increased productivity, benefiting the organization as a whole.

The Hallmark of a CAA-Compliant PBM

1. Rigorous Compliance and Auditing: CAA-compliant PBMs adhere to rigorous compliance and auditing standards. This ensures that all processes, from claims processing to rebate management, are conducted with utmost integrity. For CHROs and CFOs, this translates to reduced risk of non-compliance penalties and improved trust in their PBM partner.

2. Enhanced Data Transparency: Data transparency is a cornerstone of CAA compliance. PBMs with ERISA fiduciary responsibility provide detailed reporting and analytics, offering insights into drug utilization, cost drivers, and areas for improvement. This empowers CHROs and CFOs to make informed decisions regarding their pharmacy benefit plans.

3. Ethical Business Practices: ERISA fiduciary responsibility enforces ethical business practices. This means that PBMs must act in the best interest of their clients, avoiding any form of self-dealing or profiteering. For organizations, this translates to a partnership based on trust, integrity, and mutual benefit.

Choosing the Right PBM Partner

Selecting a PBM with a proven track record of ERISA fiduciary responsibility is crucial for compliance and overall plan success. Look for PBMs with extensive experience in managing pharmacy benefits for large organizations. Ensure they offer transparent contracting with no hidden fees or ambiguous terms. Lastly, choose a PBM that is committed to improving patient outcomes through innovative strategies and personalized care programs.

Conclusion

In the evolving landscape of healthcare, the role of PBMs has never been more critical. For CHROs and CFOs, partnering with a CAA-compliant PBM that upholds ERISA fiduciary responsibility is the single hallmark of a successful pharmacy benefit plan. By prioritizing transparency, aligning with client interests, and focusing on improved patient outcomes, these PBMs not only comply with regulatory standards but also drive value for organizations and their employees.

Adopting a fiduciary model sets the stage for a healthier, more transparent, and cost-effective pharmacy benefit plan. As you evaluate your PBM options, remember that the single hallmark of compliance and trust lies in ERISA fiduciary responsibility. Choose wisely, and your organization will reap the benefits of a truly accountable and client-focused PBM partner.

Sanofi and Bristol Myers on the hook for $916M in do-over of Plavix marketing case and other notes from around the interweb:

• State Halts GLP-1 Weight Loss Drug Coverage for State Employees. Concerning that costs could reach more than $1 billion over the next 6 years, North Carolina opted to stop coverage for the pricey new GLP-1s, saying the contracts between the drugmakers and the PBMs “are all-or-nothing.” The 750,000 public employees enrolled in the plan now must pay out of pocket if they want to take Wegovy or similar drugs. North Carolina initially wanted to save money by limiting prescriptions to patients who first tried lifestyle management programs to lose weight. However, the manufacturer and the state’s pharmacy benefit manager, CVS Caremark, said the state would have to pay full list price for the drugs unless it agreed to allow all patients with a prescription to get them without any preliminary hurdles, in which case the state could receive rebates amounting to a 40% discount.

• Audit of the American Postal Worker’s Union Health Plan’s Pharmacy Operations. “We found that the PBM overcharged the Carrier and the FEHBP $44,882,688 (including lost investment income) by not passing through all discounts and credit related to prescription drug pricing that were required under the PBM Transparency Standards found in the Carrier’s contract with the OPM. Specifically, our audit identified the following six findings that require corrective action. The findings occurred across all years of the auto scope unless otherwise noted.”

• Amazon is expanding its pharmacy footprint. Amazon’s pharmacy business may be coming into its own as it expands its physical presence and eyes increased revenue from the new class of weight loss drugs. After struggling to find its foothold in the U.S. healthcare market since its launch in 2020, in March Amazon announced a partnership with Eli Lilly to deliver its weight-loss drug Zepbound to consumers and expanded its same-day pharmacy delivery service to New York City and greater Los Angeles. Amazon Pharmacy vice-president John Love told the Financial Times at the time that Zepbound and its rivals are expected to generate “a lot of revenue.” To help support those expanded delivery services, on May 29 Amazon Pharmacy opened its first physical location in California, according to the Los Angeles Press-Telegram. It’s not a normal walk-in store, however. The pharmacy sits next to an Amazon fulfillment center in Corona, California, behind two locked doors, and is meant to facilitate same day deliveries. It’s one of twelve locations nationwide, located in eight states, including New York, Indiana, Texas, and Florida.

• Sanofi and Bristol Myers on the hook for $916M. Hawaii has won more than $900 million in a years-old lawsuit over the blood-thinning drug Plavix, in the largest court award in the state’s history. It’s a victory over two of the country’s largest drug companies, who said they plan to appeal. Plavix was marketed as a drug that could help reduce serious cardiovascular events. But in 2014, a state court found Bristol-Myers and Sanofi sold Plavix in Hawaii for 12 years, even though they knew it did not work on many Asians and Pacific Islanders. Judge James Ashford ruled that Sanofi and BMS knew that there was a risk “that about 30% of patients might have a diminished response to Plavix, but they did not update their label. The defendants created an environment where Hawaii prescribing physicians practiced for more than a decade without the necessary information needed to evaluate the serious limitations of this heart medication,” Ashford added.

In the ever-evolving landscape of pharmacy benefit management, few developments have stirred as much excitement—and anxiety—as the introduction of triple agonist GLP-1 Retatrutide. With the potential to revolutionize treatments for diabetes and obesity, this novel drug is making waves. But what exactly is an agonist, and why is Retatrutide causing such a stir?

Understanding Agonists

First, let’s break down what an agonist is. In pharmacology, an agonist is a substance that binds to a specific receptor on a cell and triggers a response, mimicking the action of a naturally occurring substance. Think of it like a key fitting into a lock and turning it. When the key (agonist) binds to the lock (receptor), it opens the door (activates the receptor) to produce a specific effect.

Zepbound, Mounjaro, Wegovy, and Ozempic all function by reducing appetite, but there are key differences in their mechanism of action. Zepbound and Mounjaro are known as “dual-agonist” drugs, while Wegovy and Ozempic are “single-agonist” drugs. These medications activate essential hormone pathways in the body to achieve their effects.

What Makes Retatrutide Special?

Retatrutide stands out because it is a triple agonist. This means it simultaneously activates three different types of receptors:

1. GLP-1 Receptor (Glucagon-Like Peptide-1)
2. GIP Receptor (Glucose-Dependent Insulinotropic Polypeptide)
3. Glucagon Receptor

By targeting these three receptors, Retatrutide offers a multifaceted approach to managing blood glucose levels, enhancing insulin secretion, and potentially promoting weight loss. This multi-receptor activation could provide superior efficacy compared to current single or dual agonist therapies. Enrollees in the clinical trial receiving Retatrutide also experienced improvements in blood pressure and lipid profile.

Here are the detailed results from the Retatrutide study:

Key Observations

• Change in Body Weight: The graphs above illustrate the mean percentage change in body weight at 24 and 48 weeks across different dosage groups, highlighting the significant impact of Retatrutide on weight reduction compared to placebo.
• Weight Reduction Percentages: The bar chart shows the percentage of participants achieving weight reductions of 5%, 10%, and 15% or more at 48 weeks.

The Promise of Retatrutide

• Improved Glycemic Control: By activating the GLP-1 and GIP receptors, Retatrutide can significantly enhance insulin secretion in response to meals, leading to better blood sugar control.
• Weight Management: The activation of these receptors also influences appetite regulation and energy expenditure, potentially aiding in substantial weight loss for individuals with obesity.
• Cardiovascular Benefits: Preliminary studies suggest that Retatrutide may offer cardiovascular benefits, reducing risks associated with diabetes and obesity.

Why Worry?

Despite the promising benefits, the introduction of Retatrutide is not without concerns:

• Side Effects: As with any new medication, there are potential side effects. These could range from gastrointestinal issues to more serious concerns that have yet to be fully understood.
• Long-term Safety: The long-term effects of triple receptor activation are still under investigation. It’s crucial to ensure that the benefits outweigh the risks over extended use.
• Cost and Accessibility: New drugs often come with high price tags, and access can be limited by insurance coverage and healthcare policies. Ensuring that those who need Retatrutide can afford it will be a significant challenge.

Conclusion

As a new pharmaceutical sales rep at Eli Lilly, I toured the manufacturing facility for Cialis. The experience was astounding; advanced robotics handled every step of production, from mixing raw ingredients to pressing and packaging tablets, all without human interaction. Hundreds of tablets were manufactured every minute, a testament to the incredible advancements in pharmaceutical manufacturing technology.

Fast forward to today, and I see the same excitement and potential in the pending launch of Retatrutide. Just as those robotics revolutionized Cialis production, Retatrutide promises to revolutionize the treatment of diabetes and obesity with its triple-agonist approach. However, the cost implications cannot be ignored.

Self-funded employers, already navigating the complexities of healthcare costs, now face the challenge of incorporating this expensive but potentially life-changing medication into their plans. While the potential health benefits of Retatrutide are immense, it is crucial to balance these benefits with the financial realities.

Employers must consider strategies to manage these costs effectively, ensuring that they can provide the best care for their employees without compromising their financial stability. My best advice to you is pick the right pharmacy benefit manager.