The prescription drug space is making headlines everyday with stories ranging from novel drug approvals to political and legislative proposals that have PBMs and drug manufacturers on edge. Here are three current issues that should be on every plan sponsor’s radar.


1. Novel Treatment Approvals

2018 made the record books with 59 new drug approvals by the FDA. This number doesn’t even include expanded uses of medications already on the market, new formulations and dosages, or even biosimilar approvals. And, the proliferation of new treatment options has continued this year. Here are just a few to watch:

  • Zulresso™ claims to provide much faster relief from postpartum depression reducing the effect time from four weeks to 48 hours. This one-time, 60-hour continuous infusion is expected to cost $34,000, plus hospital charges.
  • Mayzent™ is a new oral therapy option for patients suffering with multiple sclerosis. This breakthrough indication assists individuals with active secondary progressive disease. Although the annual cost is expected to average $88,500, this is less expensive than initial projections. Unfortunately, the price tag is still about 87% higher than what industry watchdogs would consider value-warranted.
  • Spravato™ is a Ketamine-like nasal spray approved for use in conjunction with an oral antidepressant to assist adults with treatment-resistant depression. Eight hundred treatment centers have been approved to administer this controlled substance. The price is expected to vary between $600-$900 per dose. The first year of therapy could cost as much as $45,000.
  • Plenity hydrogel capsules for weight management will offer the 150 million+ Americans with unhealthy bodyweight another treatment option as it is approved for those with a BMI 25 – 40. Note, this capsule is a prescription “device” as it contains hydrogel particles that expand within the stomach to provide a feeling of fullness. The cost and efficacy/appropriateness are still to be determined.

We are increasingly seeing new and more expensive solutions to relatively common problems. Will the new drugs produce significantly better outcomes and/or fewer side effects? Will they be used as first lines of treatment or only prescribed for particularly difficult cases that don’t respond to established therapies? Will they be one-time fixes or turn these plan members into ongoing high-cost claimants? Clinical and coverage questions are increasingly presenting themselves as high-stakes decisions.


2. Generic Availability

Increased generic availability should eliminate some familiar names from employers’ top-spend reports in 2019.

  • With its recent approval of the first generic naloxone nasal spray, the FDA removed a barrier to access the life-saving opioid reversal drug Narcan. Although not yet available over-the-counter, by releasing its model labeling for such a product earlier this year, the FDA is clearly encouraging drug companies to submit applications.
  • Pregabalin, generic Lyrica (a popular medication for nerve pain), should bring welcome relief to those paying a high price tag in July 2019. Thirteen manufacturers already have received approval or tentative approval to provide this capsule formulation to the market.
  • Fluticasone propionate and salmeterol or Wixela Inhub provide the first FDA-approved generic version of Advair, offering those with asthma or COPD the potential to save hundreds of dollars per script.
  • Trastuzumab-qyyp is the fourth approved biosimilar for Herceptin, which is used to treat patients diagnosed with certain types of breast or stomach cancer. A 2017 study estimated that biosimilars could cut US biologic drug spend by $54 billion from 2017-2026.

Will your plan quickly take advantage of these lower-cost therapies or hang on to generous rebates offered by brand name alternatives?


3. Rebates and Legislative Actions

Rebates are offered to PBMs by drug manufacturers as a means of securing a position within the formulary. These rebates, in part or full, may be passed on to the employer as either a direct reimbursement or reinvested to offset expenses.

  • There is a proposal to replace existing safe harbor protection for drug rebates with two new rules. First, a drug manufacturer will only be allowed to pay a PBM for actual services. Second, drug rebates may be applied as a discount at the point of sale. Although these changes would initially only apply to Medicare/Medicaid, most believe the updates will ultimately be applied to all health plans. Watch for a response to the public comments that closed April 8.
  • Speaking before Congress on April 10, drug manufacturers pointed to the rebate system as the reason for high drug costs. Next steps from this hearing are not known; however, legislators did express concern for Express Scripts’ recent announcement of a $25 maximum out-of-pocket patient expense for insulin. This was labeled by many a publicity stunt, considering the overall cost of insulin wasn’t actually lowered.
  • The Creating and Restoring Equal Access to Equivalent Samples (CREATESAct would ban “pay for delay” tactics preventing generic competition.
  • By allowing the FDA to accept a generic drug manufacturer’s application to bring competition to the market if the first approved generic maker has not launched their product, the Blocking Act also assists with generic competition.
  • Looking to strengthen regulation of the massive $40 billion dietary supplements industry, the FDA is taking steps to protect patients from unlawful ingredients. Consumers can now sign up for a free email alert system to receive safety notifications.

There is no shortage of activity on these three fronts, so stay tuned for details and look for even more change on the horizon.