News

"Oklahoma's insurance department asked the U.S. Supreme Court to review the Tenth Circuit's decision in PCMA v. Mulready  ... which held that parts of an Oklahoma law regulating pharmacy benefit managers (PBMs) were preempted by ERISA and by Medicare Part D. In its petition, the state says that Mulready 'is irreconcilable with [the Supreme Court's] unanimous decision in Rutledge ,' and that Mulready also created a 'textbook' circuit split with the Eighth Circuit." [ PCMA v. Mulready , No. 22-6074 (10th Cir. Aug. 15, 2023; cert pet. filed May 10, 2024, No. 23-1213 )]

"[GAO] published a report examining the regulation of pharmacy benefit managers (PBMs) in five states.... [HRSA] issued a final rule for the 340B Program's administrative dispute resolution process.... Senate Finance Committee Chairman Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) released a quite ambitious draft legislative proposal to address prescription drug shortages.... [CMS] issued new draft guidance for the second cycle of negotiations for the Medicare Drug Price Negotiation Program established by the Inflation Reduction Act of 2022."

"Given the additional difficulty of satisfying the creditable coverage requirements, the simplified method will be an important tool for employer plans in 2025.... The simplified method provides two potential paths for determining creditable coverage ... [It] is likely less expensive than an actuarial determination, however this does not mean it is actually simple."

10 pages. "This paper summarizes the key provisions of the MDP final guidance and other subsequent guidance, including a summary of programmatic differences and similarities to the previous Coverage Gap Discount Program (CGDP), an analysis of the impact of a phase-in of manufacturer discounts, and its potential implications to various stakeholders."

"With a new Complaint to be filed, in some sense, the case is starting all over again. But, there is some learning from the Defendants' letter and their Memorandum on dismissal that are worth a review, and that Plaintiff is no doubt taking into account for purposes of a First Amended Complaint." [Lewandowski v. Johnson & Johnson, No. 24-0671 (D.N.J. complaint filed Feb. 5, 2024)]

"The third RxDC report is due June 1, 2024; instructions may cause plan sponsors to reconsider whether they need to make 'plan level' submissions instead of relying on their vendors to make 'aggregate' submissions on their behalf.... Considering the spotlight recently shed on fiduciary duties and the risks associated with not complying with those duties, the additional insight plan-level filings provide can help fiduciaries stay on course in fulfilling their responsibilities."

"What mandatory data are manufacturers required to submit?  ... What data are manufacturers optionally allowed to submit?  ... Is CMS allowed to consider cost effectiveness studies? ... Can you provide more detail on the specific data elements manufacturers need to submit?"

"[O]ne in eight adults (12%) say they have ever taken a GLP-1 agonist ... including 6% who say they are currently taking such a drug.... Most adults who have taken GLP-1 drugs say they took them to treat a chronic condition including diabetes or heart disease (62%), while about four in ten say they took them primarily to lose weight. About half (54%) of all adults who have taken GLP-1 drugs say it was difficult to afford the cost ... [E]ven among insured adults about half (53%) say the cost was difficult to afford."

"Given employer preferences for contracting flexibility and the importance of gainsharing contracts in reducing prescription drug spending, legislative proposals aimed at banning either spread pricing in the commercial market or variable rebate contracts restrict PBMs' ability to work with employers to design the plan that is right for their employees. With increased pricing transparency to plan sponsors, employers will be well-positioned to negotiate contract terms and select models that reduce prescription drug spending."

"[E]xposing PBMs' opaque business practices and imposing regulatory constraints will remain a top priority for regulators.... Even before a statutory or regulatory elimination of spread pricing, health plans should begin to consider now how this change could impact current and future PBM contracts ... [It] may be worthwhile to consider now the various channels for PBM profit available under your PBM contract, and whether you can begin to limit/narrow (or consider limiting/narrowing) those avenues for PBM remuneration that exceed the scope of 'bona fide service fees.' "

"In combination with the Inflation Reduction Act's introduction of Medicare drug price negotiations, the Biden administration's reform of Medicare Advantage ads introduced precedent for monitoring direct-to-consumer advertising (DTCA). Yet, there is still room for reform, regulation, and improvement.... DTCA explicitly increases consumption of pharmaceutical products and, perhaps more insidiously, implicitly influences Americans' perception of drug efficacy.... Patient and consumer protection is desperately needed."

"A U.S. judge on Monday rejected a challenge by Bristol Myers Squibb and Johnson & Johnson to a law requiring them to negotiate the prices of their blockbuster blood clot prevention drugs with the ... Medicare health insurance program or pay heavy penalties. U.S. District Judge Zahid Quraishi in Trenton, New Jersey, became the fourth federal judge to uphold the program ... against drug industry challenges, rejecting their argument that it was an illegal taking of their property." [ Bristol Myers Squibb Co. v. Becerra, and Janssen Pharmaceuticals, Inc. v. Becerra , Nos. 23-3335 and 23-3818 (D.N.J. Apr. 29, 2024)]

"CMS is tasked with evaluating whether the evidence generated over a relatively long product lifecycle justifies the already-set price or if further discounting is warranted. This raises many questions.... [The authors propose a framework which] attempts to address each of these challenges while remaining true to the spirit of what [health technology assessments (HTA)] should accomplish -- credible, evidence-based decision making in the interest of population health and health-system sustainability."

"With about a quarter of healthcare benefits costs attributed to pharmacy benefits, it's not surprising that 92% of survey respondents said they're concerned about high-cost drugs in the pipeline, and 91% are concerned about the pharmacy cost trend overall.... What is a PBM? ... How do PBMs work? ... Who should consider a PBM? ... What are the advantages of a PBM?"

"Given the upcoming deadline and the heightened litigation risk associated with pharmacy benefit managers (PBMs).... [this post] provides action steps for group health plans to consider. RxDC reporting is no small task, and plan sponsors would be well advised to craft an approach specific to their needs and capabilities to mitigate compliance and litigation risks."

"[Q]ualified high deductible health plans (HDHPs) and some drug plans will have difficulty demonstrating that the prescription drug benefit they offer will provide at least as good a benefit as the newly improved Medicare Part D prescription drug benefit.... Early and clear communication will aide ... the working aged, who may believe they can enroll in Medicare when they stop working in 2026 (and later) but find out they are subject to late enrollment penalties because their employer plan was not creditable in 2025."

13 pages. "While most state legislatures stayed busy in the first quarter of 2024, comparatively few leave- and insurance-related bills became law. Instead, much of that activity took place on the regulatory front."

"Starting In 2025, Part D begins to function more like traditional non-Medicare coverage, with a true OOPM of $2,000. This and other benefit improvements under Part D means that employers who cannot use the simplified method will be held to a heightened threshold for determining creditability. Some employer sponsored plans that are creditable in 2024 under an actuarial determination will likely not be creditable in 2025. Employers who wish to keep creditable coverage in 2025 may need to make certain plan design changes to improve the actuarial value of the plan's prescription drug benefits."

"Companies that rushed to cover employees weight loss drugs are cutting back their allowances or withdrawing funding entirely. Some companies, such as the Mayo Clinic, are implementing a $20,000 cap on spending per employee. The changes have left some overweight employees using their retirement savings to maintain access to drugs such as Ozempic."

"PBMs have just not been in the plan document business. This is a huge gap in the industry that is potentially exposed by this lawsuit.... Questions arise from the lawsuit that compel consideration of the ERISA fiduciary roles and responsibilities. How is the selection of a PBM an ERISA fiduciary function? Are all acts by the J&J Committee and its members subject to the ERISA fiduciary standards? Are actions by the PBM subject to the ERISA fiduciary rules?" [Lewandowski v. Johnson & Johnson, No. 24-0671 (D.N.J. complaint filed Feb. 5, 2024)]

"The FDA is prioritizing listening to patients by approving treatments quickly -- and in spite of the insurer backlash against accelerated approvals.... The major issue for insurers is cost. Insurers resent that drug companies can charge full price for a treatment that may or may not work.... Instead of refusing to cover a new drug, CMS and other insurers could condition the price they pay for a certain drug on its ability to achieve specific outcomes, including outcomes that are important to patients."

"[T]he departments ... intend to propose rulemaking that would align the standards that apply to large and self-insured group health plans with those that apply to individual and small group market plans ... If all prescription drugs covered by a plan are eventually considered EHBs, then a large or self-insured group health plan could not impose annual or lifetime dollar limits on those drugs. This could be an issue for certain high-cost drugs ... [and] if there would no longer be a way to define a covered drug as a 'non-EHB,' then some copay accumulator or maximizer programs may no longer be available for employers to use."

12 pages. "Consumers and employers will pay on average $50 more for single coverage and $175 more for family coverage in premiums in 2024 due to the markups charged by providers to supply specialty drugs that could have been supplied by a specialty pharmacy. The total value of health insurance premiums and premium equivalents that could have been saved if providers charged the same price for specialty drugs as those available from specialty pharmacies would be as much as $13.1 billion in 2024."

"[T]he Final Instructions  ... kept the simplified methodology, without modification, as an alternative to the actuarial value test for 2025 for plans not seeking the RDS.... [E]mployers need to be prepared for modifications or a completely new 'simplified' method for 2026 and beyond.... Plan sponsors, particularly calendar year plans, should begin analysis ... to see what, if any, changes need to occur for their 2025 prescription drug plans."

"The final guidance provides some relief for plan sponsors with active plans and helpful clarification for those who take advantage of the [Retiree Drug Subsidy (RDS)] program.... Plans that test for creditable coverage for active employees will be able to continue to use the current testing methodology for 2025, which means it is less likely that plans would be found to not be creditable coverage."