PHSI Newsletters

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

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  The proposed framework is for discussion purposes only; it is not a draft guidance but a way for FDA to seek input from stakeholders.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

[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

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.

Discount Generic List Chart

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”

Formulary Exclusion Lists for 2019

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.

PBM 2019 Exclusions Chart

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:

ESI Indication Based Management Graphic

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 PAs Graphic

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.

[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

Single Source Biologics with Suffixes

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

 

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

New NCPDP Standards Up for CMS Approval

Expect Approval in 2018 or Early 2019 and Deadline for Implementation Before or During 2021

In the next couple of years, the versions of the NCPDP standards used for online claims adjudication and electronic prescriptions will be changing.  Under HIPAA, CMS has the authority to name the specific version of these two standards for use across the industry.  The version currently in use for adjudication is NCPDP Telecommunications Standard D.0, mandatory since January 1, 2012, and the version currently in use for e-prescribing is NCPDP SCRIPT Standard 10.6, mandatory since November 1, 2013.

NCPDP membership started the process to request that CMS create a new rule naming a current version of each standard for use throughout the industry.  The process has progressed further for the SCRIPT Standard for e-prescribing.  On November 28, 2017, CMS published a proposed rule in the Federal Register recommending the adoption of SCRIPT Version 2017071 to become effective on January 1, 2019, at which time SCRIPT Version 10.6 would be retired.  The industry is strongly in favor of moving to the new version, but many consider the proposed deadline to be too aggressive.  During the comment period, parties, such as Surescripts, expressed concern that the January 1, 2019 deadline does not allow participants enough time to develop new software code, test the code internally and with business partners, and implement the software in thousands of practice sites.  Most commenters recommend a deadline that is 24 months from the effective date of the final rule mandating a new version of the SCRIPT Standard.  The industry is waiting for CMS to respond to industry comments and publish the final rule.

The process for naming a new version of the Telecommunications Standard is moving much slower.  At its November 2017 Work Group Meetings, NCPDP membership approved a request proposing Telecommunications Standard F2 to be the next named standard.  NCPDP submits the request via the DSMO (Designated Standard Maintenance Organizations), which forwards the request to the NCVHS (National Committee on Vital and Health Statistics) to send to CMS.  The industry is waiting for NCVHS to hold the appropriate hearing, which is scheduled for 3/26/2018.  If the hearings result in the recommendation to adopt F2, NCVHS will send a letter to the Secretary of HHS, which could lead to CMS publishing a new proposed rule naming F2 as the new standard.  When that event occurs, the industry can offer comments prior to CMS finalizing the rule.  The process to adopt Telecommunications Standard F2 is at least six months behind the process to adopt SCRIPT Standard 2017071, which means the earliest F2 could be adopted is July 2019.

However, it is difficult to predict how long these final approval processes will take.  The industry should expect final approval sometime in 2018 or early 2019.  These developments mean the new standards could be mandatory by 2021.  Pharmacy system vendors, EMR/e-prescribing software vendors, and claims processors should be preparing for these changes.  NCPDP members have access to the documentation created by membership for both SCRIPT and Telecommunications Standards, allowing for preparation to begin now.

Even though each standard will likely follow their own timeline, the possibility exists that individual development, testing and implementation of the changes to the two standards will overlap.  Vendors will need to size up each change and make sure to allocate the proper resources to meet the deadlines CMS will define in the final rules. PHSI will provide an update once CMS acts and publishes the final rules.

 

 

Update on New Standard Versions May 2018

In the final rule issued in April 2018, CMS officially adopted the NCPDP SCRIPT Standard Version 2017071 beginning on January 1, 2020 to replace the prior version 10.6.  It is interesting that CMS established January 1, 2020 as the implementation due date, a mere 20 months from the issuance of the final rule. Typically, the industry asks for 30 to 36 months to implement a new version of a standard.  This rule feels like CMS is saying to the industry that that is not good enough and to find a faster way to implement the new version.  Come Summer of 2019, it will be interesting to see how many vendors come forward asking for an extension of the deadline and the CMS response to such a request will be equally interesting.

There is also movement toward a new version of the Telecommunication Standard.  On May 17th, NCVHS recommended the adoption of Version F2.  NCVHS asked the Secretary of HHS to expedite the rulemaking as feasible, but to also be sure to allow the industry sufficient time to comply.  Specifically, the committee asked HHS:

  • To the extent possible, publish the final rule by the end of 2019.
  • To provide a two year implementation timeline, using June as the compliance month.
  • To require that the updated version of the standard be used by the compliance date, but allow both versions of the standards to be used for a one-year period after the compliance date to enable an effective transition period that allows the use of version D.0 and the new version F2.
  • To require full compliance by the end of the third year, and only allow use of Version F2.

The Committee also asked that industry, specifically the Medicare and Medicaid programs, be given sufficient time and encouragement for thorough end-to-end testing before any go-live date.

The industry now awaits the proposed and final rule from CMS. There are probably many software vendors that are hoping the approval of a new telecommunications standard will be delayed so it doesn’t coincide with the new e-prescribing standard. The NCVHS recommendation to use June as the compliance month instead of January 1st is a step in the right direction.  There are also rumblings that telecommunications standard version F2 is already obsolete and that during the comment period after the new proposed rulemaking is published, the industry should push for a move to a newer version that includes some recently required attributes.

See more information from the NCVHS letter to the HHS Secretary via this link: https://ncvhs.hhs.gov/wp-content/uploads/2018/08/Letter-to-Secretary-NCVHS-Recommendations-on-NCPDP-Pharmacy-Standards-Update.pdf

Stay tuned for more information about this and the expected new proposed rulemaking with approval of the telecommunications standard.

 

 

2018 Spring Newsletter

New & Improved Medicare Cards to Arrive Starting April 2018

Welcome Kinley Ruthann Ellek

New & Improved Medicare Cards to Arrive Starting April 2018

The Centers for Medicare & Medicaid Services (CMS) is implementing a fraud prevention initiative that removes Social Security Numbers (SSNs) from Medicare cards to help combat identity theft.  Because of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), the current SSN-based Health Insurance Claim Number (HICN) identifier will be replaced by a new Medicare Beneficiary Identifier (MBI) by April 2019.  Under the new system, for each person enrolled in Medicare, a new MBI will be assigned and a new Medicare card issued.  As with the SSN-based HICN, the MBI is confidential and should be handled and protected as Personally Identifiable Information.

The unique, alpha-numeric, randomly-generated 11-character MBI will be clearly different than the HICN number, and possess “non-intelligent” make-up (i.e., void of any hidden or special meaning).  The changeover will commence April 2018, starting with the mailing of new Medicare cards.  The mailings will be completed in phases by geographic location.  A transition period for Medicare beneficiaries to use either the HICN or MBI to exchange data will begin no earlier than April 1, 2018 and run through December 31, 2019.  Starting January 1, 2020, claims are to be submitted using MBIs, with a few exceptions pertaining to specific plans and fee-for-service claims.  Beneficiaries will not need to worry about coverage changes; the MBI will not alter Medicare benefits.

Personal identity theft affects a large and increasing number of seniors.  Individuals age 65 and older are increasingly found to be victims; incidents among this population increased from 2.1 to 2.6 million between 2012 and 2014, according to the Department of Justice.  Beyond the emotional toll, identify theft is financially taxing: two/thirds of all victims reported a direct financial loss.  Further, it disrupts lives, can damage credit ratings, and result in inaccuracies in medical records and costly false claims.  A sample of the new cards is shown below.

Medicare Card Image
Additional Items to Consider:

  • The new card design was:
    • Consumer tested by Medicare beneficiaries
    • Selected among 10 possible card designs
    • Preferred due to the maintenance of a red, white and blue color palette
    • Easy to read, copy, and scan at provider offices
    • A Smaller size to match the size of a standard credit card
    • Bilingual in English/Spanish
    • Lacking a gender and signature line, which did appear on traditional Medicare cards
    • Printed on white paper for all cards, including those for Puerto Rico
  • Destroy the old Medicare card
    • Once the new Medicare card has been received, patients should destroy the old Medicare card by putting it through a shredder or cutting it up, and start using the new card right away
  • The new card is paper
    • Paper cards are easier for many providers to use and copy, and they save taxpayers money
    • Beneficiaries can print replacement cards, if needed
  • Beware of Phone Scams
    • Callers claiming to represent Medicare or the government requesting bank account information for direct deposit
      • Medicare already has a patient’s direct deposit information and will not need to call for it because of the new ID card
    • Callers claiming to represent a bank requesting a patient’s old or new Medicare ID for direct deposit
      • Banks do not need the new Medicare ID number to complete direct deposit transactions
    • Callers claiming that they can provide the new Medicare ID card for a fee
      • The new Medicare ID cards are free and will be sent automatically at the appropriate time
  • Keep your Medicare Advantage Card
    • If a patient is a beneficiary of a Medicare Advantage Plan (HMO or PPO), their Medicare Advantage Plan ID card is their main card for Medicare, so they should keep and use it whenever care is needed

The new Medicare identification cards offer greater fraud protection for beneficiaries.  The pharmacy can assist in educating patients and caregivers to ensure a smooth transition.

 

 

2018 Spring Newsletter

New NCPDP Standards Up for CMS Approval

Welcome Kinley Ruthann Ellek

Welcome Kinley Ruthann Ellek

On behalf of the entire PHSI team, our heartfelt congratulations to Ashley and George Ellek.  They are the proud parents of a beautiful baby girl, Kinley Ruthann.  Kinley was born on Tuesday, February 20th at 12:07 am, weighing 9lbs 1 oz and 20.5 inches long.  The family is tickled pink with the birth of their first child.


Kinley photo

2018 Spring Newsletter

New NCPDP Standards Up for CMS Approval

New & Improved Medicare Cards to Arrive Starting April 2018

2018 Winter Newsletter- $4 Generic Lists: A Declining Proposition

Although discount generic lists were the centerpiece of many retail pharmacy advertising campaigns in the early 2010s, we rarely hear pharmacies tout their existence today.  Instead of being front and center on retail pharmacy webpages, discount generic lists are now embedded deeper within the websites, if listed at all.  PHSI first looked at the changing landscape of discount generic programs three years ago in our Winter 2015 Newsletter.  Since then, PHSI has continued to track the product offerings on these lists and noted decreasing or stagnant offerings.

Although generic drug pricing is currently in a deflationary period, pharmacy chains have not increased the number of products listed on their discount generic lists.  In the past, rising generic costs made the inclusion of many products unsustainable, but for many generics, this is no longer the case.  PHSI has tracked the discount generic programs of major pharmacy chains since 2012 and found that all chains have decreased the number of medications offered.  The chart below illustrates the annual changes in the number of included drugs.

Discount Generic Lists Chart

Walgreens still has the most robust generic drug program, with approximately 537 drugs included in 2017, while CVS has essentially discontinued their discount generic list.  CVS moved to a new “Reduced Rx Savings Program”, which only includes three Novolin insulin products.  While some pharmacy discount generic lists contain niche products, 124 drugs appear on all eight pharmacy lists.  These drugs are commodity generics and include meloxicam, metformin, lisinopril, amoxicillin, benazepril, citalopram, and clonidine, among others.  At acquisition costs of pennies per unit, these products can still provide modest revenue and a positive gross margin.

With the increasing prevalence of high deductible plans, we could see a rise in the popularity of discount generic lists.  High deductible health plans are forcing patients to become more price-driven in their search for pharmaceuticals, as flat-dollar copays are replaced in the deductible stage.  Stakeholders should expect patients in plans with a prescription deductible to behave more like cash-paying patients versus traditional commercially insured patients.  Competitive cash pricing will appeal to these patients.

Despite modest attention from patients in prescription deductible plans, will we see a resurgence in $4 lists?  PHSI’s answer… probably not.  While Walmart’s $4 list is an enticement to get patients into their stores, pharmacy chains do not make enough dollar profits on these programs to expand them.  Pharmacies analyze their PBM reimbursement rates when considering new candidates for discount generic lists or for eliminating current products.  With 90+% of drugs being reimbursed via third party insurance, pharmacies do not want to change their Usual and Customary (U&C) pricing to invoke the “lower of” clause in their PBM contracts, reducing the profitability on the vast majority of their prescriptions.  PHSI will continue to monitor discount generic drug lists and publish updates identifying changing market strategies.

 

2018 Winter Newsletter- 2017 New Drug Approvals

2018 Winter Newsletter- 2017 New Drug Approvals

2017 had the most drug approvals this decade, more than double the number approved in a disappointing 2016.  The FDA approved 46 new molecular entities and many other approvals for new indications, dosage forms, and formulations.  The following chart depicts the number of new drug approvals in recent years.

Novel Drug Approvals

Trends in Approvals

Oncology

Oncology is the therapeutic category with the most drug approvals in 2017.  The FDA approved 11 new drugs for different forms of cancer:  Aliqopa, Alunbrig, Bavencio, Besponsa, Calquence, Idhifa, Imfinzi, Kisqali, Nerlynx, Verzenio, and Zejula.

Neurology

Neurology increased from four in 2016 to seven in 2017.  The new medications for neurological conditions are Ingrezza for tardive dyskinesia, Austedo for chorea associated with Huntington’s disease, Brineura for Batten disease, Emflaza for Duchenne muscular dystrophy, Ocrevus for multiple sclerosis, Radicava for ALS, and Xadago for Parkinson’s disease.

Inflammatory Conditions

Two new treatments for plaque psoriasis, Siliq and Tremfya, and one treatment for rheumatoid arthritis, Kevzara, were approved in 2017.

Diabetes

Ozempic and Steglatro were approved for patients with Type 2 diabetes in 2017, up from one new drug approval in 2016 (Adlyxin).

PHSI analyzed the FDA approvals and categorized them by approval type, indication, and other factors, as shown in the following table.  PHSI identified drugs which were considered First-in-Class, and those that are Drugs for Rare Diseases, also known as orphan drugs.  2017 was a big year for orphan drugs, representing nearly 40% of new drug approvals.

PHSI segmented approvals by timing considered by the FDA including Fast Track, Breakthrough Therapy, and Accelerated Approval.  In some cases, more than one accelerated designation was employed to help bring the drug to market.

Specific Approval Types for 2017 Approvals (Final)

This article only contains new molecular entities approved in 2017.  To see all of the over 4,000 approvals that occurred in 2017, please visit the FDA’s Drugs@FDA website.

Sources:

U.S. Food and Drug Administration.  “Novel Drug Approvals for 2017.”  Last Updated January 11, 2018.  Available https://www.fda.gov/Drugs/DevelopmentApprovalProcess/DrugInnovation/ucm537040.htm.  Accessed January 11, 2018.

U.S. Food and Drug Administration Center for Drug Evaluation and Research.  “Advancing Health through Innovation:  2017 New Drug Therapy Approvals.”  January 2018.  Available https://www.fda.gov/downloads/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CDER/ReportsBudgets/UCM591976.pdf.  Accessed January 11, 2018.

 

2018 Winter Newsletter- $4 Generic Lists: A Declining Proposition