In a panel during the National Policy and Advocacy Summit on Biologics and Biosimilars, held in Washington, DC, on April 17, rheumatologist Madelaine Feldman, MD; Wayne Winegarden, PhD, of the Pacific Research Institute; and rheumatologist Angus Worthing, MD, chair of the American College of Rheumatology’s Government Affairs Committee, discussed trends in healthcare payment models.
In a panel during the National Policy and Advocacy Summit on Biologics and Biosimilars, held in Washington, DC, on April 17, rheumatologist Madelaine Feldman, MD; Wayne Winegarden, PhD, of the Pacific Research Institute; and rheumatologist Angus Worthing, MD, chair of the American College of Rheumatology (ACR)’s Government Affairs Committee, discussed trends in healthcare payment models.
The 340B Drug Pricing Program
The session, moderated by Amanda Conschafter, communications director of the Alliance for Patient Access, kicked off with a discussion of the 340B Drug Pricing Program, which was created to improve access to medication for underserved patients. In the program, manufacturers are required to sell separately payable, non—pass-through products, like biosimilars, to participating hospitals at a discount. Hospitals qualify for these discounts if they serve high proportions of low-income patients.
However, according to Winegarden, low-income patients aren’t necessarily getting the benefits intended by the program, because the cost savings from these discounted medicines go to hospitals: “It doesn’t matter if an individual patient is uninsured or of low income. All that matters is if you qualify as a disproportionate share hospital. Now, the program has gone to cover one-third of all hospitals. The idea is you can make a lot of money for the hospital if have 340B qualification, you buy the drug cheaper, but then you have an insured patient who purchases the drug, therefore you’re getting the full price on the drug.”
According to Winegarden, the program needs to be retooled to better serve low-income patients rather than institutions. “We just need the program to get working so that it actually benefits those individuals.”
Of particular concern to Worthing and the ACR are waivers that would allow individual states to restrict the level of care provided to patients under Medicaid. In the case of Massachusetts, said Worthing, “What was proposed and accepted is that Medicaid formularies would be closed down and restricted to allow for more drug competition, so if there’s multiple drugs in one drug class, that the formulary could be written for just one drug to be available for Medicaid patients in Massachusetts, and it would probably be the cheapest or least expensive drug.”
The waiver could have the potential benefit of ensuring that, in classes of drugs with only one available medication, the drug would likely have to remain on the formulary regardless of how expensive it is.
“Everything else I think would pretty much be bad news for the patients,” he said, especially for patients who are currently stable on biologic drugs. If a patient’s therapy isn’t the product that remains on the formulary, they could lose access to their treatment. “In our case with rheumatoid arthritis, or psoriatic arthritis and autoimmune diseases in the joints, that person’s at risk for flaring if they stop their medication.”
Medicare Part B
Also of concern for Worthing is a proposal to move medications currently provided by the Medicare Part B program into coverage through the Part D program. Worthing says that such a change could cause delays in patient access to drugs because of Part D utilization management; patients may be required to undergo step therapy and obtain prior authorization. “These things generally mean that there’s a delay of a couple of weeks, or a month, on average, for people getting their drug. So, there’s a delay that we’re talking about adding in to Part B that isn’t there right now,” said Worthing.
Furthermore, patients could incur greater out-of-pocket costs, because the Part B system allows Medicare beneficiaries to acquire secondary insurance to help pay for their share of costs. “Part D doesn’t have that, and there’s a coverage gap. So, not only are these drugs potentially going to be delayed, but they’ll also be more expensive.”
Feldman agreed, saying that, “Part of the reason we have so many patients taking biologics through Part B is because they cannot afford it in Part D. So, this would be really and news to switch these patients form Part B to Part D, and some of these utilization management tools [exist] because there are pharmacy benefit managers [PBMs] involved in Part D.”
Pharmacy Benefit Managers
Feldman took PBMs to task for rebating practices that have effectively kept cost-saving biosimilars from competing in the marketplace.
“When I testified before the FDA on one of the biosimilars,” said Feldman, “I said we can fast track the biosimilars all we want. We can get them out there and get them approved, but not one person in this country will take it, unless it’s covered under their insurance. As cheaply as we can make them and distribute them, no one is going to take it.” In a marketplace where PBMs structure formularies around the highest rebates, she said, the system incentivizes high list prices for drugs.
Winegarden agreed, saying that, “No one has an incentive to have a lower price, and then we wonder why we have higher prices,” and that’s bad news for patients. “Even though the system is finding some sort of efficiency, patients when they go to the drug counter are footing that bill,” he said.