Reprinted from DRUG BENEFIT NEWS, biweekly news and proven
cost management strategies for health plans, PBMs, pharma companies and
employers.
By Diana
Manos, Senior Reporter
September 22, 2017 Volume 18
Issue 18
Although spending on traditional drugs among
Medicaid fee-for-service (FFS) program beneficiaries held steady in 2015 and
2016, specialty pharmacy spending increased by double digits, according to a
Sept. 13 report from Magellan Rx Management, a division of Magellan Health
Services, Inc. Researchers say states could do more to contain costs.
But despite the double-digit specialty pharmacy
increase, “[r]efreshingly, there was a slight decline in traditional net cost
per claim over the two-year period,” Magellan researchers say. “In the
aggregate, the Medicaid FFS trend for all drugs increased 5.2 percent ($5.29)
at the gross cost per claim level and 1.9 percent ($0.91) at the net cost
level.”
The report also found specialty drug utilization
stayed constant, but the percentage of total net spend attributed to specialty
drugs increased by almost 5%. For the second year in a row, states slowed
spending on short-acting narcotics and opioids by 10%. Five drug classes
contributed to 40% of the total net spend but accounted for only 14% of total
claims, Magellan found. Out of those five classes, two were specialty: HIV/AIDS
and hemophilia. The report also found that six of the top 10 drugs by net spend
were specialty drugs (see table, p. 4).
“The study indicates that states, like
commercial plans, are not immune from the higher costs associated with
specialty drugs and highlights a real opportunity for states to take a more
innovative management approach,” said Magellan’s Doug Brown, vice president of
account management, pharmacy pricing and value-based solutions, in a company
statement.
The study, the second annual one on Medicaid
pharmacy spending issued by Magellan, was based on data analysis and Magellan’s
experience with Medicaid plans. It shows one challenge facing states is a
failure to enforce controls at the site of service. “Medical pharmacy
dispensing is an area where tighter adherence to clinical pathways would be
useful,” the study also says.
“State Medicaid programs can use many of the
same tools that commercial plans use to manage utilization and cost, including
preferred drug lists (PDLs), clinical edits, maximum allowable cost (MAC)
pricing, and rebate contracting,” study authors say, pointing out that one
unique tool states use in managing Medicaid FFS drug spending is a
brand-over-generic program (see table, p. 6).
By law, drug companies are required to pay state
Medicaid programs a minimum federal rebate or the best price offered to any
commercial plan for brand drugs, and a minimum federal rebate on generic drugs.
Both brand and generic drugs also are subject to an inflation penalty.
According to the Magellan report, most new brands have a minimum federal rebate
of 23.1% of average manufacturer price (AMP) while “established brands can
approach and exceed 90 percent of AMP” after years of federal rebates and
inflation penalties.
The report pointed to the antipsychotics class
as an example. Magellan estimated that states that were successful in
maintaining utilization of Otsuka America Pharmaceutical, Inc.’s Abilify
(aripiprazole) rather than the generic were able to save about $62 million in
2016. “Similar savings opportunities arose with the market introductions of
generics for Seroquel XR and Invega,” since states’ cost for the brand drugs
“were far less expensive than their generic equivalents.”
In addition, states can slow spending on
short-acting narcotics and opioids through clinical initiatives and prior
authorizations initiatives.
The Magellan research shows that specialty drug
utilization for the combined years of 2015 and 2016 was 1.6% of prescription
drug use but one-third of net spend. “Year over year, specialty net drug spend
increased almost five percentage points from 31.8 percent of net spend to 36.5
percent of net spend,” the study found.
Read the Magellan Medicaid trend report at http://bit.ly/2w30xpL.
https://aishealth.com/archive/ndbn092217-04?utm_source=Real%20Magnet&utm_medium=email&utm_campaign=118272248
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