The Impact of Premium-Priced Market Entrants on MCO-Run Medicare and Medicaid Plans
The groundbreaking therapies for the Hepatitis C virus (HCV) promise high cure rates for millions of Americans afflicted with chronic infection. But these drugs have also strained the public insurance sector, prompting concern among managed care organizations (MCOs) that the high costs of the new direct-acting antivirals (DAAs) will endanger the financial viability of their Medicaid and Medicare Advantage plans. Daunted by the $84,000 price tag of Gilead’s Sovaldi (sofosbuvir) when the first interferon-free therapy hit the market in 2014, many MCOs have been responding with limitations on coverage, forcing prescribers to navigate long prior authorization requirements. The introduction of new DAAs, including Gilead’s Harvoni (sofosbuvir/ledipasvir) and AbbVie’s Viekira Pak ombitasvir/paritaprevir/ritonavir + dasabuvir), has led to significant price relief through competitive contracting. Nevertheless, HCV drug costs, combined with the magnitude of the demand, continue to pose a financial concern to MCOs, particularly in light of the wave of expensive specialty drugs emerging from the pipeline.
Questions Answered in This Report:
- The entry of new HCV treatments has affected the status of older therapies on Medicare and Medicaid formularies: Which various antiviral regimens do specialists prescribe for patients, according to their genotype and stages of liver disease? Which DAAs do physicians believe have the advantage in terms of various clinical and cost-related attributes? Which of the new DAAs are preferred and non-preferred by Medicare and Medicaid MCOs in 2015, and how does formulary or preferred drug list tiering differ from 2014, before some key newer therapies were launched? What value drivers are important to MCOs when making formulary and reimbursement decisions for HCV drugs?
- Medicaid and Medicare MCOs have seen unprecedented budgetary pressures due to new HCV therapies: To what extent do MCOs face financial pressures for their Medicare Advantage and Medicaid plans as a result of the new wave of costly HCV drugs? Have any of the Medicaid plans experienced operating losses due to reimbursement of HCV drugs? Are their state reimbursements enough to keep pace with costs? What do surveyed MCO pharmacy directors/medical directors (PDs/MDs) and physicians believe should be changed in terms of public policy to address the costs of HCV drugs? How do two interviewed MCO Medicaid representatives characterize the impact of DAAs on their Medicaid plan?
- In reaction to budgetary concerns, Medicaid plans are restricting access to expensive DAAs, which in turn has affected the prescribing behavior of some physicians: What types of restrictions are Medicaid and Medicare MCOs placing on HCV drugs to control costs? How frequently do prescribers encounter payer restrictions when prescribing therapies/regimens for their Medicaid and Medicare patients and what kinds of restrictions do they encounter? How do those restrictions impact their prescribing of these agents? Which agents would physicians prescribe if Medicare and Medicaid access restrictions were not a factor?
Decision Resources Group’s U.S. Physician & Payer Forum report, “Hepatitis C Virus and Government Programs: The Impact of Premium-Priced Market Entrants on MCO-Run Medicare and Medicaid Plans” examines the prescribing and reimbursement environment for the newest DAAs among surveyed physicians and surveyed MCO PDs/MDs. In addition, some key insights and opinions are presented from two MCO Medicaid officials with experience managing these expensive therapies within limited budgets. The report examines the range of therapies that treat HCV, including the traditional pegylated interferons, Roche’s Pegasys (Peg-IFN-α-2a) and Pegasys and Merck’s PegIntron (Peg-IFN-α-2b), as well as ribavirin and the protease inhibitors: Vertex Pharmaceuticals’ Incivek (telaprevir), which was pulled from the market in late 2014, and Merck’s Victrelis (boceprevir), which will be off the market by the end of 2015. However, the report has a particular focus on the most recent DAAs, including Gilead’s Sovaldi and Harvoni, AbbVie’s Viekira Pak, (and Janssen/Medivir’s Olysio (simeprevir).
Markets covered: United States.
Primary research: Online survey of 100 physicians—91 gastroenterologists and 9 hepatologists—and 40 MCOs (15 medical directors and 25 pharmacy directors). Qualitative interviews of two MCO Medicaid officials.
Epidemiology: Hepatitis C virus.
Population segments: Our analysis involves patients covered under Medicare and Medicaid.