Excerpt from the article…

Medicaid—a federal/state partnership with shared authority and financing—is a health insurance program for low-income individuals, children, their parents, the elderly and people with disabilities. Medicaid pays for health care for more than 74.5 million people nationally. Although participation is optional, all 50 states participate in the Medicaid program. However, eligibility for Medicaid benefits varies widely among the states - all states must meet federal minimum requirements, but they have options for expanding Medicaid beyond the minimum federal guidelines, the details are outlined here.

What’s Next for Medicaid expansion? States are considering the costs and benefits of expansion, and whether or not to pursue expansion through innovative Section 1115 waivers. Recent changes may affect enhanced federal financing for expansion populations, conditions for eligibility, and enrollment and renewal procedures.

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CVS announcement of cost-effective benchmarks puts ICER in the spotlight

Excerpt from the article:


Last week’s announcement by CVS Health, which operates one of the country’s largest pharmacy benefit managers, is a harbinger of what may lie ahead for drug pricing and access in the United States.

In what it called an effort to nudge drug makers to reduce launch prices to a reasonable level, CVS said it would allow its Caremark clients — health plans, self-funded employer groups, and the like — to exclude drugs from their formularies (essentially a list of covered drugs) that don’t meet a benchmark of $100,000 per quality-adjusted life year in analyses by the independent Institute for Clinical and Economic Review (ICER). The initial focus will be on so-called me-too drugs, those where therapeutic alternatives exist, and exclude those the Food and Drug Administration deems as breakthrough drugs.

From the employer’s or insurer’s perspective, an ICER analysis indicating that a drug does not meet the quality-adjusted life year benchmark provides a transparent rationale for why certain products aren’t covered by the plan. From the patient’s perspective, it means that the drugs on the formulary are covered by their benefit, while they can get access to a drug that isn’t on the formulary only if they pay for it or go through an appeals and grievance process.

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Despite increased spending, orphan drugs still small piece of US medicines market

Oct. 18, 2017

Dive Brief:

Orphan medicines account for only about 8% of total U.S. drug spending, new research shows, even as the number of rare disease drugs on the market has jumped sharply over the past five years.

In 2016, the U.S. spent $36 billion on orphan indications of approved drugs — up nearly seven-fold from 2000, but still a small share of the overall medicine budget, according to a report from QuintilesIMS Institute

Both pharma and biotech alike have focused more investment in recent years into developing new drugs for rare diseases, lured by the prospect of greater pricing power and higher barriers to entry for competitors.

Dive Insight:

The Orphan Drug Act, enacted in 1983, is largely credited with spurring drugmaker interest in markets characterized by small patient populations and debilitating, but less-studied, diseases.

Regulatory incentives like longer market exclusivity mean drugmakers can be richly rewarded for successfully developing new rare disease drugs. Since many of these diseases have few, if any, existing treatment options, companies with an approved orphan medicine have greater pricing power and a clearer value proposition for payers.

Since passage of the Orphan Drug Act, 449 distinct drugs with an orphan indication have been OK'd for sale by the Food and Drug Administration. More than 130 of those approvals have come in the last five years, indicating the rising level of interest from industry.

Growth in spending on orphan medicines hasn't matched those skyrocketing approval numbers. Since 1993, the share of total US spending on drugs attributable to orphan indications has risen from 3% to 8% last year, according to QuintilesIMS.

While some orphan drugs command prices in the hundreds of thousands of dollars, QuintilesIMS found the median annual cost across the board was $32,000. For the top 10 drugs by use, such as Roche's Gazyva (obinutuzumab), that figure dropped to just under $15,000.

To be sure, both price points are still expensive. Yet the data crunched by QuintilesIMS shows the priciest orphan drugs are not necessarily representative of the larger product group.

QuintilesIMS tracked both drugs approved only for orphan indications as well as those with both orphan and non-orphan indications, a group that totaled 98 mixed-use drugs.

Of those nearly 100 drugs, 54 were approved for a non-orphan indication first before being green lit for use in a more niche rare disease. These numbers provide some evidence for the concern that drugmakers are using orphan indications to help extend the regulatory protection for drugs used in wider populations.

AbbVie Inc.'s Humira (adalimumab) is a good example of this, having been OK'd for five non-orphan indications before the drugmaker sought regulator sign-off for use in several rarer diseases like hidradenitis suppurativa and pediatric Crohn's disease. 

"For those molecules with both orphan and non-orphan indications, the non-orphan indications typically represent the majority of their use and sales," the report noted. 

Editor's note: This post has been updated to include further detail on drugs with approved for both orphan and non-orphan indications. 

Recommended Reading:

·        QUINTILESIMS INSTITUTE Orphan Drugs in the United States