This action underscores the complexities surrounding off-label use, clinical compendia, and payer coverage when an FDA-approved indication is rescinded. Despite regulatory withdrawal, patients and providers navigate intricate pathways to maintain access based on existing evidence and payer policies.

FDA’s Decision and Its Rationale

The FDA’s decision to limit the market Immuno Oncology (IO) therapies to PD-L1–positive tumors was based on post-market data indicating minimal benefit for patients with PD-L1–negative tumors. In trials such as KEYNOTE-859 and CheckMate-649, PD-L1–negative subgroups showed only an 8% reduction in death risk with Keytruda and Opdivo, respectively. These findings led the FDA to conclude that the overall survival benefits observed were primarily attributable to patients with PD-L1–positive tumors.

This action also reflects the FDA’s ongoing scrutiny of the accelerated approval pathway, emphasizing the need for confirmatory trials to validate clinical benefits.

Role of Clinical Compendia and Guidelines

An FDA label withdrawal does not automatically remove a drug from clinical compendia or guidelines. Clinical compendia or guidelines may maintain recommendations based on supporting evidence, reclassify the use as off-label, or remove it if evidence is insufficient. For instance, in previous cases, certain breast cancer indications were withdrawn by the FDA, yet compendia continued to recommend use for specific subpopulations. This underscores the importance of clinical judgment and flexibility in evidence-based care, allowing providers to consider individual patient circumstances even when regulatory approvals change.

Payer Coverage Dynamics

Medicare may continue to cover treatments as off-label use, if they are supported by clinical compendia and literature, even after FDA label withdrawal. Commercial insurance plans vary in their responses; some may deny coverage for off-label use, while others may allow continued access based on medical necessity.

A critical concern is whether payers will terminate coverage for patients already undergoing treatment Generally, payers avoid disrupting ongoing therapy unless significant safety issues arise. In such cases, medical necessity reviews or transition plans may be implemented to ensure patient safety and continuity of care.

Patient Impact and Ethical Dilemmas

For the approximately 7% of patients with PD-L1-negative tumors who respond to treatment with Keytruda or Opdivo, the FDA’s decision introduces uncertainty regarding the continuation of therapy. Loss of access due to payer decisions can have negative effects on patient outcomes.

Providers must find the right balance of evidence-based practice with individual patient needs, balancing evidence-based practice with individual patient needs. They must navigate the tension between adhering to updated guidelines and advocating for continued treatment in patients who are benefiting from therapy.

Policy and Market Implications

The FDA’s action highlights the need for greater transparency in how clinical compendia and payers respond to label withdrawals. Manufacturers have an opportunity to proactively support off-label access by providing real-world data and engaging with stakeholders to demonstrate clinical benefits.

This development also prompts consideration of reforms to the accelerated approval lifecycle management to ensure that approvals are based on robust evidence and that withdrawals are communicated effectively to all stakeholders.

The FDA’s decision to limit Keytruda and Opdivo to PD-L1-positive gastric, GEJ, and esophageal cancers underscores the evolving complexity of oncology drug approvals and access. While off-label use remains a critical pathway for patient care, it is unevenly supported across healthcare systems. Ongoing dialogue among the FDA, clinical compendia, payers, and providers is essential to ensure patient-centered care amidst changing evidence landscapes.

How Avalere Health Can Help

Avalere Health continues to monitor the adoption of this FDA decision by compendia and other key stakeholders. Our expertise in compendia, coverage, and access strategy can help manufacturers, payers, and other stakeholders analyze clinical coverage policies and access implications to off-label treatments and help develop strategies to mitigate delays in patient access to treatment. To learn more, connect with us.

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New ICD-10-CM codes were also included in Table 6A of the FY 2026 Hospital Inpatient Prospective Payment System proposed rule.

Background

CMS and the CDC typically hold two Coordination & Maintenance (C&M) Committee meetings per year: one in the spring and one in the fall. CMS moderates discussion on revisions to the International Classification of Diseases, Tenth Revision, Procedure Coding System (ICD-10-PCS) code set, and the CDC moderates discussion on revisions to the ICD-10-CM code set. No decisions are made during C&M Committee meetings, and topics related to reimbursement, insurance, and payer issues are not discussed. Public comments are welcome during the meetings, with opportunities to submit written comments on the proposed code revisions during a designated period following each session.

The March 2025 ICD-10 C&M Committee meeting to discuss FY 2026 ICD-10-PCS codes was not public and the CDC did not participate in the closed session. It is expected that CMS and the CDC will resume a combined public meeting forum in fall 2025.  The newly released ICD-10-CM codes for implementation on October 1, 2025 were approved in 2024.

Details of the FY 2026 Update

Type 2 diabetes mellitus (T2DM) in remission: This topic was originally presented at the March 2024 ICD-10 C&M meeting. Based on public comment, revisions to the proposal were made to address concerns of code selection in addition to diabetic complications, the addition of an Excludes 1 note, and to emphasize the importance of this code to report remission, classified by leading specialty societies as sustaining normal blood glucose levels for three months or more. Code details and tabular modifications were finalized during the September 2024 ICD-10 C&M meeting, resulting in the addition of one new code, E11.A: Type 2 diabetes mellitus without complications in remission.

Hyperoxaluria: This topic was originally presented at the September 2023 ICD-10 C&M meeting. Hyperoxaluria is excess levels of oxalate, a toxic metabolite that cannot be broken down by the body; it can result from a diverse group of disorders. Requestors highlighted the need to accurately differentiate and report the types of hyperoxaluria, which may be due to inherited genetic mutations that lead to different phenotypes of the disease or acquired forms. Code details and tabular modifications were finalized during the March 2024 ICD-10 C&M meeting, resulting in the addition of seven new codes.

Table 1. New Hyperoxaluria ICD-10-CM Codes

Multiple Sclerosis (MS) Phenotypes: This topic was originally presented at the March 2023 ICD-10 C&M meeting. The Food and Drug Administration’s Center for Drug Evaluation and Research requested new ICD-10-CM codes for MS to distinguish between different disease clinical courses, evaluation of disease progression, and long-term prognosis of MS in large population-based epidemiological assessments. Code details and tabular modifications were finalized during the September 2024 ICD-10 C&M meeting, resulting in the addition of eight new codes.

Table 2. New MS ICD-10-CM Codes

Thyroid Eye Disease (TED): This topic appears to have only been discussed once during the March 2024 ICD-10 C&M meeting. The requestor felt that the current ICD-10-CM code for TED in Chapter 4 Endocrine, Nutritional and Metabolic Diseases, E05.00 Thyrotoxicosis with diffuse goiter without thyrotoxic crisis or storm did not specifically identify TED patients, and they aimed to delineate TED from the underlying endocrine disorder. The requestor also cited the inconsistency of TED prevalence data made it challenging to understand the true burden of the disease. Code details and tabular modifications were finalized during that meeting, resulting in the addition of four new codes.

Table 3. New TED ICD-10-CM Codes

Immune Complex-mediated Membranoproliferative Glomerulonephritis (IC-MPGN): This topic appears to have only been discussed once during the September 2024 ICD-10 C&M meeting. Due to advancements in understanding the MPGN pattern etiology and subsequent revision of MPGN classification based on pathogenesis of paraprotein deposits in the disease, the Renal Physicians Association requested new codes to identify (IC-MPGN. Code details and tabular modifications were finalized during that meeting, resulting in the addition of four new codes.

Table 4. New IC-MPGN ICD-10-CM Codes

Widespread Impacts of New Codes

The introduction of new ICD-10-CM codes can have various impacts on different stakeholders across the healthcare system:

• Manufacturers: New codes can influence the demand for certain medical products or devices associated with specific diagnoses. They may need to adjust their access strategies based on changes in coding that reflect emerging health trends or conditions.
• Providers: Healthcare providers must stay updated with new codes to ensure accurate diagnosis and billing practices. This may require additional training and adjustments in electronic health record systems, potentially impacting workflow efficiency and reimbursement processes.
• Health Plans: Insurers may need to revise coverage policies and reimbursement rates based on new codes, which could affect cost management strategies and actuarial assessments. They must ensure their systems are updated to process claims accurately under the revised coding structure.
• Patients: Changes in ICD-10-CM codes can influence patients’ access to care if they impact insurers’ coverage decisions or providers’ treatment protocols. Patients might experience changes in out-of-pocket costs depending on how new codes affect insurance coverage.
• State/Federal Policymakers: Policymakers may use updated coding data for public health monitoring and resource allocation decisions. New codes can provide insights into emerging health issues, guiding policy development and funding priorities.

Partner With Us

Avalere Health continuously monitors and tracks all coding decisions, frequently attending public CMS and CDC meetings to gather insights and real-time information regarding the current and future coding landscape.. Stakeholders should remain vigilant about these developments to adapt effectively and leverage opportunities for improved patient outcomes and operational efficiencies. To learn more about how Avalere Health can help, connect with us.

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MFP Effectuation Competitor Negotiation Direct Negotiation Part D Redesign Inflation Penalties NIH/FDA Cuts Strategic Planning Investment Decision Reconciliation Impacts on Environment 340B Reform PBM Reform DTC Access Strategy MFN Price Setting PDABs

Ripple Impacts of Policies Disrupting Traditional Environmental Considerations

Tap a row below for more information

MFN & Price Regulation

Fiduciary Pressures

IRA

DTC Access Strategy

MFN Price Setting

PDABs

Investment Decision

Strategic Planning

Reconciliation Impacts on Enrollment

340B Reform

PBM Reform

NIH/FDA Cuts

MFP Evaluation

Competitor Negotiation

Direct negotiation

Part D Redesign

Inflation Penalties

ACIP: Advisory Committee on Immunization Practices; AMP: Average Manufacturer Price; DTC: Direct-to-Consumer; FDA: Food and Drug Administration; FFS: Fee-for-Service; HHS: US Department of Health and Human Services; ICR: Information Collection Request; MFP: Maximum Fair Price; NIH: National Institutes of Health; PBM: Pharmacy Benefit Manager; PDAB: Prescription Drug Affordability Board; R&D: Research & Development; ROA: Route of Administration; RWD&E: Real-World Data and Evidence; UPL: Upper Price Limit

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Background

ACIP is a chartered federal advisory committee responsible for making recommendations on the safe and effective use of vaccines. The Committee makes these recommendations to the Centers for Disease Control and Prevention (CDC), and if adopted by the CDC Director and published in the respective Immunization Schedule, these recommendations enable Americans to access vaccines at no cost across most insurance programs.

The ACIP is formally chartered under the Federal Advisory Committee Act (FACA, 1972), which ensures that federal advisory committees operate with open and transparent procedures, maintain public records of proceedings and recommendations to facilitate transparency and objectivity, and hold regular and publicly announced meetings. The committee meets at least three times per year, in February, June, and October. Three weeks in advance of the scheduled June meeting, Secretary of Health and Human Services Robert F. Kennedy Jr announced  that he would remove all 17 sitting members of the committee, noting that 13 members were appointed in 2024 under the Biden administration and “a clean sweep [was] necessary to reestablish public confidence in vaccine science.” Two days later, Sec. Kennedy announced the names of eight new voting members on the social media platform, X (formerly Twitter), one of whom withdrew before the start of the June meeting, citing a review of his financial holdings and leaving the committee with seven sitting members.

ACIP Is the Bedrock of the US Vaccine Policy and Access System

In the sixty years since its establishment, the ACIP has emerged as the cornerstone of US vaccine policy and access systems. Using a rigorous review process that assesses vaccine product safety, efficacy, cost-effectiveness, and programmatic fit, ACIP issues evidence-based recommendations on immunization use, and its recommendations form the foundation for pediatric and adult immunization schedules. These schedules not only guide clinical practice but also trigger first-dollar coverage across most insurance programs.

Federal legislation has incrementally grown to require first-dollar coverage of ACIP-recommended vaccines for more insurance groups (Figure 1). This began with the Omnibus Budget Reconciliation Act in 1993, which tied inclusion in the Vaccines for Children Program to an ACIP resolution. In 2010, the Affordable Care Act requires commercial payers to cover all immunizations that have “in effect a recommendation” from the ACIP and further requires Medicaid expansion programs to cover ACIP-recommended products. These two pieces of legislation tied first-dollar coverage of vaccines for over two-thirds of the American population to ACIP recommendations. The remaining gaps in patient cost-sharing requirements were closed in 2022 with the passage of the Inflation Reduction Act, which eliminated all cost sharing for adult vaccines recommended by ACIP under Medicare Part D, and mandated that traditional Medicaid and CHIP plans cover all approved vaccines recommended by ACIP along with their administration without cost sharing. For more detailed information on US vaccine coverage requirements, see Avalere’s guidebook here.

Figure 1: Evolution of Immunization Coverage Requirements

RSV: Respiratory Syncytial Virus: VFC: Vaccines for Children

In addition to the direct impact ACIP recommendations have on insurance coverage and patient access, the Committee’s decisions also have an indirect impact on state immunization policies, provider counseling behavior, and quality reporting programs (see Figure 2).

State public health departments often rely on ACIP recommendations to drive public health outreach campaigns as well as to shape school and occupational vaccination requirements. ACIP guidance is further embedded in state immunization information systems, which track vaccine administration, and may also be configured for integration with provider electronic health records using the CDC’s clinical decision support for immunization tools.

ACIP recommendations also impact provider scope of practice and quality measurement. State legislators or boards of pharmacy often adapt local pharmacist and pharmacy technician authority to administer vaccination to reflect ACIP recommendations. Quality reporting programs (e.g., childhood immunization status and adult immunization status measures) incorporate adherence to ACIP schedules as performance indicators for providers and health plans.

In essence, ACIP recommendations shape which products are offered in US immunization programs, which patient populations can receive them at no cost, and how immunizations are tracked to assess risk of vaccine-preventable disease outbreaks.

Figure 2: Direct and Indirect Impacts of ACIP Recommendations

VICP: Vaccine Injury Compensation Program

The Committee Is Poised to Revisit the Pediatric Immunization Schedule

In addition to the seven new voting members who were introduced at this week’s meeting, there was also an announcement of two new ACIP work groups, which will add to the extant product-specific work groups and the traditional work group focused on reviewing and updating the child/adolescent and adult immunization schedules on an annual basis.

The first new work group will examine the cumulative effect of the childhood vaccine schedule. The second new work group will review products which have not been subject to review in more than seven years – an extant requirement per ACIP Policies and Procedures which has not been consistently observed. Combined, these work groups signal the reformulated committee’s intention to review previously-established schedules and potentially revise them following new evaluations.

The June meeting initiated this process with discussions on the use of thimerosal-containing influenza vaccines and the use of the measles, mumps, rubella, and varicella (MMRV) vaccine in children. After a presentation on the risks associated with thimerosal the committee voted five-to-one (one abstention) to eliminate the use of thimerosal-containing influenza vaccines. This discussion diverged from the ACIP’s traditional process, which has historically been guided by a structured review of the evidence across several clinical and programmatic domains using a framework called the ‘Evidence to Recommendation’ (EtR) framework.

Following the thimerosal discussion, the new chair, Dr. Martin Kulldorff, presented on the risk of febrile seizures associated with the MMRV vaccine and introduced recommendation language to eliminate MMRV as an option for vaccination in children under 47 months of age. This recommendation will be voted on at a subsequent meeting. It is unclear whether a dedicated WG will be established to support this review or whether it will fall under the remit of one of the newly established work groups.

Neither vote will significantly impact current immunization practices given the low utilization of both thimerosal-containing influenza vaccines and MMRV vaccines in children under four years of age. Still, these discussions may foreshadow additional re-evaluation of other recommendations, likely beginning with the pediatric immunization schedule which has been a major focus area for CDC and HHS leadership.

Real-world Impacts of New or Revised Recommendations Remain Uncertain

ACIP recommendations typically fall into one of three categories: routine recommendations, which are recommended for standard use in a broad population; risk-based recommendations, which are tailored for specific populations that may be at higher risk due to age, medical conditions, or occupation; and shared clinical decision making (SCDM) recommendations, which are designed for situations where a vaccine may benefit some but not all individuals in a given cohort. In the case of SCDM recommendations, the decision to vaccinate should be made jointly between the patient and the provider. All three recommendation types determine coverage requirements across insurance programs.

For patient populations no longer included in the scope of a given ACIP recommendation, payers may continue to voluntarily provide coverage and would be free to apply utilization management requirements—apractice that is not permitted for ACIP-recommended immunizations. For patient populations that are not covered by the scope of an ACIP recommendation, payers may rely on internal product review committees to determine coverage or they may turn to relevant medical societies to inform their coverage protocols. Additionally, while ACIP recommendations establish the minimum coverage requirement for state Medicaid programs, they are free to offer broader coverage.  As payer coverage policies evolve, vaccine access may vary across geographies, patient populations, and insurance programs. .

Conclusion

The current climate surrounding the ACIP is marked by considerable uncertainty, and further developments are likely to occur ahead of the next meeting in the fall. Further agency changes, such as the appointment and Senate confirmation of a CDC Director, could also shift the activities and objectives of the ACIP and the CDC staff who support the ACIP’s research efforts.

Further, given early withdrawals in participation from newly nominated members, additional membership could be solicited and approved in advance of other 2025 meetings.  Additionally, several recommendations from the April meeting remain unadopted and recommendations for other seasonally administered vaccines, like COVID-19, have not yet been voted on, raising questions about whether those recommendations may be revisited in future meetings. In the interim, payers, providers, and industry stakeholders will be monitoring the situation closely for any shifts in evidentiary standards or substantive revisions of existing recommendations.

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In the ruling, the Supreme Court states “The Executive Branch under both President Trump and President Biden has argued that the Preventive Services Task Force members are inferior officers and therefore may be appointed by the Secretary of HHS. We agree. The Task Force members are removable at will by the Secretary of HHS, and their recommendations are reviewable by the Secretary before they take effect.” 

Background on USPSTF 

USPSTF is an independent panel of 16 experts appointed by the HHS Secretary that voluntarily provide recommendations on preventive services for adults and children provided in or referred from the primary care setting. According to the USPSTF procedure manual, the Task Force evaluates specific interventions and issues recommendation with a letter grade (A, B, C, D, or Insufficient [I] statement) based on the strength of existing evidence and the net benefits of a preventive service. Under the Affordable Care Act (ACA), services that receive a USPSTF Grade A or Grade B must be covered by Medicare and third-party insurance carriers without member cost sharing. 

Legal Challenges to Preventive Services Coverage Mandate 

In September 2022, the US District Court for the Northern District of Texas issued a ruling in Braidwood Management Inc. vs. Becerra, a case which challenged the legality of the ACA’s preventive services coverage mandate under the US Constitution and the Religious Freedom Restoration Act. The court ruled that health plans are not required to cover services recommended by the USPSTF because its panel members are not properly appointed under the Constitution’s Appointments Clause. Following the decision, the Biden administration appealed the court’s ruling to the US Court of Appeals for the Fifth Circuit, 

In June 2024, the court of appeals issued a decision reversing the lower court’s decision to vacate all agency actions to enforce preventive care coverage mandates. However, the appellate ruling agreed with the lower court’s ruling that the USPSTF panel had not been validly appointed under the Appointments Clause.  

The case was appealed to the Supreme Court and on April 21, 2025, justices heard oral arguments in Kennedy vs. Braidwood Management Inc.  

Why the Ruling Matters 

The ruling preserves the ACA requirement that commercial and employer health plans cover USPSTF Grade A or Grade B recommendations without cost-sharing. The decision averts an immediate disruption to no-cost coverage for over fifty types of screenings, prevention medication, and counseling recommendations. This ruling maintains frictionless access to preventive screening without introducing additional cost sharing for patients. Importantly, the Supreme Court’s reasoning also reinforces the legal foundation for other HHS-appointed expert bodies like the Advisory Committee on Immunization Practices, which similarly issue coverage-influencing recommendations without Senate confirmation—an increasingly important precedent as public attention grows around new member appointments, transparency, and the scope of advisory authority.  

Next Steps 

Avalere Health’s cross functional team is uniquely capable of supporting stakeholders navigating the evolving landscape of USPSTF recommendations and submission processes. Understanding the access landscape for screening requires a partner with strategic foresight and deep expertise in evidence, policy, and quality frameworks. Leveraging expertise in evidence generation and planning, market strategy, and policy shaping, Avalere Health can provide strategic recommendations that meet individual client needs. To learn more about how Avalere Health can assist you connect with us. 

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The U.S. Preventive Services Task Force (USPSTF) is an independent panel of 16 experts appointed by the Secretary of Health and Human Services (HHS) that voluntarily provide recommendations on preventive services for adults and children provided in or referred from the primary care setting. According to the USPSTF procedure manual, the Task Force evaluates specific interventions and issues recommendation with a letter grade (A, B, C, D, or Insufficient [I] statement) based on the strength of existing evidence and the net benefits of a preventive service. Under the Affordable Care Act (ACA), services that receive a USPSTF Grade A or Grade B must be covered by Medicare and third-party insurance carriers without member cost sharing.

The Agency for Healthcare Research and Quality (AHRQ) convenes USPSTF, oversees evidence reviews, and disseminates its recommendations. AHRQ contracts Evidence-based Practice Centers (EPCs) to develop evidence reviews. EPCs develop the analytic framework and conduct the systematic evidence review that informs the USPSTF recommendation. Once a topic is prioritized, the topic team includes USPSTF members (including one USPSTF chair or vice chair), AHRQ staff members (including at least one AHRQ medical officer), and evidence review team members (including a lead investigator from the EPCs).

Proposed Budget Cuts and Stakeholder Response

In a letter sent to HHS Secretary Robert F. Kennedy Jr. in April 2025, 45 former USPSTF chairs, members, and scientific directors expressed grave concerns about the Trump administration’s FY 2026 budget proposal.  The proposal includes merging the AHRQ into a new Office of Strategy and cutting AHRQ’s budget by $129 million.

This reorganization under HHS risks undermining the USPSTF’s independence and its capacity to conduct rigorous, conflict-of-interest free reviews, which to date have been the benchmark for USPSTF preventive care recommendations. Additionally, because Task Force members serve on a voluntary basis, AHRQ—through its “Effective Healthcare Program”—provides essential resource support by overseeing and managing the EPCs that conduct the systematic evidence reviews informing USPSTF recommendations.

Signers warned that because the USPSTF relies heavily on AHRQ for scientific, administrative, and dissemination support, the proposed reorganization and workforce reductions could seriously jeopardize the Task Force’s ability to produce and distribute evidence-based preventive care recommendations—guidance that mandates insurance coverage without patient cost-sharing and contributes to the prevention of chronic disease through primary care.

A JAMA viewpoint article by former USPSTF Chair Alex Krist and colleagues echoed these concerns, emphasizing that AHRQ is the only agency authorized to advance primary care —despite receiving only a small portion of national health spending—and that the cuts threaten to undermine the administration’s own health promotion goals.

Additionally, the USPSTF faces potential legal challenges in the Supreme Court (see Kennedy vs. Braidwood Management Inc. ), related to its authority under the ACA to set coverage requirements for preventive services under the US Constitution and the Religious Freedom Restoration Act.

Meanwhile, the Task Force continues to develop new recommendations on emerging health issues, currently working on recommendations for topics such as tobacco cessation, vision screening in children, and others. Additionally, USPSTF has announced its intention to provide recommendations on obesity management drugs such as semaglutide and tirzepatide, underscoring its ongoing critical role in shaping US preventive care policy.

Next Steps

Avalere Health’s cross functional team is uniquely capable of supporting stakeholders navigating the evolving landscape of USPSTF recommendations and submission processes. Understanding the access landscape for screening requires a partner with strategic foresight and deep expertise in evidence, policy, and quality frameworks. Leveraging expertise in evidence generation and planning, market strategy, and policy shaping, Avalere Health can provide strategic recommendations that meet individual client needs. To learn more about how Avalere Health can assist you connect with us.

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Avalere Health will focus its pro bono services for the Arthritis Foundation on disease prevalence, progression, and treatment impacts for women as they age. Despite existing research, sex-specific analysis remains limited.

“Through this collaboration, the Arthritis Foundation will be able to identify the critical health challenges affecting women aged 40 and older, particularly those within the Medicare population, with a focus on rheumatoid arthritis and osteoarthritis,” said Laura Housman, Ph.D., Practice Director at Avalere Health.

Avalere Health Advisory’s Pro Bono Grant Initiative is a new program created to offer free data-driven analyses, research, or consulting services to nonprofit, 501(c)(3) organizations.

“There are healthcare organizations that are facing unique challenges in today’s current funding environment,” said Dr. Housman. “This Initiative is our way of ensuring nonprofit groups continue to deliver their services that could have been delayed, cut, or shelved because of limited resources.” Avalere Health’s pro-bono committee is now taking applications for Fall 2025 and the deadline to submit is Friday, August 29. Applications will be selected based on four evaluation criteria:

• Impact on Underrepresented Populations: Addressing an underrepresented population, location, or disease state.
• Public Reach: Opportunity to increase impact or adoption through highly public or significant work.
• Promotion of Health Equity: Potential to advance health equity, improve access to healthcare, or enhance health outcomes for individuals.
• Relevance to Avalere Health’s Mission: Alignment with Avalere Health’s efforts to reach EVERY PATIENT POSSIBLE.

Recipients of the Avalere Health Advisory’s Pro Bono Grant Initiative will receive services based on their specific needs. The company will not undertake any lobbying activities, including any project that will require Avalere Health or any of its employees to register as a “Lobbyist” under the federal Lobbying Disclosure Act or similar state laws. Any public-facing deliverables will require Avalere Health to retain editorial control and will not include specific recommendations, advocacy, or endorsement of any specific policy position. All deliverables and research will maintain objectivity and will be neutral in tone.

To apply for the Avalere Health Advisory Pro Bono Initiative, please download the application form here:

2025 Application_Avalere Health Advisory Pro Bono Initiative

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While clinical outcomes are a cornerstone of quality, the definition of quality in healthcare encompasses far more about the structures, processes, and experience of care beyond clinical outcomes alone. The Centers for Medicare and Medicaid Services (CMS) Innovation Center defines quality of care as “The degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge,” adding that “high quality care means that providers follow current best medical evidence and prioritize decisions that are consistent with peoples’ values, needs, and preferences.”

This has been codified through the Agency for Healthcare Research & Quality’s use of the Institute of Medicine quality domains of safety, timeliness, equity, efficiency, effectiveness, and patient-centeredness. More recently the Institute for Healthcare Improvement has expanded its triple aim for improvement to a quintuple aim: the goal of elevating the importance of reducing clinician burnout and advancing health equity has been added to the original aims of improved health of populations, improved care experience, and reduced cost of care.

This broader definition of quality takes center stage in the shift from fee-for-service to value-based payment, reshaping how providers are paid, performance is measured, and innovation is rewarded. Quality, and particularly the measurement of quality, is central to this transition, ensuring that there is a dual, equal focus on both cost reduction and improvement in care quality in the definition and payment for “value.”

Quality measures are tools that quantify quality: how often are evidence-based structures and processes adhered to in the care delivery process?  What are the rates of desired outcomes? Are there disparities in outcomes among different sociodemographic groups? Measures are defined in great detail to ensure that the concept being measured and the measure results can be used consistently and across populations to understand the quality concept of interest, identify gaps in performance, the causes of those gaps, and improvement strategies that can lead to better measure performance.

Quality measure performance results incentivize improvement by tying payment or recognition to high-value care delivery. Both public and private payers use quality benchmarks across programs like the Hospital Value-based Purchasing Program, Medicare Advantage Star Ratings, and commercial accountable care models to influence provider and health system behavior in ways that improve measure performance. For example, results from the hospital quality programs are published on the CMS Care Compare website for the public and other payers to see, informing patients’ hospital choice or payers’ choice of which hospitals to include in network.

Inclusion of measures in high-impact programs like Medicare Advantage Star Ratings, which can offer millions of dollars in quality performance bonus payments, increases visibility and accountability at all levels of care delivery. This creates a compelling reason for providers, facilities, and payers to align expectations and implement evidence-based improvement strategies.

The influence of quality measures and their use in value-based care programs strongly impacts both clinical behavior and system-level decisions in all aspects of care, driving which aspects of quality are prioritized for improvement and the level of effort allocated to improvement strategies. This could manifest as how providers and health systems evaluate care pathways, build standard order sets, and select which drugs, devices, and diagnostics they prescribe. Accounting for quality measures may also impact a range of tactics implemented, like alerts in electronic health record systems reminding providers to order recommended preventive screenings, implementing shared decision-making models at the point of care, or weighing a drug or diagnostic’s impact on quality when making system-level formulary and purchasing decisions.

Why Quality Matters for Manufacturers

For life sciences manufacturers, this environment creates exposure to both risk and opportunity. The inclusion— or absence— of specific quality measures can significantly affect uptake, access, and preferred formulary placement. In some cases, measures become de facto coverage criteria.  For example, the inclusion of statin use in persons with diabetes as a quality measure in Star Ratings has driven broad adoption of statins in this population, which in turn impacts prescribing behavior, plan performance strategies, and formulary design to ensure access to guideline-directed therapy. Moreover, manufacturers are increasingly expected to support quality improvement initiatives or generate evidence aligned with high-profile measures to demonstrate value beyond clinical trial data.

Understanding and aligning with quality priorities also enables manufacturers to map their product’s value proposition to the needs of their target clinicians, health systems, and payers.  This is critical even in the absence of measures that are directly relevant to the product of interest. Knowing that a health system is engaged in an accountable care model, for example,  should prompt evidence generation and value messaging for how the product can support goals of reducing hospital readmission rates or total cost of care.

Developing a quality strategy can help assess how well a product aligns with prioritized domains such as cardiometabolic health, patient-centered outcomes, or equity. Therapeutics that align with existing quality programs and measures or that fill clear gaps are more likely to be adopted and rewarded in VBC arrangements. Conversely, products that fail to map to prioritized quality domains (e.g., prevention of complications, patient-reported outcomes, patient-centered care) risk marginalization even with strong clinical data. Building a quality strategy is essential for understanding customers and the broader environment in which innovative treatments, diagnostics, and technology are introduced. Linking existing and pipeline offerings to key quality priorities underscores the potential and realized benefits for patients, payers, and the healthcare ecosystem writ large.

Entities like CMS, the National Committee for Quality Assurance (NCQA), and Partnership for Quality Measurement are actively shaping the next generation of quality programs and measures, including condition-specific outcomes, digital measures, and patient-centered stratifications. Manufacturers who engage early by supporting measure development, piloting value-based contracting, or partnering on care transformation initiatives can help ensure their innovations are positioned for future success.

Recent Developments

Recent CMS efforts to refine the Medicare Quality Payment Program and Medicare Advantage Star Ratings, as well as Food and Drug Administration-CMS collaborations on real-world evidence and outcomes-based contracting, have highlighted the growing convergence of regulatory, clinical, and quality policy domains. CMS and particularly the CMS Innovation Center are actively updating their quality strategies to reflect the agency’s current priorities. Additionally, organizations like NCQA and the Core Quality Measures Collaborative are inviting public comment on new measures relevant to therapeutics in areas like oncology, obesity, and chronic disease prevention with a greater emphasis on patient-reported outcome measures.

Next Steps
Avalere Health brings deep expertise across evidence generation, quality strategy, and market access to help manufacturers navigate this complex terrain. We support clients in identifying developing pre- and post-launch quality strategies, supporting measure development, and aligning product strategy with payer and provider incentives. Whether informing pipeline decisions or shaping policy conversations, Avalere Health is uniquely positioned to help manufacturers succeed in a value-based care world. To learn more, connect with us.

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Current guidance stipulates that CMS uses FDA-approved labels, clinical guidelines, medical literature, and drug compendia, among other factors, to identify appropriate therapeutic alternatives for each indication for every negotiated drug. The agency also reviews input from manufacturers, patients, and providers. However, it is unclear what factors are prioritized in such decisions and to what extent this input influences the outcome.  

Under the current administration, there has been renewed focus on Most-Favored Nation (MFN) pricing as a strategy to control drug costs by aligning US prices more closely with those paid in other high-income countries. Any such policy shift would also indirectly import ex-US HTA decisions and priorities into the U.S. system—even though they reflect different clinical practices, cost structures, and policy goals that may not align with U.S. healthcare needs. 

Avalere Health analyzed the extent to which comparator selection varies between peer health systems with standing HTA procedures to offer context for stakeholders preparing to engage with CMS on Medicare Negotiations or understand the potential impact of ex-US technology assessments MFN-influenced decisions.  

Analysis Approach 

Avalere Health assessed the comparators used across four countries and their corresponding HTA bodies for the same set of drugs. We evaluated Canada’s Agency for Drugs and Technologies in Health (CADTH), United Kingdom’s National Institute for Health and Care Excellence (NICE), France’s Haute Autorité de Santé (HAS), and Germany’s Gemeinsamer Bundesausschuss (G-BA). The drugs for this analysis have been selected for Medicare negotiation and cover a variety of therapeutic areas (oncology, hematology, diabetes, and respiratory). In total, the analysis assessed five products with six indications across four therapeutic areas.  

Key Findings 

First, Avalere Health compared the approved US indications for the analyzed products to those reviewed by each HTA. The results show that of the six total indications that were considered in the analysis, only one had the same set of indications reviewed across all HTA bodies, suggesting that the reimbursed price in those markets for a given product may not reflect the totality of all licensed indications in some markets (Figure 1).   

Figure 1. Selection of Product Indications for HTA Review 

COPD: Chronic obstructive pulmonary disease; FVC: Forced vital capacity 

Note. The red x indicates that the indication for the product was not considered, and therefore the HTA’s value assessment did not consider the indication. The text “No Formal Review” indicates that the HTA did not conduct a value assessment on the product. 

Then, Avalere Health compared the therapeutic alternatives that each HTA used as comparators in the evaluations. The results show that the selection of comparators varies widely across different countries’ assessments. Of the five medicines assessed across four disease areas, different comparators were used across all HTAs, in each scenario resulting in different prices. This is particularly complicated in cancer technology assessments, where indications are highly nuanced and approvals are focused on specific patient subgroups, tumor histology, biomarkers or line of therapy.  

For the oncology drug that Avalere Health reviewed in this analysis, HTAs across countries assessed chose highly variable comparators (Figure 2). 

Figure 2. Comparators Used Across HTAs For Commonly Used Oncolytic

Note. Green checkmark indicates that the class or treatment was included in the country’s HTA review. Red x indicates that the class or product was not included in the country’s HTA review. Classes with both indicate that while the class overall was not included as a comparator, products within the class were included. 

Conclusion

Comparator selection is a key driver of value assessment outcomes impacting coverage, price point, level of unmet need and other key patient access criteria. The choice of comparators fundamentally shapes how the clinical benefit of the assessed intervention is perceived, and an inappropriate or outdated comparator can misrepresent a product’s real-world value, thereby skewing value assessment results and impacting coverage and reimbursement decisions. This is especially important for complicated therapeutic areas like oncology as comparators can directly impact the evidence gathered and recommendations made to cover a product.

As CMS and manufacturers enter the third year of the Medicare Drug Price Negotiation program–which will include physician-administered drugs with complex and idiosyncratic clinical pathways–stakeholders must carefully consider how therapeutic alternatives are being selected and the impact of that decision on negotiation outcomes. Notably, CMS’s guidance for negotiations grants CMS the latitude to decide on therapeutic alternatives for use in the comparative effectiveness review, which can have a direct and meaningful impact on the initial offer in the price negotiation. Stakeholders should consider how different scenarios for comparators could change negotiations for products in the absence of more robust guidance, and identify opportunities to ensure that clinically appropriate comparators are used to optimize assessment credibility.

The Medicare Drug Price Negotiation program will continue to have wide-reaching impacts on drug manufacturers. Connect with us to learn more about how Avalere’s multidisciplinary team can help manufacturers understand CMS’s process for identifying therapeutic alternatives for negotiated drugs.

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Chronic care management (CCM) is considered an essential primary care service aimed at improving patient care and health outcomes. CCM, which can be provided by providers or their clinical staff, encompasses a range of non-patient-facing services, such as facilitating preventive care, supporting health goals, managing care transitions, and sharing patient health information within and across care teams. Evidence suggests that CCM in Medicare can improve care: a federally funded study found that CCM improves clinician efficiency, patient satisfaction, therapy adherence, and reduces hospitalizations and emergency department (ED) visits, resulting in savings of $74 per member per month, or $888 annually per beneficiary. 

Relevant Services: The Centers for Medicare and Medicaid Services (CMS) pays for CCM services for eligible patients under six relevant codes: 99437, 99439, 99487, 99489, 99490, and 99491 (Appendix). CMS has also introduced several other code families to support similar, and sometimes mutually exclusive, coordinated care services, including transitional care management, advanced primary care management, principal care management, and CCM specifically for pain management.

Eligible Patients: To qualify for CCM, patients must have at least two chronic conditions expected to either persist for at least 12 months or pose a significant risk of death, acute exacerbation, decompensation, or functional decline. Examples of qualifying chronic conditions include diabetes, hypertension, chronic kidney disease, heart failure, cancer, arthritis, and Alzheimer’s disease. In addition to the number of underlying conditions, CMS suggests that practitioners also consider the number of medications, repeat admissions, and past ED visits when identifying patients who are eligible for CCM. 

Analysis 

Amid growing interest in CCM and incentives for its use, Avalere Health analyzed CCM utilization trends in Medicare claims from 2019 to 2023. To understand the extent of utilization growth, we determined the number of Medicare beneficiaries who received CCM services, the total number of CCM claims submitted, and the average number of claims per beneficiary. Because CCM is intended for beneficiaries with two or more chronic conditions, we also analyzed the distribution of chronic conditions among those who received CCM services. Further methodology information is included in the Appendix.  

Results 

CCM Uptake: Two-thirds of Medicare beneficiaries have two or more chronic conditions and many are likely eligible to receive CCM services. However, only a fraction of eligible beneficiaries have been enrolled in a CCM program. At least one study suggested that initial uptake was low, with less than 4% of eligible enrollees receiving CCM care in 2019.  

Recognizing the potential of CCM to enhance both patient outcomes and cost efficiency, CMS has taken meaningful steps to expand the program by introducing new CPT codes for additional service time and raising reimbursement rates by increasing the underlying work relative value units (RVUs) in 2022 (Figure 1). The largest increases (81% to 100%) were observed in the complex CCM codes.  

Figure 1. Updates to Work RVUs, 2022

QHP: Qualified Healthcare Professional. Note: CPT code 99437 was new in 2022. 

As a result of policy changes intended to more accurately value these services, utilization of CCM codes has increased steadily over the past five years, seeing an average annual growth rate of 7.4% from 2019 to 2023 (Table 1). The largest year-over-year increase was observed after the code set was revalued: the number of Medicare beneficiaries receiving any CCM service increased by 23.4% between 2022 and 2023, when nearly 1.3 million Medicare beneficiaries received CCM. 

Table 1. Trends in CCM Utilization, 2019-2023  

Source: Medicare 100% fee-for-service data 

While implementation of CCM has led to increased utilization, our analysis found that—despite growth in beneficiary participation and total claims—opportunities remain to further expand the uptake of CCM services. 

Gap Analysis: CCM may be underutilized among eligible beneficiaries, but not all current recipients of CCM services appear to meet the eligibility requirement of having two or more chronic conditions. According to Avalere Health’s analysis, in 2023 only 77% of billed CCM services were for patients with two or more chronic conditions recorded on the claim; in contrast, 18% of beneficiaries had only one chronic condition recorded, and 5% had none (Figure 2). Given that the portion of claims lacking sufficient documentation increased as CCM utilization increased, these anomalies raise questions about coding accuracy and the consistency of eligibility assessments. 

Figure 2: CCM Claims by Number of Chronic Conditions Reported, 2019–2023 

Drivers of Low CCM Uptake 

While utilization of CCM services has increased over time, the breadth and consistency of their uptake remains uneven. This limited adoption is likely influenced by a combination of patient- and provider-level factors. 

Table 2. Barriers to Appropriate CCM Uptake  

Some providers have suggested that CMS could play a greater role in educating beneficiaries about CCM’s value to help facilitate consent and engagement. Our claims analysis suggests two key areas for improvement among providers: proper documentation of diagnoses and improved consistency of CCM utilization. We did not assess the clinical appropriateness of the services billed. 

Opportunities for Improvement 

While the underlying cause of the discrepancy in diagnosis coding on CCM claims is unknown, it could reflect a lack of financial or operational incentives for precise diagnosis coding within traditional Medicare. Though providers serving both traditional Medicare and Medicare Advantage (MA) beneficiaries can deliver CCM services, the risk-adjusted payments in MA reward create incentives to report diagnoses completely and accurately. In contrast, traditional Medicare reimburses providers on a fee-for-service basis with no diagnosis-based adjustment, potentially contributing to less accurate coding practices. 

Additionally, the Medicare claims data show evidence of inconsistent service provision. In 2023, 6.5 million CCM claims were submitted; this is an average of 5.1 per beneficiary and a slight increase from the average of 4.9 claims per beneficiary in 2019. Since providers can bill monthly for CCM services and CMS expects that the full scope of services be delivered each month (unless not medically necessary), this lower-than-expected frequency suggests barriers to consistent care coordination that have persisted over time. 

Looking Ahead 

Further exploration is needed to fully understand the patterns of CCM uptake and service provision. Insights from this analysis can inform strategies that support broader participation in CCM programs to improve patient care and contribute to Medicare cost savings.  

To learn more about CCM and other trends in primary care, connect with us. 

Appendix: CCM Code Descriptions and Methodology 

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Background

Over the last several decades, the United States healthcare landscape has seen a significant shift of formerly independent physician practices joining health systems, as well as mergers and acquisitions between health systems. While similar healthcare consolidation trends have been present in Chicago, Illinois, a unique confluence of regional factors, including the presence of several large health systems and a dominant commercial payer, has disproportionately impacted the Chicago market. These factors, as demonstrated in this paper, have resulted in high healthcare costs for the region’s employers and beneficiaries and underutilization of community-based physicians, who represent more cost-effective and accessible care. At the same time, physician reimbursements from Medicare have declined 33% from 2001 to 2025 after adjusting for inflation in practice costs—further exacerbating the challenges physicians face to remain independent.

This analysis uses multiple sources of claims data to derive market-level learnings—including analyses of (1) total Medicare fee-for-service (FFS) expenditures and quality metrics by specialty, as well as (2) site-of-care differentials for the most common and expensive services in the commercial market—to detail the impact of health system consolidation in the Chicago healthcare market on employers and its implications for provider contracting and benefit design.

Key findings

Chicago market

• The significant number of large health systems in the Chicago metropolitan area has contributed to a higher proportion of specialty physicians affiliated with hospital systems than nationally (58% in Chicago versus 45% nationally, across five specialties analyzed). The greatest difference is in gastroenterology (GI): 65% of specialists in Chicago are affiliated with hospitals, compared to 32% of specialists nationwide.
• On the payer side, the confluence of Health Care Service Corporation (HCSC)’s market dominance – controlling nearly 75% of Illinois’ individual market and 80% of the group market – and the predominance of large, self-insured employers likely shape market dynamics in Chicago. However, the impact of these dynamics warrants further study, as this analysis focuses on providers.

Medicare results

• The 2023 single-specialty analysis shows that Duly beneficiaries had lower total risk-adjusted annual Medicare expenditures by an average of $7,777 (24.8%) across specialties compared to beneficiaries of hospital-affiliated physicians. The difference ranged from 17.1% ($6,190) lower in gastroenterology to 32.1% ($19,510) lower in oncology.
• Beneficiaries attributed to Duly physicians had 14.8% fewer inpatient (IP) days, 12.3% fewer emergency department (ED) visits, and a 4.5% reduction in all-cause readmissions than beneficiaries attributed to hospital-affiliated physicians. They also had 5.1% more follow-up visits within 14 days of discharge. All results are risk-adjusted.
• Beneficiaries who received coordinated (Duly primary and specialty) care saw further reductions in risk-adjusted total Medicare expenditures. For example, in addition to the 17.1% difference between hospital and Duly GI cohorts, patients of Duly PCP and GI physicians saw an additional 36.1% savings (a total of $17,021) compared to hospital-affiliated GI patients. Across specialties, they also had fewer IP days, ED visits, and a lower rate of all-cause readmissions, as well as more follow-up visits within 14 days of a discharge.

Commercial results

• In 2024, utilization of hospital settings for core services such as screenings, joint replacements, and imaging was consistently higher in Chicago than nationally, inflating employer costs in already-expensive areas such as GI and musculoskeletal (MSK) care.
• For example, colonoscopies were about 20% more likely to be performed in a hospital setting compared to the national average. In 2024, a hospital outpatient department (HOPD) visit for a diagnostic colonoscopy cost, on average, two to three times more than a visit to an office ($2,159 vs. $577, respectively), as shown in Figure 1. A visit to an ambulatory surgical center (ASC) for the same service was $1,345, still only two-thirds of the HOPD procedure.
• Imaging services, which are critical for the health of employed populations and can be performed in low-cost settings, were performed in hospitals more than 70% of the time in Chicago, despite being more expensive compared to the office setting. For example, a bilateral mammogram screening in the HOPD ($343) is 55% more expensive compared to the office ($222). Similar trends occur across other high-volume imaging procedures.

Key takeaways for employers and policymakers

Comparative analyses of Medicare and commercial data highlight that non-hospital, multispecialty groups can offer more cost-effective, coordinated care, reducing overall healthcare expenditures.

Employers, payers, and policymakers can influence how and where care is delivered to curb cost growth in Chicago. While the current system steers patients toward costly hospital settings, evidence indicates that private practices deliver the same or better outcomes at significantly lower costs. Employers and payers may consider developing innovative provider-level partnerships, while policymakers and researchers can continue to study the merits of site-neutral payments and greater price transparency to support lower costs for employers, employees, and taxpayers.

Read the full white paper.

Funding for this research was provided by Duly Health and Care. Avalere Health retained full editorial control.

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CMMI and MAHA Strategy

In May, the Center for Medicare and Medicaid Innovation (CMMI) announced a strategic shift in line with the Make America Healthy Again (MAHA) initiative that would shift the center’s emphasis away from behavioral health integration, favoring cost control and deregulation over value-based mental health models.

At the same time, the MAHA Commission, which was established through an Executive Order in February 2025, is highlighting  Attention Deficit Hyperactivity Disorder (ADHD), citing concerns around overdiagnosis and overmedication. The Commission’s May 2025 report calls for tighter oversight of prescribing practices, signaling potential scrutiny for manufacturers and clinicians in the ADHD space.

Mental Health Services Parity

The Trump administration is reconsidering how the Mental Health Parity and Addiction Equity Act is enforced, signaling a potential shift in regulatory posture. While no formal rollback has been announced, this potential shift could result in reduced access to mental health services, as insurers may no longer be required to provide coverage on par with physical health services. Stakeholders are closely monitoring these developments, given the significant implications for mental health care accessibility and equity.

Proposed Budget Cuts in Mental Health and Medicaid Funding

The Trump administration’s fiscal year (FY) 2026 budget proposal includes significant funding reductions that could impact core behavioral health infrastructure. The proposal impacts SAMHSA with a $1.1 billion funding reduction, with additional proposals to dissolve the agency entirely.

The CDC is also targeted for budget cuts, which could impact overdose prevention and mental health surveillance efforts. These cuts come amid rising demand for behavioral health support and ongoing opioid-related challenges.

A bipartisan group of senators has objected to these changes, citing risks to federal leadership and service continuity. Mental health advocates and professional societies have echoed these concerns, urging Congress to preserve core services and reject cuts during a continued national mental health crisis.

The president’s budget also proposed Medicaid reductions, which could limit access to mental health and substance use care for low-income populations. The Centers for Medicare and Medicaid Services has encouraged states to pursue Medicaid waivers and demonstration projects that reward integrated, outcomes-based care. Longstanding programs such as Health Homes and Section 1115 waivers offer funding flexibility and incentives to restructure care delivery for behavioral health populations.

Future Opportunities

To navigate the evolving behavioral health policy landscape, stakeholders should prepare more scrutiny of ADHD prescribing and parity enforcement by strengthening compliance and clinical justification. Stakeholders should also consider funding volatility by diversifying engagement in Medicaid waivers, state pilots, and alternative payment models that support integrated care.

Avalere Health is monitoring these developments in behavioral health policy and access, applying our cross-functional expertise in policy, reimbursement, data, and quality to support stakeholders stay ahead of change.  To learn more regarding the evolving behavioral health space and how Avalere can help your business get ahead of these barriers in this uncertain time, connect with us.

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Key Changes for IPAY 2028

• Drug Selection and Eligibility: 
  • Part B Drug Inclusion: For the first time, Part B drugs will be eligible for selection. CMS will identify the top-50 Part B and Part D drugs separately before aggregating the lists and spending to identify the 15 drugs for IPAY 2028 negotiation. 
  • Small Biotech Exclusion (SBE): Manufacturers can apply for SBE under Part B and/or Part D tracks, with an exception granted if either track is met. The SBE application is drug-specific and, if granted, will make a drug ineligible for selection in IPAY 2028, the last year for SBE applications. 
  • Combination Drugs: CMS is seeking comments on how to treat drugs with additional active ingredients that affect bioavailability but are not biologically active against the disease. 
• Changes to the Negotiation Process: 
  • Ceiling Calculation: CMS proposed a methodology to incorporate Part B prices and utilization into ceiling calculations and estimate the 30-day equivalent supply for Part B drugs that differs from the current Part D methodology. 
  • Single Maximum Fair Price (MFP) across Part B and Part D: For drugs covered under Part B and Part D, CMS clarified that it will calculate a single MFP to use across formulations and benefit type. 
  • Therapeutic Alternative (TA) Considerations: CMS is seeking comments on proposed alternative methods for consideration of TAs when developing the initial offer starting point, including the evidence it will consider. In addition, CMS is seeking comment on whether and how to consider non-drug healthcare services when evaluating TAs.  
  • Data Collection: CMS seeks comment on the collection of additional market data that is “forward-looking” and overlaps with the period between selection and start of the IPAY. CMS provided two examples of the type of data that might be included and noted that these data are consistent with section 1194(e)(1)(E) language of “market data and revenue and sales volume data for the drug in the United States.” 
• Part B MFP Effectuation: CMS did not propose a standard default refund amount approach for Part B effectuation, leaving room for stakeholder input. However, CMS did note that it intends to align the process as closely as possible to Part D processes. Additionally, CMS did not describe the role of the Medicare Transaction Facilitator in Part B, but noted that Part B has different supply chain considerations that its effectuation processes. 
• Part D Formulary Management: CMS clarified that Part D sponsors may remove a selected drug if substituted with a generic or interchangeable biological product, subject to specific requirements. 
• Renegotiation Criteria: CMS clarified conditions for drug renegotiation, including changes in monopoly status or significant market changes that may result in a greater than 15% change in MFP.

Implications for Stakeholders 

Stakeholders have an important opportunity to engage CMS during this process to provide insight into the operationalization of guidance policies and access implications. Below are several stakeholder-specific business questions that are likely to shape response and comment strategy. 

• Manufacturers 
  • How will potential changes to the CMS definition of a combination product directly and indirectly impact the expected negotiation selection timing? What are the possible implications for the competitive market, pipeline planning, and forecasting? 
  • To what extent may CMS’s proposed 30-day price for Part B alternatives lower the expected starting point for selected drugs with Part B therapeutic alternatives? 
  • How can manufacturers shape the MFP effectuation process in Part B to minimize access disruptions?  
  • How could the Part B standard default refund amount (SDRA) impact manufacturer gross to net provider economics, and supply chain dynamics? Should manufacturers adjust volume-based rebates to account for Medicare beneficiaries eligible for MFP? 
• Payers 
  • To what extent may updated formulary management guidance shift management of negotiated products? 
  • How does introducing MFPs into the market impact non-Medicare plans based on current or future contract language, relative to the reimbursement mechanism? 
  • To what extent may plans align their preferred drugs across books of business (e.g., Medicare, commercial, etc.)?  
• Dispensing Entities and Part B Providers 
  • How will Part D effectuation impact the ability to stock and dispense negotiated drugs, given the lag in MFP-based reimbursement and the SDRA true-up? 
  • How will Part B effectuation impact Part B provider economics? How might this impact the ability to carry and supply negotiated products? 
  • Is there a preferred alternative SDRA method that mitigates the risk to provider economics? 
  • How might Group Purchasing Organization and distributor contracts change after part B effectuation? 
• Patients 
  • How will the Inflation Reduction Act (IRA) impact shared decision making and access to treatments? Will this change prompt patients to change drugs and/or how they receive them?  
  • What is the impact of MFP on out-of-pocket (OOP) cost? Is there a meaningful difference between the Part D OOP cap and the Medicare Prescription Payment Plan? How much will OOP cost change for negotiated drugs if patients use supplemental insurance to help pay for Part B drugs?  
  • What patient advocacy organizations are involved in IRA negotiation discussions? How can patients join these groups and participate in patient roundtable opportunities? 

Next Steps 
CMS invites public comment through June 26, 2025, to inform the final guidance. Several proposed changes, including the collection of forward-looking financial information and potential changes to factor weighting, indicate potential for additional downward pressure on MFPs. Manufacturer stakeholders should analyze the potential impact of these changes on their portfolios and consider submitting comments to shape policy and mitigate risks. Provider and patient stakeholders should consider how the unintended consequences of the IRA may impact access to care and their ability to continue to treat patients.  

Previous Avalere Health analyses have assessed the impact of MFP on provider reimbursement and potential spillover effects that can shed light on some unintended consequences of Part B negotiations. Connect with us to learn more about how Avalere Health supports client’s policy, access, pricing, contracting and channel strategy related to Part B negotiations. 

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The Medicare Advantage (MA) Star Ratings program was introduced in 2007 to assess the quality of MA plans based on performance metrics and help beneficiaries compare plan options. The Centers for Medicare & Medicaid Services evaluates plans on various measures and assigns them a Star Rating in half-point increments from 1 to 5, with 1 star being the lowest rating and 5 stars the highest.

Passage of the Affordable Care Act in 2010 officially tied plan ratings to payment in the form of quality bonus payments (QBPs), catalyzing program changes that sought to bring greater focus on quality through financial incentives. Plans that achieve higher Star Ratings receive higher payments, with the aim of incentivizing them to continuously improve their performance.

Throughout its existence, the Star Rating program, and the QBP program specifically, has been scrutinized for fairness in assessing and rewarding plans. Several organizations, such as the Medicare Payment Advisory Commission, the Congressional Budget Office, academic groups, and think tanks have proposed modifications to the Star Rating program.

This paper discusses four components of the Star Rating program that have been the subject of various proposals for policymakers to consider: cut point calculations and thresholds, measure selection and quantity, inclusion of Employer Group Waiver Plans, and the cost of the program. Within each proposal area, we present the prevailing justification for each change and how they would likely affect federal entities, payers, and members.

Download the white paper.

Research was requested and funded by the Centene Corporation. Avalere Health retained full editorial control.

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Prior to the Additional Condition for Non-prescription Use (ACNU) final rule, FDA regulations only allowed prescription (Rx) drug products to be either fully (“full Rx-to-over-the-counter [OTC] switch”) or partially (“partial Rx-to-OTC switch”; e.g., only specific strengths or indications) changed to non-prescription marketing status. This meant that a single product could not be simultaneously designated as a prescription and non-prescription product for all use cases.  

To switch a product to non-prescription status, sponsors would have had to demonstrate that the drug product was both efficacious and safe to use in a non-prescription setting and that the label contained sufficient information for consumers to use the drug safely and effectively without a healthcare professional’s supervision. The FDA provided guidance documents on label comprehension studies and self-selection studies for nonprescription drug products.  

This prior regulatory paradigm limited access to products as either prescription or nonprescription. This has been particularly impactful for certain classes of drugs for which availability via prescription and nonprescription could be considered safe and valuable.    

Provisions of the ACNU Final Rule  

On December 23, 2024, the FDA issued a final rule to broaden the types of prescription drug products that consumers can purchase OTC, and allow a drug to be marketed with both prescription and non-prescription status. The rule went into effect May 27, 2025, after its original implementation date of January 27, 2025, was postponed twice. 

The final rule offers manufacturers an approval pathway for a non-prescription drug with ACNU by allowing flexibility when labeling alone cannot convey the necessary information for consumer self-selection or appropriate actual use. Manufacturers would need to submit a new drug application (NDA) or an abbreviated new drug application (ANDA) detailing how the ACNU is operationalized and includes consumer studies. The ACNU would need to demonstrate a “meaningful difference” between the prescription drug product and its non-prescription counterpart.  

If the ACNU is accepted as a reasonable mechanism for consumer self-selection, it would be sufficient to account for a “meaningful difference” between the prescription drug and its non-prescription counterpart without any differences in the drug attributes (e.g., strength). 

Strategic Considerations for Manufacturers 

Manufacturers will need to carefully plan early if they intend to market their products with both prescription and non-prescription status. 

If a consumer is unable to appropriately self-identify for use of the product based solely on the label, manufacturers can propose a variety of different ACNU methods to bridge any gap between insufficient labeling and appropriate self-selection. For example, manufacturers can propose that before purchasing the nonprescription drug product, consumers would need to take a questionnaire on a display screen at a pharmacy kiosk or via an automated telephone response system. Consumers will know there is an extra step required before purchasing the drug product from the label. Manufacturers will need to consider what data is needed to show the safety of the drug product when offered OTC with an ACNU, and what ACNU methodology will be accepted by the FDA to ensure consumer adherence, proper self-selection, and clear labeling. 

There are multiple downstream market access implications, including market share and volume changes, pricing approaches, payer coverage determination, and consumer decision making.  Even if a manufacturer is not planning to submit an ACNU non-prescription application for their drug product, manufacturers will want to carefully observe potential market dynamic shifts for an entire class of drugs if one of the products does receive ACNU non-prescription marketing status. Drug classes that may be affected include antihistamines, analgesics, topical pain or itchiness relief creams, acid reducers, oral contraceptives, and potentially other drugs for common chronic diseases.  

Potential for Added Demand to Pharmacists 

Approval of an ACNU product also has implications for pharmacies, especially if the ACNU product or state law requires intervention by the dispensing pharmacy, such as storing the product behind the counter to facilitate counseling by a pharmacist or requiring a survey to be administered by a pharmacist. Pharmacies will want to consider if there will be an added burden for pharmacists to administer these drugs, if infrastructure changes will need to be made, and if every pharmacy will be providing access to these products. 

How Relevant Parties Can Prepare for Coming Changes 

The ACNU pathway has the potential to optimize patient access to drugs via two distinct routes associated with unique costs and health plan coverage. Manufacturers, payers, and pharmacies will need to thoroughly consider the various impacts on their organizations when determining the value of the ACNU pathway.  

Avalere Health’s regulatory, payer, and market access experts can help interested parties make informed decisions regarding utilization of this new pathway, as well as with execution of strategies. To discuss how Avalere Health can help industry stakeholders navigate this new approval pathway, connect with us. 

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Pharmacy benefit managers (PBMs) administer prescription drug benefits for over 275 million Americans, supporting a variety of plan sponsors including commercial health plans, self-insured employers, union plans, Medicare Part D, and managed Medicaid plans. To assess the evolving role of PBMs within the US healthcare landscape, Avalere Health conducted a targeted literature review. Our search strategy was designed to capture relevant publications focusing on (1) PBM history and evolution context, (2) PBM impact on drug costs, access and outcomes, and (3) emerging trends and future directions for PBMs. We discuss our findings in a paper that aims to describe the role of PBMs in the US healthcare system using evidence to inform the current policy debate.

PBMs in the US Healthcare System

In contract negotiations, plan sponsors and PBMs negotiate the services provided, ranging from administrative functions like claims processing to clinical functions like safety and clinical programs.

Figure 1. Range of Key Services PBMs Provide to their Clients

PBMs can improve member health outcomes through clinical programs. Evidence shows that member and provider outreach programs can increase medication adherence by up to 16% for members with chronic conditions. Additionally, drug therapy management programs can help members better manage their chronic conditions and coordinate their care; a study published in the American Journal of Managed Care found a 10.4% reduction in inpatient visits and 2.6% reduction in emergency department utilization.

PBMs can also generate cost savings on behalf of plan sponsors through negotiations with life science companies and network pharmacies. According to a 2019 report from the US Government Accountability Office, PBMs worked with plan sponsors to manage drug benefits and negotiate rebates to offset Part D spending by 20%. A research paper from the National Bureau of Economic Research estimated that PBMs generate at least a net of $145 billion annual savings.

Over the past few years, PBMs have faced increased scrutiny from policymakers, regulators, and the public. In 2022, the Federal Trade Commission launched an investigation into PBM business practices.​ Congress has also been exploring PBM reform, with at least four pending bills in the Senate and 16 pending bills in the House. At the state level, 35 states have enacted at least one bill covering non-PBM affiliated pharmacy reimbursements, patient cost sharing, rebate pass through, spread pricing, PBM reporting, white bagging, and delinking since 2023.

Figure 2. State Bills to Regulate PBM Activities in Select Topics, 2023–2025 

This heightened attention is largely due to concerns regarding some PBM practices and the impact on prescription drug prices and access. Critics argue that vertical integration with health plans and other entities, as well as consolidation within PBMs, have adversely affected the affordability and accessibility of medications.

The healthcare ecosystem is inherently complex, with multiple stakeholders involved, creating an environment where the nuances of relationships and impacts are not easily untangled. For a constructive debate around legitimate concerns of efficiency and affordability in the pharmaceutical market, stakeholders should take a wholistic approach that balances the calls for increased transparency and timely access with the understanding of how PBMs can serve as tools for efficiency—driving competition, reducing costs, and improving adherence.

Download the white paper.

Funding for this research was provided by Evernorth Health Services. Avalere Health retained full editorial control.

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The EO provides limited detail on how a DTC program would be structured and operationalized or what the role of government would be. Additionally, there is a fundamental question of whether the goal is to establish a DTC channel that affects the physical distribution model of a product, enables patients to directly benefit from MFN pricing, or a combination of the two. There is also uncertainty on whether it applies to medical and pharmacy benefit products and the subsequent operationalization, channel and reimbursement implications. Avalere Health has identified a range of potential approaches for setting up a DTC program in the context of MFN – ranging from incremental in nature and building on existing market models to the establishment of a new government-facilitated purchasing channel.

Below, we outline the spectrum of potential approaches for structuring a DTC program to facilitate MFN access and pricing. Implementation considerations and potential policy and market access pathways for these approaches will likely vary based on drug-specific factors (retail vs. specialty, pharmacy benefit vs. physician administered) and by market segment (commercial, Medicare Parts B and D, Medicaid).

Figure 1. Potential Approaches for Structuring a Direct-to-Consumer Program to Facilitate MFN Access and Pricing 

Next Steps

Biopharmaceutical companies and payers face key decisions in the upcoming months, including deciding whether to participate in a voluntary MFN model, developing and executing policy and access strategies to shape these changes, and evolving their business and portfolio strategies to reflect new market realities.

Avalere Health’s seasoned experts in market access, US and global pricing strategy, and federal and state policy support organizations with a range of tailored activities, including:

• Analysis of the feasibility and opportunity of participating in a voluntary MFN program
• MFN implementation scenarios and implications for both policy and business strategy
• DTC strategies landscape, benchmarking assessment and program design
• Portfolio impact and risk assessments
• Assessment of the implications of MFN program participation on IRA Medicare negotiation
• Stakeholder mapping and engagement planning
• Support for public comments and federal engagement
• Product level access and pricing strategy, both US and global

With robust access to domestic and international pricing data, latest Medicare utilization data, and in-country experts across several key markets, we are well-positioned to support you across a number of areas. Connect with us to learn more.

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Since the Centers for Medicare & Medicaid Services (CMS) codified the use of step therapy (ST) for Medicare Part B drugs in 2019, this and other forms of utilization management have been increasingly used by health plans, including Medicare Advantage (MA) plans. The stated intent of ST is to guide prescribing decisions toward cost-effective, evidence-based therapies. Avalere Health recently surveyed 300 healthcare providers to better understand their real-world experiences with ST protocols, particularly as they apply to physician-administered therapies.

We found that ST is widely used by MA plans, although many providers reported administrative demands and challenges in aligning utilization management decisions with clinical judgment. Respondents identified delays in patient access and adjustments to practice operations as recurring issues. These findings indicate an opportunity for further refinement of ST policy implementation to balance cost containment, clinical efficacy, and patient-centered care.

Key Findings

Trends in Part B Step Therapy Utilization: Among providers that had experience managing Part B ST protocols, the vast majority indicated that they felt use of ST is increasing: 84% reported that Part B ST use has risen over the past five years. Nearly 40% said that more than half of their MA patients are subject to ST for one or more Part B therapy.

Clinical Considerations and Alignment: A recurring theme in survey responses was the degree to which Part B ST protocols align—or misalign— with clinical practice:

• 94% of respondents said that ST limits access to their preferred Part B treatments.
• 53% reported this interference occurred frequently (“often” or “always”).
• 74% believed that ST protocols for Part B products were not consistently based on established clinical guidelines.

Patient Experience and Treatment Access: Providers shared that ST requirements can have direct impacts on patient care:

• Over 60% of providers described the burden on their patients of ST for Part B drugs as “high” or “extremely high.”
• 60% said that patients often wait weeks to receive their original prescribed therapy.

Providers noted that while many patients ultimately gain access through exceptions or appeals, delays may contribute to anxiety or exacerbation of symptoms. These impacts are particularly concerning for patients with conditions that require early or aggressive intervention.

Download the free white paper for additional findings and policy considerations.

 Funding for this research was provided by ASP Coalition. Avalere Health retained full editorial control.

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