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All News > Prescription Drug Costs

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Administration Receives Counteroffers from Drug Companies as Part of Ongoing Negotiations to Lower Drug Prices
U.S. Department of Health and Human Services [HHS] Link to more items from this source
Mar. 4, 2024

"[A]ll manufacturers participating in the first cycle of Medicare drug price negotiations have responded with counteroffers.... Negotiations will continue over the next several months. If HHS and a participating manufacturer agree on a maximum fair price by the end of the negotiation period, those new negotiated prices will be published by September 1, 2024, and take effect beginning in 2026."

Tags: Medicare  •  Prescription Drug Costs

Oregon's Drug Price Transparency Law Deemed Unconstitutional by Federal District Court
Sidley Austin LLP Link to more items from this source
Feb. 29, 2024

"[T]he court held that [1] HB 4005's price increase reporting requirements violate the First Amendment and [2] HB 4005 effects an unconstitutional taking of drug manufacturers' private property by authorizing the state to manufacturers' trade secrets if the 'public interest' requires such publication. The ruling ... could spur challenges to similar drug price transparency laws in other states." [Pharmaceutical Research and Manufacturers of America v. Stolfi, No. 19-1996 (D. Ore. Feb. 16, 2024)]

Tags: Health Plan Policy  •  Prescription Drug Costs

Health Care Plans and Pharmacy Benefit Managers Targeted in Class Action
Mayer Brown Link to more items from this source
Feb. 27, 2024

"The outcome of this suit -- and the extent to which the allegations around the prices paid by participants in the J&J plans are substantiated or explained in discovery -- could indicate that a plan fiduciary's selection of a PBM will be subject to closer scrutiny for compliance with ERISA's fiduciary duties going forward. In light of the litigation, plan sponsors may consider taking additional measures to review and document their processes related to the selection and monitoring of PBMs." [Lewandowski v. Johnson & Johnson, No. 23-0671 (D.N.J. complaint filed Feb. 5, 2024)]

Tags: Fiduciary Duties  •  Health Plan Administration  •  Prescription Drug Costs

Progress Towards PBM Reform: Insights, Political Considerations, and Outlook for 2024-2025
ArentFox Schiff LLP Link to more items from this source
Feb. 27, 2024

"Abusive practices by PBMs received sustained, bipartisan focus in Congress throughout the year, which resulted in the House's passage of the Lower Costs, More Transparency Act (HR 5378) ... On the Senate side, three bills targeting PBM reform await Floor consideration. Meanwhile, the Biden Administration quietly continued its investigation of alleged anticompetitive behavior by the major PBMs."

Tags: Prescription Drug Costs

March 1 Is Deadline for Calendar Year Health Plans to Submit Prescription Drug Coverage Disclosure to CMS
Reid and Riege, P.C. Link to more items from this source
[Guidance Overview]
Feb. 26, 2024

"Disclosure to CMS involves certifying that your plan's prescription drug coverage is at least as good, actuarially speaking, as the standard coverage offered by Medicare. While this may seem difficult to quantify (and it is!), CMS provides a general basis against which you can measure your plan's coverage to determine whether it is creditable."

Tags: Health Plan Administration  •  Prescription Drug Costs

Reporting Prescription Drug and Health Care Spending
McGriff Link to more items from this source
[Guidance Overview]
Feb. 26, 2024

"[A diagram provides] a visual overview of how the RxDC reporting fits into the larger scheme of health care transparency legislation.... Chief among [the] necessary compliance steps is communicating with carriers and TPAs about how they will assist with detailed reporting requirements, as most, if not all, group health plans will not possess the requisite information on their own."

Tags: Health Plan Administration  •  Prescription Drug Costs

Florida Now Regulates PBMs Operating in the State
HUB International Link to more items from this source
[Guidance Overview]
Feb. 23, 2024

"The law directly regulates PBMs and pharmaceutical manufacturers operating in Florida both in terms of overall licensing and certification requirements to conduct business in the state, and in terms of limitations on the contracts a PBM can enter into. The contract rules apply both to PBM contracts with applicable pharmacies and PBM contracts with health plans, such as those offered via employer group health plans."

Tags: Health Plan Administration  •  Prescription Drug Costs

Johnson & Johnson Case Highlights Fiduciary Duty Obligations of Employer-Sponsored Health Plans
Haynes and Boone, LLP Link to more items from this source
Feb. 23, 2024

"[T]he plan administrator of an employer-sponsored, group health plan, particularly one funded by a VEBA, has a fiduciary responsibility to engage in a prudent process when selecting and negotiating with its PBM, which may require an open RFP.... [P]lan fiduciaries should have ongoing processes for monitoring and reviewing plan fees, the prescription drug formulary, and the PBM's performance." [Lewandowski v. Johnson & Johnson, No. 23-0671 (D.N.J. complaint filed Feb. 5, 2024)]

Tags: Fiduciary Duties  •  Health Plan Administration  •  Prescription Drug Costs

Drugmaker Sued for Overpaying for Drugs: Lawsuit Ushers in Expected Wave of Welfare Fiduciary Litigation
Seyfarth Shaw LLP Link to more items from this source
Feb. 22, 2024

"[T]he first complaint was filed in what is expected to be a wave of litigation alleging breach of fiduciary duty in selecting and monitoring welfare plan vendors. While the facts of this particular case may make it somewhat distinguishable from the circumstances involved in most employer-sponsored plans, it does provide early insight into how future litigation may proceed." [Lewandowski v. Johnson & Johnson, No. 23-0671 (D.N.J. complaint filed Feb. 5, 2024)]

Tags: Fiduciary Duties  •  Prescription Drug Costs

Letter from State Attorneys General to Congress in Support of PBM Reform Legislation (PDF)
National Association of Attorneys General Link to more items from this source
[Opinion]
Feb. 22, 2024

"A small number of PBMs hold significant market power and are reaping abundant profits at the expense of the patients, employers, and government payors the PBMs are supposed to help.... While state law can provide the basis for oversight of and lawsuits against PBMs, States often face arguments by PBMs that federal jurisdiction and preemption limit states' authority to regulate PBMs.... Thus, the FTC and Congress must act to ensure fulsome regulation of PBMs nationwide."

Tags: Health Plan Policy  •  Prescription Drug Costs

CMS Releases Revised RxDC Reporting Instructions for 2023
Willis Towers Watson Link to more items from this source
[Guidance Overview]
Feb. 20, 2024

"[CMS] has issued revised instructions and templates for prescription drug data collection (RxDC) reporting for 2023 ... The RxDC reporting deadline for the 2023 reference year is June 1, 2024.... [I]nsurance companies and employer-sponsored group health plans must annually submit information about prescription drugs and healthcare spending to CMS."

Tags: Health Plan Administration  •  Prescription Drug Costs

New York State Revisits PBM Regulation with Scaled-Back Draft Rules
Proskauer Link to more items from this source
[Guidance Overview]
Feb. 20, 2024

"[T]he latest draft regulations seek to restrict a wide range of PBM practices and impose certain administrative requirements, including a more onerous notification requirement in the event of a PBM change in control.... The draft regulations contemplate an enforcement date beginning July 1, 2025.... ERISA/self-insured plans are not expressly excluded from the scope of the draft rules, unlike the Medicare Advantage and Worker's Compensation plans that are excluded."

Tags: Health Plan Administration  •  Local Regulation  •  Prescription Drug Costs

Value-Based Payment Models Can Improve Appropriate and Equitable Use of Prescription Drugs
Health Affairs Forefront Link to more items from this source
Feb. 20, 2024

"Value-based payment (VBP) models focused on care delivery ... provide an avenue for aligning quality measures, gain/risk sharing, and data feedbacks that impact prescribers with broader drug policy reforms to increase the benefit to patients.... [This article provides] an overview of challenges and opportunities for integrating clinician-administered and pharmacy-dispensed drugs into VBP models, highlighting short-term steps that commercial and public payers can take to align health care for both types of drugs."

Tags: Health Plan Design  •  Prescription Drug Costs

Employees Want Weight Loss Drugs
healthnews Link to more items from this source
Feb. 20, 2024

"[A recent] survey reveals that 52% of ... full-time worker respondents want weight loss drugs in their health benefits. Also, one in 16 employees surveyed would be willing to give up vacation days if health benefits featured weight-loss drugs."

Tags: Health Plan Design  •  Prescription Drug Costs

Lawsuit Alleges Fiduciary Breach of Johnson & Johnson Health Plan
OneDigital Link to more items from this source
Feb. 19, 2024

"The plaintiff ... claims that Johnson & Johnson breached its ERISA fiduciary duties ... [costing] the plan and its participants millions of dollars by requiring them to pay more in prescription drug prices and higher premiums, deductibles, copays, and coinsurance. The lawsuit, believed to be the first of its kind, may open up a new pathway in ERISA fiduciary litigation." [Lewandowski v. Johnson & Johnson, No. 23-0671 (D.N.J. complaint filed Feb. 5, 2024)]

Tags: Fiduciary Duties  •  Health Plan Costs  •  Prescription Drug Costs

J&J Drug Pricing Lawsuit Seeks Class Action Status
InsuranceNewsNet.com Link to more items from this source
Feb. 19, 2024

"Allegations included in the 74-page complaint includes the eye-opening example of the Johnson & Johnson benefits manager paying a whopping $10,239.69 for a 90-day supply of a treatment for multiple sclerosis when a generic drug was available at local pharmacies for as little as $28, even before accounting for insurance. That's 'not a typo,' the complaint states." [Lewandowski v. Johnson & Johnson, No. 23-0671 (D.N.J. complaint filed Feb. 5, 2024)]

Tags: Fiduciary Duties  •  Prescription Drug Costs

GLP-1 Drugs: Implications for Employer Health Plans
Willis Towers Watson Link to more items from this source
Feb. 16, 2024

"With several more GLP-1 drugs expected to hit the market by 2026, costs for employer health plans are likely to continue to rise. Employers are considering various coverage and management strategies ... such as prior authorization, limiting coverage to certain individuals and setting higher cost-sharing requirements.... [T]he increasing use of these drugs raises several challenges and questions for employers."

Tags: Prescription Drug Costs

How Will Medicare Negotiate Drug Prices, and What Impact Will It Have?
Health Affairs Forefront Link to more items from this source
Feb. 16, 2024

"[CMS] will be allowed to negotiate the lowest possible maximum fair price (MFP), as long as that price is no higher than what Medicare currently pays and is a specified discount from the average private market price.... The MFP is public ... Manufacturers will be concerned about a low MFP in part because it determines their revenue from Medicare but in addition because it can influence prices from other payers. Since the law does not preclude manufacturer agreements to pay confidential rebates to CMS (discounts off the MFP), they will have an interest in doing so if they can secure a higher MFP in return."

Tags: Medicare  •  Prescription Drug Costs

Knowing Actual Prices Will Help HHS Set the Maximum Fair Price Under the Inflation Reduction Act
Health Affairs Forefront Link to more items from this source
[Opinion]
Feb. 16, 2024

"Having HHS set the maximum fair price (MFP) for Medicare without knowing the actual, post-rebate (net) prices received by a manufacturer from all payers -- including Medicaid, the 340B program, and commercial payers -- creates uncertainty about the magnitude of the actual price cut and complicates understanding the value of a drug relative to therapeutic alternatives."

Tags: Prescription Drug Costs

Medicare Drug Pricing Reforms: One Year Later
KFF Health News Link to more items from this source
Feb. 16, 2024

"The impact of Medicare’s bargaining over drug prices for privately insured Americans remains unclear. States have taken additional steps, such as cutting copays for insulin for the privately insured. However, insurers are increasing premiums in response to their higher costs under the IRA. Monthly premiums on traditional Medicare drug plans jumped to $48 from $40 this year, on average."

Tags: Prescription Drug Costs

New York Proposes Regs Governing Pharmacy Benefit Managers Operating in the State
Department of Financial Services [DFS], New York State Link to more items from this source
[Official Guidance]
Feb. 12, 2024

"The Department is also inviting submissions of comments, data, or documented evidence from the public regarding network adequacy requirements, formulary changes, drug manufacturer rebates, and aberrant quantity/product list restrictions.... The regulations ... [1] Prohibit PBMs from barring any in-network pharmacies from providing mail order or delivery services ... [2] [Require] PBMs to list formularies and pharmacy directories online ... [3] Require PBMs to post a telephone number and email address for consumers[.]"

Tags: Local Regulation  •  Prescription Drug Costs

Proposed Class Action Filed Against Plan Fiduciaries Alleges Prescription Drug Mismanagement
Conner & Winters, LLP Link to more items from this source
Feb. 12, 2024

"[To] help limit employer and plan fiduciary liability ... [1] [G]ood fiduciary hygiene dictates a formal RFP for PBM selection. [2] PBM contract negotiation requires a critical eye for provisions that may unreasonably benefit the PBM (e.g., spread pricing or rebate retention) or otherwise create conflicts of interest (e.g., PBM-owned pharmacies).... [3] [E]mployers and plan fiduciaries should monitor their PBM arrangements with the same detail and scrutiny afforded to any other critical employee benefit plan vendor." [Lewandowski v. Johnson & Johnson, No. 23-0671 (D.N.J. complaint filed Feb. 5, 2024)]

Tags: Fiduciary Duties  •  Health Plan Administration  •  Prescription Drug Costs

Illinois Generic Drug Price Gouging Law Challenged; State Affordability Boards May Draw Similar Fire
Sidley Austin LLP Link to more items from this source
Feb. 12, 2024

"These lawsuits have important implications for the future of price-gouging laws generally and may also have implications for future challenges to prescription drug affordability boards (PDABs), which are becoming a frequent feature of state efforts to regulate drug pricing and threaten to further restrict manufacturers' ability to set prices for their products."

Tags: Local Regulation  •  Prescription Drug Costs

Flipping the Script on the New Excess Health Plan Fee Case Against Johnson and Johnson
Encore Fiduciary Link to more items from this source
[Opinion]
Feb. 8, 2024

"The highly detailed and lengthy complaint represents a groundbreaking attempt to turn plan sponsors into guarantors of the lowest possible fees for every drug or medical service offered by the plan.... If there is any victim of excess fees in health plans, the victim is the plan sponsor. If there is an culprit in health plan excess fees, it is the PBM or other service provider. Consequently, if there is any liability for excess fees, the liability should be borne by health care providers. And any liability damage recoveries should be returned to plan sponsors -- not to plaintiff lawyers or even participants." [Lewandowski v. Johnson & Johnson, No. 23-0671 (D.N.J. complaint filed Feb. 5, 2024)]

Tags: Health Plan Costs  •  Health Plan Policy  •  Prescription Drug Costs

J&J Suit Adds to Growing Wave of Health Plan Litigation Over Costs and Fees
Miller & Chevalier Link to more items from this source
Feb. 8, 2024

"The plaintiff claims defendants should have used their bargaining power to demand better contract terms and prices, should have considered contracting with an alternative 'pass-through' PBM that passes on discounts and rebates to plans, and should have considered carving out their specialty drug program from their broader Express Scripts contract. The complaint lists a host of companies that the plaintiff claims have taken steps to prudently manage their prescription drug benefits, in contrast to J&J's alleged failures to do so. This case is almost certain to spur copycat filings alleging similar violations[.]" [Lewandowski v. Johnson & Johnson, No. 23-0671 (D.N.J. complaint filed Feb. 5, 2024)]

Tags: Fiduciary Duties  •  Prescription Drug Costs

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