Mari Edlin is a frequent contributor to Managed Healthcare Executive. She is based in Sonoma, California.

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Inflammatory conditions took the lead in drug spending in 2017-a 15.3% increase over 2016-with $157.49 per person per year. Spending is expected to climb another 16% in 2018, 15% in 2019, and 14% in 2020, according to the 

Oncology ranked third after diabetes in spending with a 17.4% increase over 2016-$70.66 per person per year-with projected increases of 17%, 13%, and 11.3% for 2018, 2019 and 2020, respectively, the report says.

By 2022, the top 15 cancer drugs are predicted to accrue almost $90 billion in sales, about one-fourth of the U.S., pharmaceutical market in 2014, according to QuintilesIMS.

Hepatitis C indicates a decline in spend from 2017 to 2020, ranking 14

 in Express Scripts’ top therapy classes with a decrease of -31.2% in 2017 compared to 2016, and additional projected decreases of -11.1%, -0.1% and -1.6%, from 2018 to 2020, respectively.

While inflammatory conditions and oncology have remained first and third on the spend list for 2015 and 2016, respectively, hepatitis C fell from fourth in 2015 to 11

Spending in all three therapeutic categories is plagued by high-cost specialty drugs, leaving managers of pharmacy benefits struggling to find savings.

Ken Majkowski, PharmD, chief pharmacy officer at FamilyWize, a community-based organization that offers a free prescriptions savings program, believes RA drug costs might decrease with the introduction of biosimilars for Humira (adalimumab) and Remicade (infliximab).

Humira’s dominance in the RA marketplace is to blame for high costs, says Christine Strahl, PharmD, senior manager of specialty pharmacy programs for HealthPartners, a health plan. “Discounts have not kept pace with Humira’s rising cost even though there is competition. With the largest list of indications, it remains in the driver’s seat.”

Glen Stettin, MD, senior vice president and chief innovation officer for Express Scripts, agrees with his PBM’s trend report: Utilization of RA drugs will increase. However, he is more optimistic about the opportunity to leverage existing competition by indication through formulary preferences, keeping RA drug prices in tow.

Jessica Turgon, principal at ECG, a management consulting firm, predicts that prices for cancer drugs will rise in the next five years as the FDA approves more drugs for oncology conditions. “Manufacturers are trying to recoup their investment in developing high-cost drugs, but they are feeling pressure from the industry to keep increases at 10% or lower,” she says. “There are no price controls.”

Strahl agrees. “There are only about two to three drugs per cancer indication so there’s not much activity by manufacturers to discount them,” she says. “It’s up to PBMs and insurers to pressure them; manufacturers are primarily in the driver’s seat.”

Stettin expects a robust oncology pipeline but going forward, he also predicts less competition due to specification. On the other hand, he anticipates that generic versions of Gleevec could impact drug pricing.

Mona Chitre, PharmD, chief pharmacy officer and vice president, clinical operations and health innovation, Excellus BlueCross BlueShield, attributes the rising cost of oncology drugs to new combinations, such as Opdivo (nivolumab) that has been used as a single agent to treat metastatic melanoma and is now prescribed in combination with Yervoy (ipilimumab). The price has jumped from a $150,000 single agent to $250,000 for both.

David Lassen, PharmD, chief clinical officer, Prime Therapeutics, a PBM, attributes the higher cost of drugs to their marked improvement in efficacy, advancement toward a cure, lack of competition, and new drugs targeting additional indications.

Stettin says Hep C drug utilization has tanked and will be flat by 2019 to 2020 even though drugs for the condition are expensive. “Hepatitis C is extremely well managed, and we have identified those who need the drugs and ensured adherence,” he says.

Strahl, of HealthPartners also expects utilization to decrease but right now she says there is a slight increase with new drugs that fight resistance experienced by some patients on other drugs. Among them are Mavyret (glecaprevir/pibrentasvir).

HealthPartners has created a Pharmacy Navigator program for Hep C that supports members on high-cost drugs through personalized outreach to increase adherence and contain costs.

Articles

Experts weigh in on the spending outlook for these high-cost conditions.

How RA, Cancer, Hep C Drug Costs Will Change Over Next Five Years

	A lack of national standards and less than optimal oversight of many inpatient, opioid addiction rehabilitation programs is raising questions about the level of services, personnel, and quality of care many patients are receiving. On the other end of the spectrum, however, are programs dedicated to guiding patients on the road to recovery.

 estimates that 114 people die a day because of drugs, and 6,748 will visit hospital emergency rooms for treatment. A survey conducted by the HHS 

 (SAMHSA) finds, however, that as many as 90% of people who most need drug rehab do not receive it. 

	Treatment approaches run the gamut from abstinence, detox, and 12-step programs, to comprehensive programs embracing a combination of group and individual psychological therapy, medication-assisted treatment (MAT), treating co-occurring conditions, and social services. The variety of programs and discrepancies in quality not only breeds skeptics of the addiction rehab industry, but also opens the door for scammers.

	Private insurers are spending millions on opioid addiction treatment-up 1,000% between 2010 and 2015 to $721 million, according to Fair Health-prompted by President George W. Bush’s 2008 parity law requiring most group health plans to provide more generous coverage for treatment of mental illnesses. The 2010 ACA cemented coverage even further.

		Today, there are more than 14,000 specialty addiction treatment programs in the United States, according to SAMHSA’s 

National Survey of Substance Abuse Treatment Services

	“What programs are offered is pretty much up to a rehab facility,” says Carolyn Coker Ross, MD, author, speaker, and consultant in the treatment of addictions, eating disorders, and obesity in La Jolla, California. “While there are some governing organizations ([the Joint Commission] and CARF), they do not dictate what is offered. And the level of treatment providers varies immensely.”

	“Often times, poor rehab programs offer nice amenities in a scenic location, but lack the appropriate clinical care,” says Lisa Blanchard, vice president, clinical services, Spectrum Health Systems, which provides addiction treatment services, including 

. “They have great mattresses, HD TVs, and horseback riding, but these programs usually suffer from inadequate staffing combined with a lack of clear recovery programming.

	“Conversely, good programs have a clear clinical vision and are accommodating, hold clients accountable to expectations, are friendly and inviting with strong customer service, and have strong values and commitment to each client’s recovery,” she says. “The staff should be knowledgeable, well-educated, and compassionate. Good programs also have strong aftercare and family engagement components, as both of these are vital to sustaining recovery.” 

	Blanchard says that facilities newer to the market are usually backed by venture capitalists looking to make a financial boom in lieu of providing appropriate care. “Nationally, there has been an increase of these ‘destination facilities,’ usually in Florida or California but could be found anywhere,” she says.

	Marvin Ventrell, executor director of the National Association of Addiction Treatment Providers, agrees with Blanchard. “Because of industry growth and an increased ability to profit, private investors are putting money into new centers or buying them. They are in it for the ROI, which doesn’t usually equate with quality care.”

	Until recently, says Scott Olson, CEO, Pathway Healthcare, there were really only two kinds of treatment for opioid addiction: methodone clinics, mostly for those on Medicaid; and residential programs, inpatient rehab clinics often for the very wealthy. Headquartered in Dallas, Pathway provides addiction treatment and recovery clinics. They combine MAT, using buprenorphine and naloxone, along with behavioral therapy.

	What bothers Olson is a philosophy deployed by some rehab centers-recovering or ex-addicts helping patients, which makes no sense to him. “If a person’s life is in chaos, how can he or she help someone else?” he asks. “We can’t afford to promote poor care.”

	Caron Treatment Centers, based in Wernersville, Pennsylvania, offers a multidisciplinary approach to address the co-occurring disorders often associated with substance use. It incorporates various treatment modalities, such as cognitive behavioral therapy (CBT) and dialectical behavioral therapy (DBT), psychological testing, medical evaluations, and 12-step integration.

	Doug Tieman, president/CEO, says Caron endorses the utilization of MAT-primarily Vivitrol (naltrexone extended release) or Suboxone (buprenorphine and naloxone)-but not methadone, and stresses that MAT alone is not a panacea.

	Narcan (naloxone) rounds out the list of other available medications under MAT for opioid addiction.

	“Medication must be used as a supportive tool and managed by a qualified healthcare professional in collaboration with treatment specialists as part of a comprehensive therapeutic program,” Tieman says. “We identify patients for whom we think MAT will be a good fit and educate all patients about the disease concept of addiction and the importance of implementing evidence-based practices to sustain a meaningful and healthy recovery.”

	Milking the system seems rampant with no national standards and few binding ones from states to oversee lengths of stay, kinds and costs of treatment, providers and effectiveness, and safety of programs. As noted, only two bodies-CARF (Commission on Accreditation of Rehabilitation Facilities) and the Joint Commission offer voluntary accreditation.

	“In certain parts of the country, there is rampant corruption because of the potential for making large sums of money which draws in criminals and other non-licensed people to run these centers,” Coker Ross says. “Quality of care is hugely variable. The sad part is the parents are desperate to get help for their loved ones. They have no way of knowing which treatment facilities are legitimate and which are scams.”  

	She is concerned that CARF and the Joint Commission are too lax.

	“Drug addiction is a politically handicapped problem without a national push that requires money,” she says.

	“The substance abuse area is a field that has become a ripe market in the past 10 years for profiteers and charlatans,” Tieman says. “It’s disgraceful to take advantage of a national tragedy, preying on those who need help.

	National standards are missing because the addiction problem is only a tiny fraction of the healthcare dollar, he says, adding that most facilities are small and “pull little weight.” There also is still a stigma attached to mental health problems, he adds.

	“This is gaming the system,” Tieman says, referring to increasing costs for insurers and profits for treatment centers. “It’s unethical and unacceptable for centers to maximize insurance billing at the expense of doing the right thing for patient clinically.”

	Blanchard uncovers another inherent problem in the industry-unscrupulous facilities that access potential clients through social media (Google, Facebook, late-night TV ads).

	“The industry has gotten a black eye because business practices and marketing have been deceptive to customers,” Ventrell says. “Providers are pretending to be advocates, preying on sufferers by telling them an expert can help without any legitimate evaluation. It’s about the profit motive.”

National Association of Addiction Treatment Providers

 has put its foot down in achieving improvement in the system. Last December, it revised its 2012 Code of Ethics mandating that NAATP members adhere to ethical marketing and billing practices outlined in its Quality Control Initiative, including patient brokering, leads buying and selling, insurance billing abuse, deceptive call aggregation and services misrepresentation, as a condition of membership.

		The Office of National Drug Control Policy says that many factors contribute to efficacy of treatment programs: reduced drug use and improvements in physical and mental health, education, relationships, and employment. 

	Olson says that if opioid addiction is considered a chronic disease, it needs lifetime management, making it difficult to find a metric for success. “You also have to look at emotional issues behind addiction-those that affect abuse and relapse,” he says.

	Although there haven’t been a lot of statistics on the success of rehab addiction treatment programs, the Surgeon General’s Report outlines the following as key aspects to success:

		 Reduction of key symptoms (for example, substance use) to non-problematic levels.

		 Improvement in general health and function.

		Training the patient and family to recognize and self-manage potential precipitants of future relapse.

	Tieman cites some specific improvements-verified by the University of Pennsylvania-at Caron Treatment Centers via its My First Year Recovery Program, which costs Caron $8,000 per patient:

		76.4% of participants were abstinent at completion of the one-year program;

		93% reported that their quality of life was good to very good at the completion of the program;

		81% of those who completed the program continued to attend outpatient addiction treatment throughout the first year and are working on a recovery program;

		93.7% attended 12-step meetings during the first year; and

		·86.7% secured a sponsor post program during the 12-month program.

	To increase the chances of pushing patients toward recovery, rehab centers are slowly adopting MAT. On October 17, 2000, Congress passed the Drug Addiction Treatment Act (DATA) that permits qualified physicians to treat narcotic dependence with schedules III-V narcotic controlled substances that have been approved by the FDA for that indication.

	Revised Federal Guidelines for Opioid Treatment Programs (OTPs), published by SAMHSA in 2015, prescribe regulations for providing MAT to patients.

	OTPs are required to have current valid accreditation status, SAMHSA certification. and Drug Enforcement Administration registration, before they are able to administer or dispense opioid drugs for opioid addiction treatment.

	These regulations apply to opioid agonist treatment medications that are FDA-approved, including methadone and pharmaceutical products containing buprenorphine. Compliance with the regulations is assessed by SAMHSA-approved and monitored accrediting organizations, such as CARF International, The Joint Commission, and the National Commission on Correctional Health Care.

	Despite legislation, fewer than half of drug rehab programs utilize a MAT program for addiction treatment. Even with half of privately funded addiction treatment centers offering a MAT program, only around one-third of clients are getting this type of drug addiction treatment, according to 

 National Institute on Drug Abuse at the National Institutes of Health. However, according to the agency, MAT treatment cuts the relapse rate by 50% to 61%.

	Gary Mendell, CEO/founder of New York City-based Shatterproof, an organization dedicated to helping end addiction and substance abuse, has developed National Principles of Care for quality addiction treatment with approval from 16 insurers. His eight principles are based on the Surgeon General’s Report and also are consistent with the National Institute on Drug Abuse’s Principles on Drug Addiction Treatment:

	Routine screenings at every medical setting.

		Disease management rather than 28 days.

		Behavioral healthcare from legitimate providers.

		Support for recovery outside a doctor’s office.

	Mendell also is in the process of building a scorecard with ratings to determine which providers are in line with the principles, helping insurers decide whom to include in their networks, and helping consumers choose the best providers.

A lack of national standards and less than optimal oversight of many inpatient, opioid addiction rehabilitation programs is raising questions about the level of services, personnel, and quality of care many patients are receiving.

Scammers, Fraudsters Capitalize on Opioid Addiction Treatment

	The top three pharmacy challenges for 2018: drug affordability, nonadherence, and pharmacist compensation, may come as no surprise to many of you.

	The new year, however, brings some additional challenges to the fore and further complicates the challenges the industry already faces, as outlined by industry experts. The primary impetus is wrought by the fragility of healthcare reform and the new healthcare landscape-a marketplace filled with high-cost drugs; evidence-based care; pharmacy benefits managers (PBMs) facing more pressure to share pricing and rebate practices; expanded roles for pharmacists; and new partnerships formed among insurers, PBMs and pharmacies.    

	Affordability has long been a concern but has ratcheted up attention with the introduction of high-cost specialty pharmacy moving in to replace drugs off patent or to fill voids in new drug classes. The affordability problem is exacerbated by banner years of drug approvals, often due to accelerated pathways, and blockbuster drugs.

PharmD, associate dean, clinical affairs, Long Island University-Pharmacy, says prescription drug plans must be affordable to the public while not driving pharmacies and insurance companies out of business. “Everyone needs some margin,” he says. “The obvious challenge is to be able to provide effective care at the lowest cost.”

	John Corcoran, founder/president of Trinity Partners, a global life sciences consulting firm, questions how the high price of some drugs can be justified. “You have to look at value and if drugs improve quality of life and decrease the burden of disease, not just at safety and effectiveness,” he says. “If there are superior outcomes, payers will be willing to cover expensive drugs, but Pharma needs to respond.”

	Corcoran points to other factors impacting drug affordability: aging baby boomers; longer life expectancy; and increased prevalence of obesity, dementia, and Alzheimer’s-all affecting drug utilization. “The industry needs to understand and acknowledge these changes in the marketplace,” he says.

	There have been some innovative solutions to combat high costs, says Mike Rogers

managing director, RX Solutions, the pharmacy benefits management consulting arm of NFP, “but there is little control over drug inflation.” He blames manufacturers and pharmacies for the high prices, however, he acknowledges the necessity of providing appropriate drugs to patients with cancer and chronic illness-regardless of their high costs. 

	Rogers offers up a few solutions: looking at data to determine drug utilization, who is taking what, and if there are alternatives. Placing responsibility on payers, including employers-he recommends narrow formularies and pharmacy networks to leverage better pricing.

	Drug adherence is a perennial problem, and of course, drug affordability is a big contributor.

	“Patients receive prescriptions and either don’t take them or don’t refill them because they find them to be too expensive or they feel asymptomatic,” says Bernard Tyrrell, associate dean, pharmacy and industry relations, Keck Graduate Institute, a private graduate school. “Antibiotics, drugs with a short course of therapy, however, might be an exception.”

	He says mail order improves access to drugs for chronic diseases, but patients often don’t understand how to take the medication correctly. “Mail delivery creates an impersonal relationship,” he says.

	He places some responsibility for the nonadherence problem on pharmacists. He says they could help reconcile a patient’s regimen to ensure drugs are taken correctly.

	Kelly Ann Barnes, vice president, pharmacy verification and information for PharmacyChecker.com, which verifies U.S. and international online pharmacies and compares prescription drug prices, agrees that cost is a major driver of nonadherence.

	“There are new factors affecting drugs today-higher prices, company mergers, and higher cost generics that often are no longer low-cost alternatives to branded drugs,” she says. “Not taking medications is a revolving issue with many consequences.”

	Like Tyrrell, she says pharmacists are in the best position to remedy the problem.

PwC an advisory and tax service firm, says “a new role” is needed for retail pharmacies, helping them become an integral part of established healthcare. “Now retail pharmacies can’t just be convenient; they also have to prove value by committing to finding solutions to pharmacy challenges, connecting to patients, and improving engagement and partnering with other healthcare stakeholders,” she says.

	Appropriate reimbursement for pharmacists-especially community pharmacists-is a third major challenge.

	Tyrrell and DiGregorio agree that pharmacists are not being compensated for services beyond dispensing drugs even though they are providing cognitive services, such as medication management, patient education, and counseling; reducing polypharmacy; promoting adherence; and giving wellness and prevention screenings.

	Enhanced medication therapy management is one of the few mechanisms enabling reimbursement for community pharmacists. Tyrrell says legislation is needed to turn the situation around.

outpatient hospital or physician office settings

 have more opportunity to bill for special services. According to the Academy of Managed Care Pharmacy, these pharmacists have three options for reimbursement in a fee-for-service setting:

		They can work as part of a physicians' group practice and file for payment under a physician's provider number;

		They can be recognized as a provider and bill a managed care organization directly; or

		Patients can pay cash for their services.

	Pharmacists are not currently recognized as a provider under Medicare and, therefore, cannot bill Medicare directly for services under the Part B benefit.

	“Too often pharmacists and PBMs are at odds with each other with reimbursement formulas and policies that have made it hard for pharmacists to survive on a system that has historically been driven by the mark ups of prescription drug products,” DiGregorio says. “Pharmacists do not wish to be compensated in this model, and the need to drive the cost down for PBMs is creating demand for a new model to provide for the cost of professional cognitive services.” He would like to see outcomes tied to reimbursement rates.

	“Until pharmacists receive provider status,” Barnes adds, “plans will not compensate them even though their functions have grown.”

Find out what challenges top the list, and what analysts say can be done about them. 

The top three pharmacy challenges of 2018

Diabetes, autoimmune disorders, and oncology continue to be high areas of interest to managed healthcare executives in 2018. With a variety of new, high-cost drugs, chronic obstructive pulmonary disease (COPD) joins the top four therapeutic categories.

The projected specialty/biotech trend is 17.7% in 2018, down from the 18.7% in 2017, according to Segal Consulting. Although the trend is lower, specialty drugs still consumed one-third of total drug costs in 2016, with expected growth to 50% by 2020, according to Segal.  

Prime Therapeutics, a pharmacy benefits manager (PBM), reports that through mid-year 2017, specialty spending on the medical and pharmacy benefits combined was about 45%.

Here are some of the latest developments in the top four therapeutic areas for 2018:

Merck’s follow-on insulin glargine product, Lusduna Nexvue, was granted “tentative approval” in 2017, but its market availability-probably 2018 or 2019-is contingent upon resolving ongoing patent litigation. 

“Although not A-rated, or a substitute at the point of service with Lantus, an already approved insulin glargine, it is a therapeutic option,” says Christopher Peterson, director of clinical evaluation and policy for Express Scripts, a PBM.

At press time, approval of Mylan’s product, Basalog, another insulin glargine, is expected in July 2018, but like Merck’s product, it might face patent litigation before it becomes available. 

Sanofi’s Admelog (insulin lispro), a follow-on protein to Eli Lilly’s Humalog, received approval in December 2017, and availability will likely occur in 2018, Peterson says. 

Another class of diabetes medications to watch is the glucagon-like peptide-1 (GLP-1) receptor agonists, Peterson says. Novo Nordisk’s semaglutide injection, Ozempic, a once-weekly GLP-1, received approval in December 2017. This product joins the company’s diabetes portfolio, which currently includes the once-daily GLP-1 analog, Victoza (liraglutide). Other GLP-1 receptor agonists include AstraZeneca’s Byetta (exenatide) and Eli Lilly’s Trulicity (dulaglutide). 

At press time, it is also anticipated that Merck and Pfizer will receive approval shortly for their new sodium glucose cotransporter-2 (SGLT-2) inhibitor, ertugliflozin, an oral therapy resulting in excretion of excess glucose in the urine and decreasing blood glucose levels.

“The SGLT-2 inhibitor class will continue to grow due to the positive cardiovascular outcomes data from studies with Invokana and Jardiance,” Peterson says. 

Manufacturers are also combining diabetes drugs for increased effectiveness. Merck is expected to receive approval for ertugliflozin combination products shortly after press time, which will be taken with metformin and Merck’s Januvia (sitagliptin). In addition, Victoza joins a long-acting, basil insulin, such as Lantus or Levemir, as a rela tively new way to treat diabetes. 

“This combination makes it work better and helps to reduce post-meal hyperglycemia and weight gain that can sometimes occur if a long-acting drug is taken by itself,” says Julie Rubin, director of clinical services for CompleteRx pharmacy consulting firm.

She says, however, that the combination of drugs might increase costs for already expensive drugs because patients are now using two drugs at the same time. 

On the other hand, Patrick Gleason, senior director of outcomes for Prime Therapeutics, says combinations might increase utilization, providing more opportunity for controlling diabetes, even if the costs are higher. “The value is in preventing heart attacks, something that might take years with just glucose control,” he says. 

Oncology is a fertile therapeutic category with 15 drugs approved in 2017 by press time. Aimee Tharaldson, a senior clinical pharmacist at Express Scripts, says breakthrough cancer therapies-several of which are immunotherapies such as programmed cell death protein (PD-1) inhibitors and chimeric antigen receptor T-cell (CAR T) therapy-are going to continue to reach the market quickly based on early data. 

She also says more oral drugs will gain approval; 40% of those in the pipeline are administered orally.

Because personalized medicine is making inroads into oncology, many cancer drugs will be accompanied by pharmacogenetic tests to identify appropriate candidates for therapy.

Sandy Smith, vice president, U.S. oncology research, McKesson Specialty Health, says 2017 brought better understanding of immunotherapy, and how drugs are clinically benefiting patients based on individual characteristics and biomarkers and why certain drugs succeed in one person and not another. While immunotherapy is primarily targeting oncology, she anticipates that use will expand to other disease states.  

In November, the FDA introduced a comprehensive policy framework for the development and oversight of regenerative medicine products that could help spur the development of treatments involving human cells and tissues, including gene therapy.

One of the challenges, Smith says, is that often immunotherapy doesn’t immediately reduce the size of a tumor but could initially indicate pseudo progression. “Without sufficient education, patients won’t want to use immunotherapy,” Smith says. On the other hand, she is optimistic about immunotherapy’s effect on long-term survival, patient toleration, and quality of life. 

Smith says these therapies could be quite expensive, especially when used in combination with other medications. But she says costs could become sustainable when genetic modifications improve and when these drugs are used only for select patients. 

In August 2017, the FDA approved the first gene therapy-Kymriah (tisagenlecleucel), a CAR T therapy from Novartis for the treatment of certain pediatric and young adult patients with a form of acute lymphoblastic leukemia who have relapsed at least twice or no longer respond to standard treatments. 

Although one multicenter trial indicates an overall remission rate of 83% within three months of treatment, the price tag for a one-time infusion could be out of reach at $475,000. A Risk Evaluation and Mitigation Strategy (REMS) is attached to the drug.

A second CAR T therapy, Yescarta (axicabtagene ciloleucel) from Kite/Gilead, followed on the heels of Kymriah, with approval in October 2017. It is indicated for adult patients with relapsed or refractory forms of non-Hodgkin lymphoma with a one-time infusion cost of $373,000. It also is accompanied by REMS, as well as a boxed warning.

Tharaldson anticipates that a third CAR T drug might be approved in the second half of 2018, as a second-line treatment for a form of non-Hodgkin lymphoma. Kymriah is expected to gain this expanded indication possibly in the second half of 2018.

Sanofi and Regeneron’s Cemiplimab (REGN2810), a breakthrough therapy in development for the treatment of adults with locally advanced, unresectable or metastatic cutaneous squamous cell carcinoma (CSCC), is expected to be the next PD-1 inhibitor to be approved, also in the second half of 2018. While other PD-1 inhibitors are on the market, Cemiplimab is the only one that targets CSCC.

Janssen’s Tremfya (guselkumab), a biologic in a new class of medications that inhibit interleukin-23 (IL-23), was approved in July 2017 for adults with moderate to severe plaque psoriasis.

The drug, which has a prolonged dosing interval of every eight weeks by subcutaneous injection after induction dosing, was approved based on clinical trials that demonstrated improved skin clearance compared to Humira. 

Tremfya might be approved for an expanded psoriatic arthritis indication in 2018, says Tharaldson. 

Other IL-23 inhibitors in the pipeline at press time include Sun Pharmaceuticals’ tildrakizumab, which is expected to be approved by March 2018, and AbbVie and Boehringer Ingelheim’s risankizumab, which might be approved in 2019.

“IL-23 inhibitors have demonstrated strong efficacy and are expected to eventually capture a significant part of the psoriasis market,” Tharaldson says.

Baricitinib is Incyte/Eli Lilly’s new Janus kinase (JAK) inhibitor. The RA-BEAM controlled trial, published in The New England Journal of Medicine in February 2017, shows that baricitinib, which requires only one dose daily, is superior to Humira in improving signs and symptoms in patients with rheumatoid arthritis (RA). 

In April, the FDA sent Eli Lilly and Incyte a complete response letter for baricitinib, asking for additional clinical data to determine the most appropriate dose and more clinical data to understand the potential risk of thromboembolic events. 

The companies responded that they will resubmit their application for approval by the end of January 2018 and hope to be off and running by next summer.

AbbVie also has a JAK inhibitor, upadacitinib, which may be approved for RA in 2019.

Gleason is concerned that these drugs will not result in a value payout from medical offset because patients with autoimmune diseases are plagued by several other conditions and by the drugs’ high prices.

Following on the heels of three COPD medications approved in 2017 is Sunovion’s SUN-101 (glycopyrrolate nebulization solution), a long-acting, muscarinic antagonist (LAMA) that allows for rapid administration of the product. Its approval is expected shortly after press time. AstraZeneca/Pearl also are planning a new product for COPD, a twice-daily, inhaled LAMA. 

While triple therapy-a combination of an inhaled corticosteroid, a LAMA, and a long-acting beta agonist-shook the market in 2017, Peterson says that the largest impact on the market in 2018 could be the introduction of the first generic to Advair Diskus, a long-acting, beta agonist/inhaled corticosteroid. Sandoz’ generic is currently under FDA review with a possible approval in mid-2018, along with Advair generics from Mylan and Hikma/Vectura headed for the second half of 2018.

At press time, AstraZeneca is awaiting approval of Daxas (roflumilast), which counteracts the effect of an enzyme that contributes to inflammation, due to its side effect profile. In November 2017, the company also received FDA approval for Fasenra (benralizumab), for severe eosinophilic asthma. It is the first respiratory biologic with an eight-week maintenance dosing schedule. Also being evaluated for COPD, benralizumab is expected to hit the market in first or second quarter 2018.

“Benralizumab, however, doesn’t have the brand recognition that dupilumab does,” Lyle says, “even though it has proved equal in efficacy in clinical trials. Both drugs represent a new method of delivery as self-injectables, placing responsibility on patients and specialty pharmacies for adherence. Now that the door is open, there are likely to be me-too drugs in this space.”

Lyle foresees that these drugs offer a value proposition and will land on formularies with prior authorization and step therapy.

Prepare for major pipeline developments in diabetes, autoimmune disorders, oncology, and COPD.

Four therapeutic areas to watch in 2018

When two pharmacy benefits managers (PBMs)-Express Scripts and CVS Health-recently launched direct-to-consumer, drug discount cards, the pharmacy industry might have wondered if these pharmacy middlemen were trying out a new role.

Discount cards are certainly not an anomaly in pharmacy, but they are less common when sponsored by PBMs and marketed directly to consumers. Pharmacies, such as Walmart, and many drug manufacturers have offered discount drug cards and coupons for years.

Blink Health, for example, offers one year of free prescriptions for metformin, glipizide, and pioglitazone to anyone creating an account on its website. It also has partnered with Eli Lily, offering a 40% discount on the manufacturer’s insulin, including Humalog, an insulin patient access program.

In 2013, Medipact acquired ScriptSave, a PBM offering consumer-focused pharmacy loyalty programs. Consumers can expect an average savings of 45% and up to 80% on brand and generic prescription drugs regardless of insurance status. More than 62,000 pharmacies across the country accept the card, with no limits on its use.

The two new drug discount cards that partner with pharmacies and manufacturers align with the high rate of patients who don’t take their medications due to their high costs. More than 125,000 deaths and up to $300 billion are attributed annually to nonadherence to medication, according to a 

In addition, many brands are unaffordable for the 30 million who 

CVS Caremark offers reduced insulin rates

Since 2006, CVS Caremark has offered the EasyDrugCard, which provides savings on prescriptions at all of its retail stores. This year, CVS Health created Reduced Rx, a prescription savings program that offers discounts on certain medications directly to patients through CVS Health's pharmacy benefits manager, CVS Caremark. The program will help patients with high out-of-pocket costs afford essential medications.

The program targets those without health insurance, the underinsured who might have a drug that is not covered by a plan, and people with high-deductible plans. Medication costs, however, will not count toward a deductible or maximum out-of-pocket expense.

The program only covers Novo Nordisk’s Novolin, an insulin, and cannot be used with any insurance.

“We developed the Reduced Rx prescription savings program with Novo Nordisk because we both recognized a need and an opportunity to make critical medications more affordable for patients.  Our belief is that significant numbers of patients with diabetes could benefit from this program,” says a CVS Health spokesperson.

“As one of the largest drug purchasers in the U.S. healthcare system, we employ industry-leading strategies to encourage more competitive pricing, reduce trend, and make drugs more affordable and accessible for patients who need them,” the CVS spokesperson says.

Tom Borzilleri, CEO of InteliSys Health, a software technology company based in San Diego, says the rising cost of insulin is scaring patients with diabetes and often make the medications unaffordable. The average price of insulin almost tripled between 2002 and 2013, according to the American Diabetes Association

Consumers may purchase a 10 mL vial of the insulin for $25 through the program at 67,000 pharmacies in the CVS Caremark retail network, including more than 9,700 CVS pharmacies nationwide. That represents a potential savings of up to $100 for a patient paying out of pocket. CVS Health intends to expand the Reduced Rx prescription savings program to other medications and to address other conditions. 

Borzilleri believes that despite the drug discount card, many consumers will probably pay more for the drugs than they should. 

He says prices for most of the drugs discounted on new PBM cards are competitive, so the new prescription programs are seen as a means of differentiating one PBM from another. “These cards are built upon loyalty,” he says. “Cards have generated billions for PBMs and marketers-passing savings onto customers without affecting PBM profit margins.”

According to CVS, the PBM is able to offer a lower price through its discount card because it is working closely with pharmaceutical manufacturers that are committed to providing more affordable medications to the people who need them. Pharmaceutical manufacturers will assume a portion of the cost of the prescription medication dispensed under the program.

According to CVS Health, the creation of Reduced Rx in May comes on the heels of a January announcement that the company, working with Impax Laboratories, has made the authorized generic for Adrenaclick, an epinephrine auto-injector for patients with allergic reactions, available at all CVS Pharmacy locations at the lowest cash price in the market-$109.99 for a two-pack.

Borzilleri sees a consolidation of the drug discount card market and PBMs, with the latter working with marketing companies to push their cards to consumers. “Companies are pitting one card against another to offer the lowest possible prices, which are presented through a mobile app,” he explains.

“There are about 20 different independent discount cards not affiliated with an insurer, so these new direct-to-consumer offerings present a way for PBMs to orchestrate their own programs,” says Wayne Dix, vice president, SSA & Company, a management consulting firm.

“PBMs are competing with existing cards and with manufacturers’ direct-to-consumer coupons to earn increased revenue for manufacturers and themselves,” he says. “They are trying out the concept to see how the market reacts. OptumRx is well-positioned to offer a direct-to-consumer, drug discount card because of its relationship with UnitedHealthcare if it’s not too much of a financial risk. The new cards also empower consumers with more options.

“If the cards can make drugs more affordable and increase compliance, that is the right endgame,” Dix says.

Similar to CVS, Express Scripts leverages its independence, scale, and size to negotiate rebates on drugs, which are passed directly to consumers in the form of a discount at the point of sale.

“Inside Rx opens a new market for Express Scripts that has not been previously addressed,” says Leslie Achter, CEO of Inside Rx, a partially owned subsidiary of Express Scripts in partnership with GoodRx, a drug discount program. “Our traditional role is playing intermediary between manufacturers and primarily health plans and employer groups. Our goal is to combat high prices for those who need it the most-new patients who are either uninsured or underinsured.”

Users, however, cannot be insured under Medicare, Medicaid, Tricare, or other state- or federally-funded benefit plans, nor can they combine the discount cards with any insurance benefit, copayment assistance program, or other third-party, financial benefits.

Individuals can download and/or print the card from 

. They bring this card and their prescription to one of the 40,000 participating pharmacies, including CVS, Albertsons, Walgreens, and Kroger, and pay for 30-day supplies of more than 40, mostly branded medications for diabetes, asthma, 

, depression, allergy, gastrointestinal conditions, gout, and heart health-categories Achter says are the most highly utilized and costly. The offerings include Nexium, fluticasone propionate, Spiriva, and Crestor. Inside Rx plans to add more drugs to the program.

When the card was first launched May 8, 2017, individuals saw an average of a 34% discount on a drug’s typical cash price; now that has risen to 40%.

Inside Rx works with eight manufacturers, including Sanofi, Takeda Pharmaceuticals, Teva Pharmaceuticals, Eli Lilly and Boehringer Ingelheim, to negotiate prices on behalf of 20,000 consumers for broad access. Among the 43 products the cards cover is Humalog, an insulin lispro injection, which can be purchased at a 50% discount. The cards have resulted in a savings of $1.3 million.

“CVS and Express Scripts have made deals directly with select brand drug manufacturers, and their new programs will be limited to a narrow selection of high-priced drugs,” Borzilleri says. “This is a strategy to disrupt the copayment assistance from marketing companies in which Express Scripts and CVS receive the brunt of the rebates and brand incentives that are normally paid to the marketing companies to perhaps lower prices further and increase profits by knocking out the middlemen.” 

Discount cards vs. coupons: are they different?

“The new offerings from Express Scripts and CVS do not differ too much from what Medimpact is doing with ScriptSave. They are just revitalizing an old model. There is still the ingredient spread that increases the price of these medications,” says Borzilleri.

“The primary difference is that the drug discount cards MedImpact/ScriptSave has been marketing both directly and through a number of marketers over the last eight-plus years provided discounts on its entire formulary of both brand and generic drugs and not just select drugs in specific therapy classes,” he says.

In addition, Borzilleri points out, the program is Express Scripts’ first foray into the drug discount card market; it only supported funded programs in the past and never touched cash programs.

Achter emphasizes that Express Scripts’ new drug discount card is different from traditional drug manufacturers’ coupons:

·      Inside Rx leverages Express Scripts’ purchasing power to negotiate with manufacturers and achieve point-of-sale discounts on select medications.

·      Unlike traditional drug manufacturer copayment cards that are for one drug, Inside Rx provides point-of-sale discounts for more than 40 brand and generic medications.

·      Copayment cards traditionally are for people with insurance, whereas Inside Rx can be used by anybody-especially for those who are uninsured. “This is important because it gives people, who need it most access to affordable medications,” she says.

·      There is no expiration date, and the card can be used over and over.

On the other hand, CVS marketed its own card program, which required an annual fee of $20 to receive a discount off of its usual and customary price if a customer had no insurance or prescription coverage. “This program enabled CVS to earn the ingredient spread that the PBMs were absorbing as profit when CVS filled prescriptions under the drug discount programs that were administrated by companies such as MedImpact/ScriptSave,” Borzilleri says.

He also notes that pharmacies really don’t like discount card programs, but are forced to honor them or run the risk of losing a PBM’s funded business. “They are working on ways to shift the billion dollar profits made by PBMs to themselves,” he says.

PBMs partnering with pharmacies and drug makers may have a solution to nonadherence due to high pharma costs.