News & Events

By now you may have seen FDA’s Federal Register Notice,  “Prescription Drug-Use-Related Software”, which establishes a docket seeking public input on digital therapeutics.  The proposed framework is for discussion purposes only; it is not a draft guidance but a way for FDA to seek input from stakeholders.  The document gives insight into how FDA may approach digital therapeutics, specifically the regulation of the software’s output.  The comment period for this proposed framework document closes on January 22, 2019.[1]

PHSI’s blog has previously discussed how countless new digital therapeutic technologies are being developed.  Stakeholders including prescribers, pharmacists, payers, and patients will be impacted by labeling and compendia listings for these products and the myriad of others with drug-use-related software in development.

One of the key components of the FDA’s proposed framework is the following:

“Software that is part of a system comprising a device constituent part or is itself a device constituent part of a prescription drug-led, drug-device combination product, and such software provides a function or information that is essential to one or more intended uses of the drug-led, drug-device combination product.  In that case, if such software meets the device definition, the software would be considered part of the device that is a constituent part of the combination product and would be regulated as such.”

PHSI’s interpretation of the framework is that drug labeling regulations (i.e. the labeling requirements of the Federal Food, Drug, and Cosmetic Act) will apply to the output of the software “disseminated by or on behalf of a drug sponsor for use with one or more of the drug sponsor’s prescription drugs” because it accompanies a specific drug.

Software not accompanying a specific drug would not be regulated as labeling, “unless its categorization changes.”  If a drug sponsor licenses software that was originally disseminated by an outside company and then disseminates that software for use in conjunction with a specific drug, it would not be regulated as labeling.

The two labeling types delineated are as follows:

• FDA-required labeling
  • Drafted by the manufacturer
  • Reviewed and approved by FDA (part of NDA, ANDA, or BLA) initially and when most changes to the labeling are proposed
  • Includes information that is “essential for a provider to make an informed decision about the risks and benefits of prescribing the drug for a patient and the information needed to safely and effectively use the drug”
• Promotional labeling
  • “Disseminated by or on behalf of a drug’s manufacturer, packer, or distributor”
  • Not approved by FDA in advance of dissemination – submitted to FDA at time of initial dissemination or publication
  • Can be submitted to a voluntary advisory comment process prior to dissemination if the sponsor chooses*
  • Generally devised for promotion of the product
  • May have other functions in addition to promotion
  • May include printed, audio, or visual matter descriptive of a drug

* The proposed framework specifies that, “for certain prescription drug use-related software output, the Agency will recommend under the proposed framework that a sponsor use the voluntary advisory comment process prior to dissemination.”

While the output of the prescription drug-use related software is the focus of the proposed framework, it notes that the software itself is the “responsibility of the drug sponsor to ensure the reliability” of the software.  FDA points out that the function of the software could impact the output, which is considered promotional labeling.

The compendia companies publish information provided by manufacturers as well as FDA when adding a new product to their databases.  Information gleaned from the FDA-required labeling is an important component of their processes.  Each compendium may approach digital therapeutics differently.  The proposed framework document in the Federal Register specifically mentions Abilify MyCite®.  PHSI expects that other examples may include inhalers, such as the newly approved ProAir Digihaler, and injection devices that contain sensors, modules, and/or apps.  Using Abilify MyCite as an example, one compendium appears to differentiate the listing from products with the same active ingredient by using the dosage form field.  The FDA approved dosage form for the product is “tablet with sensor.”  Another compendium identified the difference in the product name field only while keeping the same dosage form as existing Abilify tablets.  These differences could impact reimbursement of the product at the pharmacy.

Another digital therapeutics example is Sandoz and Pear Therapeutics jointly-developed app called “ReSET-O” that is cleared by the FDA via a 510(k) and is categorized as a Class II device.  “ReSET” was listed in the Elsevier Gold Standard compendium earlier in 2018 and is now listed in the Red Book as deactivated; as of this writing, it has not been listed in Medi-Span’s PriceRx, First Databank/Analysource, or Cerner Multum.

As additional products that combine a drug and prescription drug-use-related software are introduced, the strategies used to identify the products will continue to evolve.  Compendia, manufacturers, and healthcare professionals will want to be familiar with the FDA’s proposed framework and the potential implications for all stakeholders.  Current listings should be reviewed for potential negative impact on digital therapeutics reimbursement to prevent pull through issues during the launch process.  PHSI can assist manufacturers with this review and strategic planning to prevent launch challenges.

Additional Resources

• If you would like to submit comments to FDA regarding the proposed framework, more information on how to do so is available in the Federal Register notice: https://www.federalregister.gov/documents/2018/11/20/2018-25206/prescription-drug-use-related-software-establishment-of-a-public-docket-request-for-comments.
• For information regarding the factors that FDA would evaluate to determine whether prescription drug-use-related software output is consistent with FDA-required labeling, see the guidance entitled “Medical Product Communications That Are Consistent With the FDA-Required Labeling—Questions and Answers.”
• For more information on integrating digital therapeutics products into the compendia, contact PHSI.

[1] https://www.federalregister.gov/documents/2018/11/20/2018-25206/prescription-drug-use-related-software-establishment-of-a-public-docket-request-for-comments.

2019 Winter Newsletter:

The Evolution of Retail Discount Generic Programs

PHSI has been following the discount generic program landscape for over a decade.  Over the past few years, $4 generic lists have slowly melted away into the shadows of retail pharmacy.  There are no longer banners hanging from store fronts promoting these programs or prominent displays appearing on retail pharmacy websites.  Specifically, PHSI has analyzed the number of product offerings on discount generic lists in 2015 and again in 2018.  Several retail pharmacies, including CVS and Giant Eagle, have stopped offering $4 lists altogether.  For chains that have discontinued the $4 lists, cash-paying patients may now see their prescriptions being charged at the minimum prescription cash price.  Knowing all of this, it is surprising to see the launch of Kroger’s Rx Savings Club.

The Kroger Rx Savings program is a new paid program ($36/individual and $72/family of up to six) that offers three tiers of low-cost medications.  The first tier will include free generic medications, including sertraline, amlodipine, metformin IR, and montelukast.  Tiers two and three will respectively offer $3 and $6 30-day supplies.  Kroger has partnered with GoodRx to develop the program.  PHSI expects that the generic medications included in the Kroger Rx Savings program will offer additional discounts above those seen on the GoodRx website.

Although other chain pharmacies are not overtly advertising their discount generic programs, a review of their websites shows these programs still exist.  An overview of the major retailer generic discount programs is shown in the chart below.

Like the Kroger program, Walgreens discount program is a paid program that offers three tiers of generic medications.  As PHSI has mentioned in past newsletter articles, pharmacy chains have not been increasing the medications offered on their discount generic lists.  The Kroger Rx Savings Club may tout the inclusion of the popular (and somewhat new) generic atorvastatin, but, in general, the number of medications offered on discount generic lists has decreased.  Perhaps with the costlier membership fee, the Kroger program will have expanded drug offerings.  With high deductible health plans becoming more common, we may see renewed interest in discount generic programs, a la $4 lists.

Based on recent headlines, retailers are finding other ways to deliver value and entice customers to their stores.  Walmart recently revealed a deal with Express Scripts to launch InsideRx.  Inside Rx will provide uninsured patients with discounts on brand-name drugs, with Express Scripts estimating an average savings of 40%.  The PBM CVS Caremark also announced their new digital prescription savings card, Sharecare, which will help uninsured or underinsured patients.  The Sharecare App offers discounts within the CVS Caremark national pharmacy network, which includes not only CVS pharmacies, but Walmart, Rite Aid, and Walgreens stores.  With the plethora of options available, there is more competition than ever for the cash-paying patients.  PHSI will continue to monitor and report on these evolving retail pharmacy strategies.

2019 Winter Newsletter:

FDA Proposed Framework for Digital Therapeutics: “Prescription Drug-Use-Related Software”

PHSI Vice President Don Dietz and Consultant Melissa Krause contributed to the November/December 2018 edition of ComputerTalk for the Pharmacist. In their Viewpoints article, Don and Melissa discuss themes expected to impact pharmacy in 2019, including that pharmacies will continue to gain ground as healthcare destinations, through the expansion of immunizations administered by pharmacists; managing at-risk opioid patients; and continued market consolidation.

Click here to read Don and Melissa’s article entitled “Predictions for 2019”. You can read full versions of current and past ComputerTalk issues at https://www.computertalk.com/issue-archive/.

CVS Health, Express Scripts (ESI), and Optum Rx have published their formulary exclusion lists for 2019.  When comparing the number of new exclusions, PHSI has found slight variances between what PBMs announce, what outside entities report, and what PHSI research uncovers.  Numbers can vary based on whether multiple formulations of the same drug are counted as one or multiple additions (e.g. Vanatol S vs. Vanatol LQ).  While PHSI includes newly-excluded multi-source brands (brands that now have generics available), other reporting entities exclude these drugs from their totals.  With that disclaimer stated, PHSI has completed its annual analysis of the formulary exclusion lists.

PHSI calculates that ESI added an additional 59 items to their exclusion list, including both single-source and multi-source brands.  In an August Twitter post, CVS Health reported removing 23 drugs from the standard formulary for 2019, while other sources reported 26 removals.  When PHSI reviewed the January 2018 vs. January 2019 formulary drug removals, we noted 37 new exclusions.  Optum Rx will exclude 50 additional drugs in 2019.  The new 2019 exclusions, as researched by PHSI, are as follows.

During the analysis, PHSI observed the following highlights:

• There are some interesting exclusions in the HIV and Hepatitis C treatments, such as Atripla for HIV (excluded by Express Scripts and Optum) and Mavyret for Hep C (excluded by CVS and Express Scripts).
• There are new exclusions in hemophilia (Factor VIII products) as well, with Express Scripts excluding Eloctate, Recombinate, and Xyntha.
• In the multiple sclerosis category, CVS, Express Scripts, and Optum will exclude Extavia. Optum also excludes Plegridy.  Optum notes that “existing utilizers of these medications will be allowed to continue on therapy.”
• The PBMs also note other specialty product exclusions, such as the injectable Hyalgan (CVS), Saizen (Optum and CVS), and Berinert (ESI), as well as some fertility drugs.
• PBMs also appear to be focusing on more cost-effective pain management therapies and some have excluded Lazanda and Sprix.
• The introduction of Viagra generics in 2018 continues to shift coverage to lower cost products. In addition to the usual exclusions of brand products that have generic versions available, Stendra is now excluded on CVS and Optum lists (not mentioned on Express Scripts).
• The new class of CGRP migraine prevention agents had not made it onto the exclusion list since the drugs are so new, but Express Scripts has announced that they will cover Aimovig and Emgality, excluding Ajovy.[i]

Express Scripts uses indication-based management for the drug class of “inflammatory conditions,” which addresses products with a variety of indications including psoriasis, psoriatic arthritis, ankylosing spondylitis, among others.[ii]  Express Scripts notes the following regarding this drug class:

New for 2019 – PHSI has also analyzed Optum’s exclusion list.[iii]  While PHSI did not analyze Optum’s list in past years, PHSI notes that this list contains some updates from previous versions, including the addition of some new products such as Admelog and Sprix.

Interestingly, Optum has handled the “immunomodulator” class, as well as Hepatitis C and MS, using a “required prior authorization” approach.  This is akin to step therapy, though OptumRx does not use that term.  The following is an excerpt from Optum’s list on this topic:

Optum’s list notes the following regarding these classes:

“All of the products listed above are currently subject to prior authorization.  Preferred medications are required prior to new requests for non-preferred medication(s).  Existing utilizers of non-preferred medication(s) within the therapeutic categories of Hepatitis C, Immunomodulators, and Multiple Sclerosis will be eligible to remain on current therapy if compliance and efficacy of therapy are demonstrated.  Exceptions will be granted for specific indications where the preferred agents do not have FDA-approval for use.”

The major PBMs have taken different approaches to managing drug spend in 2019, but formulary exclusions in general continue to play a large role in that management.

This article represents PHSI’s analysis of publicly available information regarding these three PBMs’ formulary exclusion lists for 2019; readers are encouraged to assess the lists themselves.  Links to the exclusion list source information are provided below.

• CVS Health 2019 Exclusion List
• Express Scripts 2019 Exclusion List
• Optum 2019 Exclusion List

[i] Available https://www.managedhealthcareconnect.com/content/express-scripts-covers-amgen-lilly-migraine-therapies-excludes-teva-drug?hmpid=bWtyYXVzZUBwaHNpcnguY29t.  Accessed October 23, 2018.

[ii] Express Scripts 2019 National Preferred Formulary Exclusions.  Available https://www.express-scripts.com/art/pdf/Preferred_Drug_List_Exclusions2019.pdf.  Accessed October 23, 2018.

[iii] Optum January 1, 2019 Premium Formulary Exclusion List.   https://hr.nd.edu/assets/291074/optumrx_premium_formulary_exclusions_jan.._1_2019_finalv4.pdf.  Accessed October 23, 2018.

2018 Fall Newsletter:

“What Happens When We Run Out of NDC Numbers?” – FDA Announces Public Hearing

PHSI Consultants Melissa Krause and Ann Johnson contributed to the September/October 2018 edition of ComputerTalk for the Pharmacist. In their Viewpoints article, Melissa and Ann discuss the impact of drug product listings in the drug compendia to various stakeholders.

Click here to read Melissa and Ann’s article entitled “Importance of Correct Data in Health IT”. You can read full versions of current and past ComputerTalk issues at https://www.computertalk.com/issue-archive/.

PHSI President Tim Kosty contributed to the July/August 2018 edition of ComputerTalk for the Pharmacist. In his Viewpoints article, Tim discusses the impact of the 21^st Century Cures Act on electronically shared health information and the technology necessary to establish an interoperable system.

Click here to read Tim’s article entitled “Interoperability, FHIR, and Blockchain”. You can read full versions of current and past ComputerTalk issues at https://www.computertalk.com/issue-archive/.

Pharmacy Practice News shares multiple perspectives on Amazon’s acquisition of PillPack.  PHSI President Tim Kosty contributes thoughts on the financial viability of multi-dose packaging by pharmacies.

Click here to read the entire article.

Mepsevii (vestronidase alfa-vjbk) and Hemlibra (emicizumab-kxwh) are both single-source innovator products that have the 4-character, lowercase suffixes.  Neither have approved biosimilars.  With the introduction of Sandoz’s filgrastim-sndz in 2015, the FDA has added suffixes to generic names for biosimilars.  Between 2015 and 2018, the FDA provided additional guidance to the industry on biologics and biosimilars, including generic naming and suffixes.

The FDA uses suffixes to distinguish between biologic products with the same generic name, as they do not want to rely upon NDCs and branded names alone to determine the specific product utilized.  Their concern is pharmacovigilance and the ability to assign adverse events to specific manufacturers’ products.

The FDA will apply the suffix naming convention to all biosimilars and biologics, including both newly-licensed and existing products.  This will avoid adverse provider perceptions about product quality if only biosimilars included a suffix, while the originator was suffix-less.  In the future, all products approved with a BLA under 351(a) of the Public Health Service (PHS) Act will be assigned a suffix on the generic name.  Remicade (infliximab), Neupogen (filgrastim), and other originator biologics do not yet have suffixes, even though marketed biosimilars are available for these biologics.  This is still a work in progress for the FDA.  BLA applicants are requested to submit up to 10 proposed suffixes to the FDA.  These suffixes must follow the FDA-defined rules, which include having unique, four lowercase letter combinations that are devoid of meaning.  Be on the lookout for these updated naming conventions coming soon.

2018 Summer Newsletter:

The Challenges of Specialty Generics Competing with Orphan Brands

Generic pharmaceutical manufacturers face several challenges when launching the first or second ANDA generic that competes with an orphan brand product.  Challenges include the following:

• Will the brand manufacturer partner with another manufacturer (or subsidiary) to launch an authorized generic?
• Should you contract with specialty pharmacy partners? If yes, do you approach the same specialty pharmacies that distribute the brand product?
• Will the brand company increase rebates to the PBMs to influence their coverage decisions?
• What requirements will the large PBM-owned specialty pharmacies demand to support your generic product, including price, support fees, and data fees they are receiving from the brand manufacturer?
• What are the pros/cons of bypassing the wholesalers and direct contract with a handful of specialty pharmacies?
• What, if any, financial assistance programs will the generic manufacturer consider? What experience does the generic manufacturer have working with patient support groups and/or offering copay cards?

These specialty products serve small patient populations and the brand price is often very high. Limited access to active pharmaceutical ingredient (API), a difficult manufacturing process, and a small patient population may limit the discounting the generic manufacturer is able to provide.

Generic manufacturers must understand the pharmacy landscape for the existing brand product (i.e.: more aligned with PBM owned, stand-alone, or health plan owned pharmacies) to determine its pricing and support strategies. Strategic questions include:

• Are PBM incentives being addressed if all the discounts are given to the specialty pharmacy or vice versa?
• Are health plans and their specialty pharmacies aligned to pursue lowest net cost regardless whether its via plan rebates or pharmacy discounts?
• Will stand-alone specialty pharmacies have the payer coverage to provide adequate access to your product?

These questions should be addressed before finalizing a pharmacy and payer strategy. Specialty pharmacies and payers welcome the generic entrants to drive price competition in the marketplace.  The eventual marketing strategy must account for the influence these stakeholders exert on the payment and dispensing of the ANDA generic.

PHSI works with pharmaceutical manufacturers, PBMs/MCOs, and specialty pharmacies to help each stakeholder better understand market dynamics. Whether it is pipeline products or those where generics or biosimilars compete, PHSI has the expertise and resources to help our clients make informed business decisions to compete in a changing market.

2018 Summer Newsletter:

Single Source Biologics with Suffixes

PHSI President Tim Kosty presented “Interoperability, FHIR, and Blockchain: Where Do We Go from Here?” at the American Society for Automation in Pharmacy (ASAP) 2018 Midyear Conference. Tim’s presentation reviewed the challenges in developing and the progress in creating an interoperable health system, including the announcement from Apple that it will be creating a patient health record using the fast healthcare interoperability resources (FHIR) process. He explored the challenges for healthcare technology companies, healthcare providers, pharmacies, and patients, and discussed whether these efforts solve the right problem and whether technology such as blockchain will make these efforts obsolete.

Click here to view the presentation slides.

You can access all of the 2018 ASAP Midyear Conference presentations at http://www.asapnet.org.