Impacts of the End of COVID-19 Public Health Emergency on PBMs/Payers

The Department of Health and Human Services (HHS) is planning for the federal Public Health Emergency (PHE) for COVID-19 to expire at the end of the day on May 11, 2023.¹ The end of this era, which began as a declaration under Section 319 of the Public Health Service (PHS) Act, will result in anticipated changes across COVID-19 testing, vaccines, treatments, and Medicaid coverage requirements. The effects that these changes will have on PBMs and payers are considered below.

Tests

The requirement for private insurance companies to cover COVID-19 tests without cost sharing, both for OTC and laboratory tests, will end. This implies that PBMs/payers would be able to choose to remove member coverage for COVID-19 at-home tests. Payers will have to weigh the cost-benefit of removing at-home test coverage vs. members potentially electing more costly lab testing or foregoing testing (and the window for early treatment) altogether, which could lead to costlier medical treatments down the road.

Vaccines

As of February 2023, Congress has not agreed to the president’s requests for additional government funding to provide vaccines free of charge.² However, vaccines recommended by the Advisory Committee on Immunization Practices (ACIP) are a preventive health service and therefore HHS expects that most private insurance plans will fully cover COVID-19 vaccines without a co-pay. PBMs/payers may see their vaccine costs increase due to members potentially having used and now losing access to free COVID-19 vaccines and boosters that had been previously available.  Pfizer has previously announced that their COVID-19 vaccine will cost $110-$130 per dose once the PHE ends.³

Treatments

HHS acknowledges that “out-of-pocket expenses for certain treatments [e.g., Paxlovid and Lagevrio] may change, depending on an individual’s health care coverage, similar to costs that one may experience for other drugs through traditional coverage,”¹ implying that programs like 2022’s federal government purchase and free distribution (throughout select pharmacies) of 20 million courses of Paxlovid will no longer continue. PBMs/payers may therefore see an increase in claims for COVID-19 treatments. The estimated cost of one course of Paxlovid treatment in 2022 was $530⁴, and 2023 costs may be higher.

Medicaid

During the COVID-19 public health emergency, the federal government prohibited states from removing people from the Medicaid program once they had enrolled. In late 2022, Congress communicated to states that they can start removing ineligible people (i.e., due to excess income or relocation out of state) in April 2023. PBMs/payers may see additional membership applications from members’ dependents that lose access to Medicaid once the prohibition is lifted.

What other impacts to PBMs and payers do you expect to see when the Public Health Emergency ends May 11^th?  PHSL will continue to monitor and report upon changes.

¹  https://www.hhs.gov/about/news/2023/02/09/fact-sheet-covid-19-public-health-emergency-transition-roadmap.html

² https://wusfnews.wusf.usf.edu/politics-issues/2023-02-01/how-will-life-change-once-the-covid-19-emergency-ends

3 https://www.hhs.gov/about/news/2023/02/09/fact-sheet-covid-19-public-health-emergency-transition-roadmap.html

⁴ https://www.talktomira.com/post/how-much-does-paxlovid-cost-and-where-to-get-it

Posted: March 2023