New Generic HIV Drug May Impact PrEP Coverage, Not HIV Coverage

by Bronwyn Mixter

A generic version of Truvada coming on the market later this year will affect how payers cover pre-exposure prophylaxis (PrEP), but it will not significantly change how payers cover HIV drugs, experts tell AIS Health.

Gilead Sciences, Inc.'s Truvada (emtricitabine/tenofovir disoproxil fumarate) was approved by the FDA in 2004 to treat HIV infection in combination with other antiretroviral drugs. In 2012, it also was approved as the first drug for PrEP. In March 2019, Gilead announced that it had entered into an agreement with Teva Pharmaceutical Industries Ltd. to allow the company to launch its generic version on Sept. 30, 2020.

Payer coverage of PrEP also will be affected by a recommendation from the U.S. Preventive Services Task Force (USPSTF). In 2019, the USPSTF recommended PrEP therapy for those at high risk of HIV acquisition, according to a white paper written by Lynn Nishida, R.Ph., vice president of clinical product and contracting for WithMe Health.

"With the USPSTF recommendation, Medicaid expansion programs and health plans are going to have to cover PrEP without any cost sharing," says Tim Horn, director of medication access and pricing at the National Alliance of State & Territorial AIDS Directors. Therefore, payers will move toward generic versions.

Dan Mendelson, founder and former CEO of consulting firm Avalere Health, says that whenever a drug goes generic, payers usually have a plan in place to make sure the generic is used. "The more expensive the drug, the more likely that the plan will be comprehensive and aggressive," he says.

Since HIV is one of the six protected classes in the Medicare Part D program, Part D plans typically cover all HIV products, says Michael Schneider, principal at Avalere Health, as there is little to no rebating in the category. "So, there is really no incentive for the PBMs acting on behalf of their clients, the plans, to do anything in terms of a utilization management standpoint or negotiation standpoint outside of just bringing the generics on formulary."

Most of the branded HIV products are in the Part D specialty tier, requiring coinsurance, due to their high cost. When a generic comes on the market, plans typically will remove the branded product and then place the generic in the specialty tier or the preferred brand tier depending on the cost of the generic product, he says.

From RADAR on Drug Benefits