Insurers, PBMs Take Varied Approaches to Addressing Specialty Drug Copay Coupons

Reprinted from DRUG BENEFIT NEWS, biweekly news and proven cost management strategies for health plans, PBMs, pharma companies and employers. By Angela Maas, Managing Editor October 25, 2013Volume 14Issue 20 Many health plans and PBMs agree that copay coupons offered by makers of traditional brand-name drugs thwart formulary compliance, and have attempted to combat their use through tactics such as enlarging copay differentials and applying utilization management. But when it comes to coupons and discount programs associated with high-cost specialty drugs, payers are taking a more selective approach, as these programs may improve medication compliance by offsetting a patient’s financial responsibility. UnitedHealth Group’s UnitedHealthcare unit, for one, has launched a widely publicized initiative limiting the coupons, while PBMs like Prime Therapeutics LLC and MedImpact Healthcare Systems, Inc. subsidiary ScriptSave suggest there are ways to embrace them. Whereas the issue around traditional coupons is “rather simple,” addressing specialty drug coupons is “very nuanced,” observes Pat Gleason, director of health outcomes at Prime Therapeutics LLC. “With the small molecule drugs…we feel that coupons simply circumvent the formulary, leading to the use of more branded products when there are equally effective, safe generics that are very inexpensive, and just add cost to the system,” he tells DBN. But the specialty realm presents medication compliance and therapy abandonment concerns that are closely tied to cost share, which is often higher for specialty drugs, even preferred agents, he says. “I understand the philosophy of ‘there’s more skin in the game’ [with higher cost share]. But then you’ve got the corollary issue of, as you get above $150 a month, people may choose to abandon therapy and that’s not what we want,” says Gleason. “We want to help people get the medicine they need to feel better and live well.” As a result, Prime currently allows the use of coupons and patient assistance programs (PAPs) for both preferred and nonpreferred specialty agents, and recently quantified members’ cost savings associated with those discount programs with new research presented at the Academy of Managed Care Pharmacy’s (AMCP) Nexus 2013 conference held Oct. 15-18 in San Antonio. To determine the impact of discount programs, Prime looked at prescriptions filled between January and June 2013 for 17 different specialty drug categories by its own Prime Therapeutics Specialty Pharmacy. That entity created a file for each prescription that contained detailed information on the pharmaceutical manufacturer coupon or PAP amount reimbursed to offset share. The file was then linked back to the PBM claim records to identify pharmacy only claims that were final paid claims. Of the nearly $418 million spent on drugs during the study period, Prime determined that members were responsible for 5.2% — or close to $22 million — of total costs. Coupons and/or PAPs were associated with 47,924 (38.2%) of 125,303 prescriptions and totaled more than $10.6 million (48.6%) of the member share offset. In other words, coupons and PAPs were applied to four out of 10 prescriptions going through the Prime Therapeutics Specialty Pharmacy. Moreover, the cost share for 40% of claims prior to the use of coupons/PAPs was $50 or less, whereas with the coupons, individuals’ cost share dropped below $50 fully 95.6% of the time. “That’s a pretty dramatic shift,” says Gleason. The autoimmune category had the most specialty pharmacy prescriptions and accounted for $153.6 million total paid; the members’ share was $10.5 million (6.8%), of which nearly $8 million (73.4%) was offset by coupons/PAPs. Gleason adds that while the study included PAPs, about 90% of the discounts applied were from coupons. The difference between the two, he explains, is that coupons are directly administered by the pharmaceutical manufacturer, while PAPs are usually administered by a nonprofit third party, sometimes sponsored by a manufacturer but not always, and typically require that the patient have an income below a certain level. Prime Optimizes Use of Specialty Coupons In conducting the study, the PBM was “just trying to get an understanding of what’s happening with specialty coupons in order to build better benefit designs,” explains Gleason. As of now, the PBM is “optimizing” all coupons, applying them to both preferred and nonpreferred formulary agents. “We’re reaching out to the members to encourage them to use the preferred specialty products, but we’re not blocking coupons for the nonpreferred specialty products,” Gleason tells DBN. Also presenting at the AMCP conference was UnitedHealth Group’s UnitedHealthcare unit, which this year began disallowing coupons for six drugs going through its network specialty pharmacies (DBN 12/7/12, p. 1). Effective Jan. 1, the insurer’s network specialty pharmacies stopped accepting coupon cards when a member calls to fill a prescription for one of six drugs: Extavia (interferon beta-1b) and Gilenya (fingolimod) for multiple sclerosis, CellCept (mycophenolate mofetil) for patients receiving transplants, Humira (adalimumab) for rheumatoid arthritis, and Victrelis (boceprevir) and Peg-Intron (peginterferon alfa-2b) for hepatitis C. The action does not impact needs-based assistance programs. Speaking at AMCP and at the Magellan Pharmacy Solutions 10th Annual Oncology Summit held Sept. 19 in Baltimore, Vice President of Pharmacy Management Strategies Lida Etemad, Pharm.D., said the key to a successful implementation was a “high-touch member support campaign” that included letters sent to members 45 days before the new program took effect. If members called the specialty pharmacy to refill one of the included drugs, they were rerouted to a call center, where staffers explained the program. United also gave members the opportunity to have specialty pharmacies reach out to physician offices. An early program analysis revealed the following: • The largest member base was for people taking Humira and CellCept. • “Just under 3,000 members had contact with the specialty pharmacies,” said Etemad. • During contact with the specialty pharmacies, 21% of those members “indicated they would like the specialty pharmacies to do outreach to the physician’s office, while 79% declined outreach.” • Of those turning down the outreach offer, 3% said it was because they had “prior use of a lower-cost alternative,” but the majority said it was because “cost was not a concern.” • One-third of members who authorized outreach and 23% who spoke with their physician on their own switched to a lower-cost alternative. • Overall, said Etemad, “43% of members had an interest in a lower-cost alternative.” Perhaps not surprisingly, “as members’ total pharmacy costs went up, so did the switch rate,” explained Etemad. If members were taking “five or more medications, they were more likely to switch.” Likewise, “the cost share that the member would now face” also had a big impact. For those with a copay of $50 to $60, the switch rate was “just over 10%,” but for those with 25% coinsurance, the switch rate was more than 40%. United will add 25 specialty drugs to the program on Jan. 1, according to Etemad. Therapeutic categories include growth hormone, which will see Genotropin (somatropin [rDNA origin]) added to the list, as well as hepatitis B, hepatitis C, infertility and others. “Regarding other products, we do allow for the adjudication of coupons for products that are lower cost alternatives to the products included in the program,” Etemad clarifies in an email to DBN. While the Prime study concluded that specialty pharmacies should consider optimizing the use of coupons and PAPs in an effort to improve drug adherence, that doesn’t mean Prime won’t consider blocking the use of certain specialty drug coupons in the future. “I think [the United effort] is very interesting. We learned from that program and may very well be doing something similar in the near future,” says Gleason. “But at this point in time, we’re optimizing all coupons.” Plans, Pharma Could Align to Offer Cards Meanwhile, another PBM executive suggests that health plans take a targeted approach when it comes to allowing or disallowing the use of coupons. “I think the knee-jerk response and managed care plans’ frustration is, ‘Oh, you’re screwing up my formulary.’ But I think those cards can be used in a more directed and strategic fashion than today’s shotgun scatter approach,” says Marcus Sredzinski, Pharm.D., executive vice president of pharmacy with the “consumer-focused” PBM ScriptSave, now a wholly owned subsidiary of MedImpact Healthcare Systems, Inc. Sredzinski says he believes there are yet unexplored ways for pharmaceutical manufacturers and plans to work together to “reward” members with discount cards. For example, for specialty conditions like hepatitis C or multiple sclerosis, a plan could “work with the pharmaceutical company [offering] the copay card — maybe even [on] a preferred product in the class — get a patient on board with the product, waive the first copay with the copay card and then track the patient through time,” Sredzinski tells DBN. “So to incent compliance we’ll say, ‘We’ll reduce the cost of the drug at the point of sale through a copay card, so if you pick up the drug on time or you hit a certain biomarker, you get rewarded through a copay waiver or a buy-down in your copay.’” Sredzinski adds that something similar could be done with diabetes patients who show improved A1C levels over time. “I don’t think the marketplace has looked at copay cards in that fashion and it’s something I would like to do,” he says. “Could it upset the formulary balance? Sure, but why not align yourself with [the cards] and work in a different fashion? I think the pharmaceutical companies obviously have the money; in their copay cards they’ve underwritten net value in their marketing budget.” http://aishealth.com/archive/ndbn102513-02?utm_source=Real%20Magnet&utm_medium=Email&utm_campaign=27658171

Today's Datapoint

52% … of Medicare Advantage enrollees are in plans earning four stars or more in 2014, up from 38% in 2013, according to CMS.

Quote of the Day

“By the end of November, HealthCare.gov will work smoothly for the vast majority of users….The HealthCare.gov site is fixable. It will take a lot of work. A lot of problems need to be addressed. But let me be clear: HealthCare.gov is fixable.” — Jeffrey D. Zients, President Obama’s troubleshooter on the project to fix HealthCare.gov, told The New York Times for an article on Oct. 26.

Senior's Misconceptions About Medicare and Exchanges

According to a national survey from Express Scripts, of those age 65 and older, one-in-five seniors mistakenly thinks they can enroll in a medical and prescription drug plan through a health insurance exchange, even though the eligibility age ends at 65. Another 17 percent believe health exchanges could replace their Medicare plan altogether. Eighty-six percent of survey respondents reported confusion about how healthcare reform will affect their Medicare prescription drug coverage. Among the notable misconceptions: -Nearly one-third of seniors (29 percent) believe the ACA raises the Medicare eligibility age, with 68 being the average age cited; -52 percent falsely believe they're paying more for their prescription drugs in the Coverage Gap under healthcare reform; and -65 percent do not know that Medicare enrollment begins in October. Source: Express Scripts

Employer Healthcare Coverage and Healthcare Costs

Based on early responses from a survey conducted annually by Mercer, employers expect health benefit cost per employee will rise by 4.8% on average in 2014. Cost growth slowed to 4.1% in 2012, a 15-year low. The projected increase for 2014, while still relatively low, represents a slight uptick in the rate of growth. Some employers will minimize the number of newly eligible employees by cutting back on hours for at least a portion of their workforce - 11% of all large employers say they will do so. Few large employers - just 5% - say it's likely they will terminate their health plans within the next five years, even though public insurance exchanges will provide another source of health coverage. About a fifth of employers with fewer than 200 employees say it's likely they will terminate their plans; employers of this size are much less likely to offer coverage to begin with. Source: Mercer

3.3 Million Expected to Spend $7,202 in Out-of-Pocket Medical Costs in 2016 Under the ACA

According to a RAND Corporation study, Out-of-pocket medical expenses will decline for most consumers who become newly insured or change their source of health insurance under the federal Affordable Care Act. The largest reduction in out-of-pocket spending will be for the 11.5 million consumers who become newly insured under an expanded Medicaid program, with the analysis predicting their annual out-of-pocket medical costs will fall from $1,463 to $34. The largest increase in overall health costs is expected to be among people who become newly insured on the individual market and have incomes more than four times the federal poverty level. An estimated 3.3 million consumers are expected to spend $7,202 in 2016 under the Affordable Care Act, compared to $5,368 if the law was not in place. Some low-income people in states that do not expand Medicaid could see higher health spending compared what would happen if Medicaid was expanded. For example, a Texas resident with an income below the federal poverty level who does not qualify for Medicaid will face costs of $1,831 per year, compared to $28 if they were covered by Medicaid. Nationally, the 11.5 million people who become newly insured by Medicaid will see their risk of spending at least 10 percent of their income on medical costs drop from 45 percent to 5 percent. Source: RAND Corporation http://www.rand.org/news/press/2013/10/01.html

Savings Needed for Medigap Premiums, Medicare Part B Premiums, Medicare Part D Premiums and Out-of-Pocket Drug Expenses for Retirement at Age 65 in 2011-2013

By Percent Chance of Having Enough Savings with Median Prescription Drug Expenses Throughout Retirement Men 2011 2012 2013 50% $71,000 $70,00 $65,000 75% 107,000 105,000 96,000 90% 136,000 135,000 122,000 Women 50% 95,000 93,000 86,000 75% 124,000 122,000 111,000 90% 156,000 154,000 139,000 Married Couple 50% 166,000 163,000 151,000 75% 231,000 227,000 207,000 90% 287,000 283,000 255,000 Source: Employee Benefit Research Institute