Payers Try New Strategies to Control Diabetes Drug Costs

by Lisa Gillespie

With the cost of diabetes drugs still growing, PBMs and payers are looking for more innovative strategies to hold down costs. For some, that might include a strategy similar to the one recently unveiled by CVS Health Corp.’s Caremark unit. The plan, called RxZERO, offers a slimmer formulary for the diabetes drug class, but with no out-of-pocket costs for members.

Mike Schneider, a principal in the commercialization and market access practice at Avalere Health, says the plan is innovative. “You’ve seen Express Scripts do something where they’re offering specific insulins at very low out-of-pocket costs, but this is the first time I’ve seen a PBM come up with a way to eliminate out-of-pocket costs completely,” he tells AIS Health.

With the elimination of copays and other cost-sharing payments for diabetes drugs, CVS is betting members will better adhere to drug regimens and potentially avoid unnecessary hospitalizations and other services.

But these types of plans might not work for all member populations. Marc Guieb, a pharmacy consultant at Milliman, Inc., says member satisfaction can play a part in whether a plan sponsor goes this route, or sticks to a more traditional strategy that places higher-cost drugs in a step therapy plan.

The market for diabetes drugs is tight, with a few big manufacturers that all have similar prices. But there’s one new player, Civica Rx, that’s aiming to change that. In January, 18 plans in the Blue Cross Blue Shield Association joined with Civica Rx to produce up to 10 generic drugs at low cost by 2021.

Included in the partnership is Blue Shield of California, where Alison Lum is the vice president of pharmacy services. “The way that we’ve managed [drugs] in the past probably won’t get us to be sustainably affordable in the future,” Lum says. “We have to think about new ways of doing things.”

From RADAR on Drug Benefits