News

"The FDA is prioritizing listening to patients by approving treatments quickly -- and in spite of the insurer backlash against accelerated approvals.... The major issue for insurers is cost. Insurers resent that drug companies can charge full price for a treatment that may or may not work.... Instead of refusing to cover a new drug, CMS and other insurers could condition the price they pay for a certain drug on its ability to achieve specific outcomes, including outcomes that are important to patients."

"[T]he departments ... intend to propose rulemaking that would align the standards that apply to large and self-insured group health plans with those that apply to individual and small group market plans ... If all prescription drugs covered by a plan are eventually considered EHBs, then a large or self-insured group health plan could not impose annual or lifetime dollar limits on those drugs. This could be an issue for certain high-cost drugs ... [and] if there would no longer be a way to define a covered drug as a 'non-EHB,' then some copay accumulator or maximizer programs may no longer be available for employers to use."

12 pages. "Consumers and employers will pay on average $50 more for single coverage and $175 more for family coverage in premiums in 2024 due to the markups charged by providers to supply specialty drugs that could have been supplied by a specialty pharmacy. The total value of health insurance premiums and premium equivalents that could have been saved if providers charged the same price for specialty drugs as those available from specialty pharmacies would be as much as $13.1 billion in 2024."

"[T]he Final Instructions ... kept the simplified methodology, without modification, as an alternative to the actuarial value test for 2025 for plans not seeking the RDS.... [E]mployers need to be prepared for modifications or a completely new 'simplified' method for 2026 and beyond.... Plan sponsors, particularly calendar year plans, should begin analysis ... to see what, if any, changes need to occur for their 2025 prescription drug plans."

"The final guidance provides some relief for plan sponsors with active plans and helpful clarification for those who take advantage of the [Retiree Drug Subsidy (RDS)] program.... Plans that test for creditable coverage for active employees will be able to continue to use the current testing methodology for 2025, which means it is less likely that plans would be found to not be creditable coverage."

"Prescription drug spending by private health plans climbed to nearly $152 billion in 2021, an 18 percent increase from 2016. Health plans generally rely on PBMs to process claims, develop pharmacy networks, and negotiate rebates from drug manufacturers.... GAO was asked to review states' regulation of PBMs serving private health plans. Among other things, this report describes actions selected states have taken to regulate PBMs, and lessons learned that state regulators identified for PBM regulation." [AO-24-106898 pub. Mar 18, 2024, rel. Apr 15, 2024]

"[T]he DOL issued an FAQ stating that it intends to propose rulemaking that would require large group market and self-funded group health plans to treat prescription drugs covered by the plan, including those in excess of the state benchmark plan, as EHB and, therefore, subject to the annual out-of-pocket limit."

20 pages. "The PBM regulatory landscape continues to evolve rapidly at both federal and state levels ... This Winter 2024 update builds on prior issues and highlights federal and state activity from October, November, and December 2023."

"In 2025, the IRA will significantly increase the richness of the defined standard benefit, raising the minimum standard for being creditable....The actuarial value of the reference plan will increase by 5% to 14% (additive increase of 3% to 8%) from 2024 to 2025. Benefit designs that are not creditable or were borderline creditable for the 2024 plan year are likely to be non-creditable for the 2025 plan year without some benefit enhancement."

"[T]he regulations and a contemporaneously issued FAQ also clarify certain EHB prescription drug requirements.... The FAQ clarifies that the regulation does not address the policy's application to large group market and self-insured health plans and indicates that the agencies intend to propose rulemaking that would also require these plans to treat prescription drugs covered by the plan or in excess of the applicable EHB benchmark as EHBs for purposes of the annual limitation on cost-sharing and the prohibition on annual and lifetime limits."

"TPAs, PBMs and other vendors have varying requirements and expectations of what they need from plan sponsors to successfully complete the reporting, and some may even be delegating some of the reporting responsibility to the plan sponsor.... If your vendor sent you an email or letter asking you to create a HIOS account or stating that they will not submit P2 and D1 on your behalf, that means you must submit P2 and D1 directly to CMS (or engage a third-party to submit them for you)."

"The bill requires PBMs to report all rebates and to use pass-through pricing instead of spread pricing. HB 596 also requires network adequacy standards at or above Medicare, limits patient steering, prohibits use of arbitrary accreditation standards, and sets parameters for what can be considered a specialty drug. Additionally, it establishes reimbursement appeals processes."

"State officials are continuing to negotiate with makers of weight-loss drugs in an effort to reach a better financial deal that would allow coverage of the drugs through the State Health Plan ... The State Health Plan stopped covering weight loss drugs such as Wegovy and Zepbound on [April 1]."

19 pages. "This paper describes policy concepts for consideration, including collaboration with the private sector to develop and implement a Manufacturer Resiliency Assessment Program (MRAP) and a Hospital Resilient Supply Program (HRSP). As described, the combination of these programs would bring transparency into the market, link purchasing and payment decisions to supply chain resilience practices, and incentivize investments in supply chain resilience and diversification in the supply chain -- including domestic manufacturing -- at a scale that would drive impactful change in the market."

"Although the statutory deadline for RxDC Reporting for the 2023 calendar year is June 1, 2024, most insurers, TPAs, and PBMs are willing to file on the plan sponsor's behalf if their internal process is followed and certain deadlines are met.... [P]lans that carved out Rx coverage through a third-party PBM during 2023 may have additional responsibilities (or help), dependent upon the PBM's particular approach."

"[T]otal gross Medicare spending on the three newest versions of these diabetes medications that have also been recently approved for weight loss -- Ozempic, Rybelsus, and Mounjaro -- has skyrocketed in recent years, rising from $57 million in 2018 to $5.7 billion in 2022.... [T]he combination of intense demand, new uses, and high prices for these treatments is likely to place tremendous pressure on Medicare spending, Part D plan costs, and premiums for Part D coverage."

"Health Reform was not designed to reduce the cost of employer-sponsored coverage for employers or employees. Surveys confirm that 160+ million Americans with employer-sponsored coverage saw their average premium increase 50+% over the past 12 years despite a tripling in the percentage of plans with deductibles in excess of $2,000."

"Many industry experts believe that this is the first of many fiduciary lawsuits to come in the medical and pharmacy space, particularly due to new transparency requirements.... ERISA plan sponsors should consider the following actions to limit exposure to fiduciary liability. [1] Know the terms of your PBM contract.... [2] Understand how your PBM is compensated.... [3] Consider PBM transparent pricing models.... [4] Work with your advisor or consultant to periodically review market options." [Lewandowski v. Johnson & Johnson, No. 23-0671 (D.N.J. complaint filed Feb. 5, 2024)]

"[CMS] today announced 41 drugs available through Medicare Part B will have a lowered Part B coinsurance rate from April 1-June 30, 2024, if the drug company raises prices faster than the rate of inflation. An estimated 763,700 people with Medicare use one or more of these drugs annually."

"Lewandowski reinforces how important it is for health plan fiduciaries to pay close attention to their plans' costs and fees ... Retirement plan 'excessive fee' litigation has ... reshaped the entire retirement industry -- from the pricing of investments to compensation paid to service providers to insurance and legal costs. If Lewandowski gains any traction and paves a new path of ERISA fiduciary litigation, we could see the same seismic disruption in the health plan industry." [Lewandowski v. Johnson & Johnson, No. 23-0671 (D.N.J. complaint filed Feb. 5, 2024)]

"Beginning in January 2025, Part D sponsors who charge a deductible will be required to allow patients to spread the payment of the deductible ... over 12 months rather than having to pay the full deductible up front.... Other changes taking effect January 1, 2025, include requiring Part D sponsors to ... [1] Cap out-of-pocket costs for a month's supply of each covered insulin product at $35. [2] Limit out-of-pocket drug costs to a maximum of $2,000."

"Several lawsuits pursuing a range of constitutional, statutory, and agency authority challenges to the Medicare drug price negotiation program enacted under the Inflation Reduction Act (IRA) remain ongoing.... This article examines recent developments in the ongoing litigation seeking to block the implementation of the Medicare drug price negotiation program, including: [1] a March 1, 2024 decision in AstraZeneca's lawsuit; [2] a February 12, 2024 decision dismissing the lawsuit brought by PhRMA and association allies; and [3] what to expect in the other pending lawsuits."

"Group health plan sponsors and health insurance issuers are required to submit an annual prescription drug data collection report to [CMS], detailing certain prescription drug benefits and other health care spending data respective of the group health plans they sponsor. [For] the 2023 calendar year reporting cycle, these informational disclosures must be provided to CMS on or before Saturday, June 1, 2024."

"This is the third season of RxDC reporting, which is due annually each year by June 1 ... Employers will typically be responsible for collecting and providing to their reporting vendor certain information referred to as the 'P2' plan information and 'D1' average monthly premium information. This year, CMS has simplified the D1 average monthly premium calculation."

"Core themes of these pieces of legislation are increasing transparency of PBM operations and prohibitions or limitations on the use of spread pricing, a technique where PBMs could profit from the margin between what health plans are charged and what is paid to pharmacies, potentially incentivizing formularies to favor more costly drugs.... A deep dive into these significant bills will help us understand the potential landscape of PBM regulation and its far-reaching implications for the health care system."