Although the Centers for Medicare and Medicaid Services gave the nod to CAR T-cell therapy, they’re still balking at paying for the treatment. This week, several articles in the Innovation Partners BioBlog look at how the nation’s health insurance industry, led by Medicare and Medicaid, are out of step with newer one-treatment and customized treatments. This and more in this week’s Innovation Partners BioBlog.

Image from curated article on Innovation Partners BioBlog Newsletter

CMS announces delay of CAR T-cell national coverage determination

Although the Centers for Medicare & Medicaid Services indicated it would cover CAR-T therapy, the national coverage determination is going to take longer than expected. CAR T-cell therapy utilizes a patient’s own immune system to attack tumors. While effective, it is also expensive. CMS did not give a reason for the delay. They have issued a memo in the past indicated Medicaid would pay for CAR T-cell therapy and an outline of a plan to organize how hospitals and doctors would be paid.

Health insurance deductibles up 150% over last decade: analysis

A study conducted by the Kaiser Family Foundation found that health insurance deductibles have jumped by 150% over the past decade. In 2009, the average deductible for a single person was $533. In 2018, it is $1,350. Additionally, the number of people required to pay a deductible on an employer’s plan rose from 59% in 2009 to 85% in 2018. Out of pocket spending also rose, in part because of higher deductibles. These increases underscore that people are feeling the pinch of the cost of healthcare more.

Are P&T Committees Wielding More Influence And Driving Larger Drug Rebates?

A Reuters article listed several committees behind the drug pricing debate: Pharmacy & Therapeutics (P&T) committee serving OptumRx, UnitedHealthCare’s pharmacy benefit manager (PBM). But, it also alluded to other large PBMs, such as Express Scripts and CVS Caremark (now merged with Cigna and Aetna, respectively), with similar P&T committees. Whether they can effectively drive formulary management and rebate negotiations depends on the available evidence for the prescription drugs that they review. They don’t drive rebates, but they do hold power over a drug’s chances of success.

Community Oncology Alliance pushing alternative to pricing index for Part B drugs

The Community Oncology Alliance is in discussions with congressional staff and the Trump administration about modifying the existing Medicare Part B payment structure as an alternative to the International Pricing Index that HHS Secretary Alex Azar has proposed for Part B drugs. Azar has been highly critical of the existing Part B payment system, which pays providers the average sales price (ASP) plus an add-on fee. The 6% add-on fee, which has been reduced to 4.3% by budget sequestration legislation, creates perverse incentives for providers to prescribe the most expensive regiments, and ASP commits the government to paying excessive prices, according to Azar.

Novartis CEO calls for new drug payment model ahead of Zolgensma launch

With a price tag possibly as high as $5 million, Novartis has a lot riding on the launch of Zolgensma, a spinal muscular atrophy (SMA) gene therapy treatment. In preparation for the rollout, Novartis CEO Vas Narasimhan is calling for changes to the U.S. drug payment system. The current drug payment system lags behind industry advances, focusing on pay as you go models rather than on cutting-edge treatments (such as Zolgensma) that are one treatment with a high price tag. These single treatments offer a potential cure, but at incredible cost. The current economic model does not take into account such new treatments and their associated costs.

CMS scales back plan to allow step therapy for Part D protected classes

The Centers for Medicare & Medicaid Services finalized a scaled-back version of a proposed rule that will allow Medicare Part D plan sponsors greater leeway to use prior authorization and step therapy for drugs in protected classes. The final rule allows Part D plans to use these utilization management tools for members starting new therapies and in all classes except antiretroviral drugs, codifying existing policy. CMS had initially proposed to allow prior authorization and step therapy in the protected classes without distinguishing between new starts and patients on existing therapies.