Transcription:

Sarah: Hello and welcome once more to another episode of Avalere Health Essential Voice. Our podcast show covers a wide range of healthcare topics, and today we’re continuing our series on Respiratory Syncytial Virus or RSV.

My name is Sarah Moselle and I sit in the policy practice here at Avalere. We’re switching things up today and I’m joined by my colleagues Haley Payne and former host of the podcast, Elif Alyanak. We return to our RSV series with another episode looking at the future of RSV prevention, specifically among immunocompromised individuals.

Individuals with chronic heart or lung disease with weakened immune systems due to other comorbid conditions are at higher risk for severe RSV infection similar to older adults and infants. 94% of adults hospitalized with RSV between 2014 and 2018 had underlying medical conditions, 46% percent of whom, pardon me, had between one to two underlying medical conditions, and 48% having three or more conditions.

These included cardiovascular and lung disease, but also kidney and liver disease, neurologic disease, and diabetes. The CDC suggests there’s an even greater risk among transplant recipients, particularly individuals with lung and stem cell transplants and individuals receiving chemotherapy.

In general, the immunocompromised population can be difficult to develop a recommendation for. Would you agree, Elif?

Elif: That’s absolutely right, Sarah. I think it’s important to remember that vaccine recommendations for immunocompromised individuals need to consider the potentially attenuated immune response that such individuals could have to vaccines.

And I think it’s important to note that there are a host of different reasons why a person could be immunocompromised, like you said. Other factors like the person, the maintenance medication that the individual may be on, including those that are used to treat their immunocompromising condition and the vaccine platform that’s under consideration or the technology that’s being used can also play a role.

Ultimately, diminished vaccine immunogenicity in these individuals then translates into higher rates of clinical significant illness after vaccination and an increased risk in hospitalization. So ultimately recommendations for immunocompromised individuals can’t really be, by definition, one size fits all.

And I think we saw this previously with COVID 19. After the first vaccines were authorized for use and recommended by the advisory committee on immunization practices or the ACIP, a decision was then made to recommend a third primary dose for immunocompromised individuals in addition to their booster doses.

Haley: Yeah, that’s absolutely true, Elif, and these issues really highlight why passive immunizations like monoclonal antibodies can complement vaccination for immunocompromised individuals in particular.

So, ACIP considers data like these and other evidence of diminished immune response to make vaccine recommendations for those with immunocompromising conditions and the recent update to its charter to include recommendations for preventive monoclonal antibodies, or MABs, demonstrates opportunities to adapt recommendations and ensure adequate protection against severe disease and hospitalization for these individuals.

And I also want to note that just like the general population, emerging viral variants and seasonal pathogen circulation can lead to immune evasion as we’ve seen over time with influenza and COVID 19.

And like these other viruses, RSV is seasonal and dominant strains can vary. So a variant that evades what may already be more limited immune protection puts these immunocompromised individuals at a higher risk for a severe breakthrough infection and potentially subsequent hospitalization.

Sarah: That’s a great point, Haley. So what do you think this means in terms of how a future RSV product would be covered? Are there certain considerations or barriers to patient access that are unique to individuals who may have underlying conditions or are immunocompromised?

Elif: That is a great question, Sarah. Most health insurance coverage types, with the limited exception of Affordable Care Act or ACA grandfathered plans, are required to cover all ACIP recommended vaccines without any patient cost sharing.

So this includes vaccines that receive what we call any flavor recommendation, both routine or shared clinical decision making recommendations. This would also include vaccines covered by Medicare Part D or vaccines administered to traditional Medicaid beneficiaries beginning January 1st and October 1st, 2023 respectively as a result of the recently passed Inflation Reduction Act or the IRA.

It’s important to mention as well that insurance coverage is broadly distributed and can be variable among immunocompromised adults. So a 2021 survey found that most immunocompromised adults had health insurance through Medicare, followed by employer sponsored insurance and Medicaid.

Conversely, individuals who do not have immunocompromising condition, among them more than half had employer sponsored coverage. Significantly more immunocompromised adults reported being dually eligible than those without immunocompromising conditions.

So that was about 24% compared to roughly 8. 6%. Overall, as long as a vaccine, I’m sorry, has a recommendation for use from the ACIP insured individuals in the recommended population will be able to receive it at no cost, which I think is really important here.

And even without insurance coverage, there are some, albeit limited, pathways to getting vaccinated.

Haley: That’s absolutely right. So federally, the Section 317 program funds state run vaccine distribution and administration to uninsured and some underinsured adults depending on the state of course.

These programs are often limited though. So the 317 program funds certain vaccines and state programs can vary widely in who is eligible to receive free vaccines and which providers are eligible to offer and administer them.

So they’re not a 100% guarantee, but overall with the IRA being law, everyone with insurance coverage will be able to get free vaccinations. And this is really notable for RSV in particular.

For example, let’s say for Medicare, RSV vaccines could be covered under Part D, which historically could be accompanied by patient cost sharing, but starting next year that won’t be the case.

Sarah: I see. So aside from coverage and payment considerations, is there extra attention that needs to be given when we’re discussing monoclonal antibody and vaccine use, particularly among the immunocompromised populations?

Haley, what are your thoughts?

Haley: Yeah, absolutely. Right now, as we’ve mentioned in previous episodes, prophylactic prevention of RSV is essentially non- existent for the general population. However, the one option that is currently approved for use and available is palivizumab, which is specifically indicated for use in immunocompromised children under two years old.

So for individuals older than two who have high risk conditions and are at increased risk for severe RSV disease, there are no options. But looking beyond prevention, even treatments are limited, and they’re limited to antiviral therapy and immunomodulation with immunoglobulins, corticosteroids, and again, palivizumab in some unique cases.

So this really continues to make immunocompromised individuals particularly vulnerable to severe RSV illness and hospitalization.

Sarah: So in preparation for future vaccine and preventive products that can be indicated and recommended for use, what do about general vaccination rates among those who are immunocompromised and what could those rates mean for future RSV preventives?

Elif: Yeah, I think that’s an important question here as well. And we know that generally vaccination rates definitely vary by the vaccine type. So a recent GAO report noted a wide variance in adult coverage across four routinely recommended adult vaccines.

So that included flu, pneumococcal, shingles, and tetanus. Overall from that report, we see that uptake of flu and shingles is significantly lower than uptake of pneumococcal and tetanus. And while the report doesn’t really discuss rates among compromise individuals specifically, it does note that rates are higher among those with insurance coverage and among those who have at least one regular healthcare provider.

So looking back to what I said earlier, immunocompromised individuals may be more likely to have health insurance coverage, and individuals with complex or high risk health conditions often require more frequent visits to healthcare providers.

Usually they’re specialists to create additional touchpoints and opportunities for vaccination. However, these additional touchpoints don’t always directly translate to higher vaccination rates. So for example, looking at some 2021 data from a subset of patients specifically with inflammatory bowel disease, or IBD.

Those individuals often receive immunosuppressive therapies. And that indicates that these individuals do not necessarily receive preventive services at the same rate as general medical patients. All this to say, there’s another survey, the National Health and Wellness Survey, with data assessing flu vaccination among high risk adults, and that showed from 2007 to 2011 vaccination coverage rates though variable were higher among higher risk groups than among those not considered high risk.

So across other vaccines like Hepatitis B and pneumococcal immunocompromised groups had the highest vaccination rate. So this could be potentially promising for uptake of future RSV preventives.

Haley: And Elif, if you raised a really good point about healthcare providers, so guidelines from the American College of Gastroenterology for example, note the importance of emphasizing primary care in the IBD patient population, to your example earlier, to improve utilization of preventive services since they often view their specialists, their gastroenterologists, as their primary care provider.

And we’ve had some really interesting discussions here at Avalere about how other healthcare providers like specialists and particularly pharmacists can improve vaccination rates among certain patient populations.

This is a good area to explore for immunocompromised individuals, because like you said, they have frequent touchpoints with clinicians other than general practitioners.

Sarah: That’s a great point. And you mentioned future RSV preventives. Can you both share a bit more about what exists and what we’re seeing on the horizon?

Elif: Certainly. I think it’s important to go back to what Haley mentioned earlier and talk about what exists right now. So there’s ribavirin, which is an antiviral treatment, and there are some notable limitations for its use.

So the oral formulation isn’t often used for RSV treatment and the aerosolized formulation is really only approved for children, and that kind of leaves a gap for treatment in adults. Limitations aside, there are case studies that have noted successful oral ribavirin RSV treatment in immunocompromised adult patients, so that suggests that there’s certainly some opportunity there.

We also mentioned immunoglobulins and they can also be used as a preventive option, though they are certainly most often used as a therapeutic. Several studies have found that IV or intravenous immunoglobulin resulted in really beneficial effects, and that included reduced hospitalization time and lessened symptom severity.

It’s anticipated that immunocompromised patients could really benefit more from this therapy than those without immunocompromising conditions. And as we know based on the ACIP charter language, the ACIP is really open to reviewing evidence on immunoglobulins and monoclonal antibodies in an effort to make evidence- based recommendations.

So there are quite a few preventive options in the pipeline too, including vaccines and monoclonal antibodies that I think Haley can cover.

Haley: Absolutely right. And so to summarize from previous episodes, there are several products in phase three clinical trials including maternal vaccines, vaccines for older adults, and pediatric monoclonal antibodies.

There are also several vaccines in phase two, and then just a really robust preclinical and phase one pipeline to follow up on that. So all of these products could potentially receive indications and recommendations for use in immunocompromised populations.

So really I think it’s safe to say that pending study results and potential licensure, we can expect just an arsenal of RSV prevention options to both benefit the general population and to ensure immunocompromised individuals are adequately protected.

Sarah: I agree. Vaccination is a tool in disease prevention and overall public health is critical and equally important among individuals who may or may not have existing comorbid conditions. I want to thank Elif and Haley for joining me today, and thank you all for tuning in to Avalere Health Essential Voice.

If you’ve enjoyed this series, please reach out and let us know. And if you’d like to learn more, please visit us at our website at www. avalere. com.

Elif: Thanks, Sarah. Thanks Haley.

Haley: Thank you.

The post RSV Prevention, Part IV: Immunocompromised Populations appeared first on Avalere Health Advisory.

If you would like to watch the video version, please visit our video page. To learn more about this topic, check out our insight Navigating the Road to RSV Prevention. 

Transcription:  

Elif: Hi, and welcome again to another episode of Avalere Health Essential Voice. Our podcast show covers a wide range of healthcare topics, and today we’re continuing our series on respiratory syncytial virus, or RSV. My name is Elif Alyanak, and I sit in the policy practice here at Avalere, and I’m joined today by my colleagues Alessandra Fix and Tom Hess.  

We return to the RSV series with another episode looking at the future of RSV among older adults specifically. So far we’ve covered pediatric RSV disease prevention where we know that innovation is really bringing a mix of options forward to protect infants against RSV through both vaccines and monoclonal antibodies.  

But RSV disease burden is high in older adults too. It leads to more than 170, 000 hospitalization among individuals older than 65 years of age. And within the US roughly 14, 000 older adults are dying from RSV annually.  

Today, there is no vaccine to prevent infection in older adults, but like the pediatric space, there are a lot of products in late phase development. Do we anticipate that there might finally be a preventive option on the horizon for this at risk population, Alessandra?  

Alessandra: Oh, absolutely. There are several products moving through development right now, which I think is really positive news considering the data you mentioned on RSV disease burden among the older adult population.  

I think those data really showed that this population in particular is incredibly vulnerable to severe disease caused by the virus, and I think that truly demonstrates that there is an unmet need here. We also know that due to age related declines in immunity as well as increased rates of certain chronic illnesses and comorbidities, RSV in older adults can cause or exacerbate respiratory conditions, which leads to the potential for hospitalizations or even death.  

And while there aren’t any preventive options yet available for this population, as you mentioned, there are certainly some on the horizon.  

Tom: As such, Alessandra, an RSV vaccine for the older population will certainly be welcome. Historically, vaccines have targeted children, but immunizations for older adults are becoming increasingly common and necessary.  

We know that RSV hits hard in the fall, winter, and spring, and immunizations for the older population are becoming increasingly more common and necessary, especially in that time period. As life expectations change and the elderly adults become more prone to infection due to comorbidities and compromised immune systems, addressing vaccine preventable diseases in older adults is absolutely critical.  

Alessandra: Yeah, I think that’s exactly right. The Advisory Committee on Immunization Practices or the ACIP, this is the group that develops recommendations on the use of vaccines in the US, that group is anticipating, what this changing landscape could mean for pipeline adult vaccine products.  

We recently saw the development of a specific adult RSV vaccine work group, which indicates a willingness from the committee to consider policy questions related to adult vaccination, and I think a potential recommendation for the use of an RSV vaccine and older adults could be coming.  

The work group has even outlined an interim schedule for their upcoming review of efficacy, immunogenicity, safety and cost effectiveness data of these vaccines, which indicates that we could see an ACIP recommended RSV vaccine as early as June, 2023.  

Elif: So looking at a recommendation coming down the pipeline, I think it’s really important to also consider that this population is unique in terms of their types of insurance coverage, right? Individuals who are 65 years of age and older could still have coverage through employer sponsored private insurance or have Medicare and different types of Medicare at that, right?  

So what does that mean in terms of how these products will be covered? Tom, are there certain considerations or barriers to patient access that are unique?  

Tom: Elif, important question. Among individuals who currently have insurance coverage through Medicare without legislation to have an RSV vaccine added as a part B vaccine product like influenza and the Covid 19 vaccines, RSV vaccines will be added to Medicare Part D.  

However, not all beneficiaries have a Part D plan, which adds to the complexities. About 9.1% of Medicare beneficiaries lack a prescription drug plan. This means that while they could access RSV vaccines, they would be required to pay completely out of pocket.  

And while the Inflation reduction Act or IRA, which was passed recently in August will eliminate patient cost sharing for adult vaccines under Part D and under Medicaid, not all beneficiaries will have access.  

Alessandra: Yeah, I think that’s right. And then I would also add that adults lack kind of a true vaccine safety net in the United States, which is unlike pediatric patients age 18 and younger, who can access recommended vaccines completely free of cost through the vaccines for children or a VFC program if they do not have access through their insurance.  

This lack of a safety net program means that many uninsured adults may not be able to get a future RSV vaccine unless they pay out of pocket, and that could be a real barrier. Now, there has been some recent policy activity over the last several months or years aiming to abate this issue.  

For example, the Biden administration has a proposal to create a vaccines for adults type program that would likely share some structural qualities with the VFC program, and that could provide guaranteed coverage for uninsured adults.  

While discussions on a VFA have kind of somewhat renewed more recently, I think whether something progresses remains to be seen, especially after the recent vaccine related reforms within the IRA, which filled many of the remaining coverage gaps for insured adults specifically.  

Elif: And it sounds like the implications of part B versus Part D coverage plus the general lack of a social safety net are really interesting points in this population. Would we expect that to have downstream differences or implications for the coverage pathways to influence something like where beneficiaries receive their RSV vaccine?  

If we look to Part D first, do we see that individuals get vaccination in one type of clinical setting more than another? And is that an important consideration to keep in mind, Tom?  

Tom: Yeah, it’s a very important point, and we’ve seen a change to where adults are receiving their vaccines. Many adult Part D vaccines, for example, the shingles herpes zoster vaccine, are almost exclusively administered in retail pharmacies.  

Part of the design of Part D was to support accessibility and provide beneficiaries with prescription drugs at pharmacies, but this can make it more cumbersome for medical providers that aren’t pharmacists to bill Part D for a covered vaccine.  

As a result, if we work under the assumption that RSV is added to Medicare Part D, manufacturers should certainly prepare a go to market retail pharmacy commercial strategy.  

Alessandra: That’s right. And then there’s also the fact that the Part D market is managed by private plans, and those plans negotiate rates directly with pharmacies. Those plans will also need to account for added spending on a new adult vaccine when they submit their annual bids to CMS.  

To contextualize that in 2019, Part D spending on vaccines was 925 million dollars in total, and the majority of that, 93%, was spent on just one routinely recommended vaccine.  

So you can see how as more products potentially are added to Part D, plan spending on vaccines could increase by quite a bit. Though increased spending on prevention can also decrease costs in the long run through less spending on RSV treatment and management itself.  

And that could, I think, certainly benefit Medicare Advantage plans in particular as those plans manage patient care on both the medical and the pharmacy side.  

Tom: It’s a great point, Alessandra, and it’s important to remember that the RSV market could be far more competitive than what we’ve seen with some other vaccines, with multiple products working through different methods entering the market at the same time, and are unlike other routinely administered Part B vaccines.  

So manufacturers will need to really consider their go to market strategy.  

Elif: Yeah. These seem like really important considerations, at least to begin thinking about for both manufacturers and markets, particularly looking through the lens of individuals who have adequate health coverage.  

But I think it’s really essential to also have an understanding for adults who may lack coverage. How do we expect older adults who may be underinsured or even uninsured to access RSV vaccine products, Alessandra?  

Alessandra: Yeah, I mean, we touched on this a bit earlier, and as Tom noted, 9. 1% of Medicare beneficiaries do not have prescription drug coverage, and that’s more than 5. 7 million people. So if an RSV vaccine is covered under Part D, these patients could face full out- of- pocket costs if they want to get the vaccine.  

Now, we talked about a potential VFA program, but I’ll also note that both the federal government and state immunization programs could play a role in immunizing these individuals under current program structures.  

So for example, section three 17 of the Public Health Service Act authorizes the federal purchase of vaccines for some populations, but funding is limited and not really enough to cover all uninsured or underinsured adults.  

And then on top of that, those funds are also used to support other really important elements of vaccine infrastructure and so they’re sort of spread a bit thin as it is. And then just the one thing I’ll note on top of that, Section 317 dollars could also be used to purchase some Covid 19 vaccines as they transition away from a centralized government purchase system to a commercial market.  

And that might put further strain on the program.  

Elif: So given these new products and the anticipated recommendations that would come for them, how would we ultimately expect the RSV market to change? What does the future state of the RSV landscape look like in this population that seems to really be significantly impacted by RSV?  

Alessandra: Yeah, so like many of the other populations we’ve discussed throughout this miniseries, older adults do not currently have any preventive or prophylactic RSV options available to them. If you look at the development pipeline, older adult RSV vaccines are likely to be among the first to come to market and with multiple products anticipated from several different manufacturers at similar times.  

This level of competition means that future products will likely need to differentiate themselves using innovative therapeutic approaches. For example, the use of different technologies or different formulations to bolster an immune response such as the use of adjuvants or higher doses.  

These are aspects of technology that might play a key role in steering uptake within this older adult group.  

Tom: Some important insights there, Alessandra. Because this will likely need to be balanced with general growing vaccine hesitancy among adults is something that we need to take note of. As we mentioned, often vaccinations target children and adolescents to give them the immune boosting tools they need to for protection against vaccine preventable disease earlier in life.  

But as individuals are living longer and innovative research is successfully identifying tools to combat new illnesses, there can always be individuals who feel cautious to discuss or receive every new product.  

This hesitation is not necessarily due to common issues of fear of vaccination, but rather vaccine fatigue, particularly given the post pandemic environment.  

Alessandra: Agreed. And on top of that, we’ve also seen documented declines in vaccination rates since the start of the pandemic, and this is largely due to disruptions in routine care generally. There are some previous analyses out there that found that from January, 2020 to July, 2021, monthly vaccine claims decreased on average 32% for adults when compared to the same months in 2019.  

And in that same timeframe, total adult vaccine claims were between 15 to 62% lower than 2019 claims. I think that recovering from these pandemic disruptions will certainly be critical to make sure that we’re adequately preventing vaccine preventable disease and effective messaging of evidence based interventions is certainly an important piece of that.  

I’ll also say that there isn’t really one kind of clear policy based or programmatic intervention to return vaccination rates to pre- pandemic levels. And so cross- sector collaboration and multi prone approaches tailored to community needs is definitely important.  

Elif: Yeah, these are all great points, and I think through this discussion we’ve really highlighted how a resilient vaccination ecosystem is dependent on effectively improving vaccination rates, particularly routine vaccination rates, not just in children, but in older adults as well.  

Again, another really great discussion, and I want to thank you Alessandra and Tom for joining me today. And thank everybody else for tuning in and listening to Avalere Health Essential Voice. Please stay tuned. We’ve got one more episode in this RSV miniseries as we continue to explore the need for effective prevention, particularly among immunocompromised populations.  

If you missed our earlier episodes on pediatric monoclonal antibodies or mAbs, pediatric vaccines, maternal immunization, please see our podcast page. And if you’d like to more please on website, www.avalere. com.  

The post RSV Prevention, Part III: Older Adult Vaccination appeared first on Avalere Health Advisory.

If you would like to watch the video version, please visit our video page. To learn more about this topic, check out our insight Navigating the Road to RSV Prevention. 

Transcription:

Elif: Hello again, and welcome to another episode of Avalere Health Essential Voice. Our podcast show covers a wide range of healthcare topics, and today we’re continuing our mini series on respiratory syncytial virus or RSV.

My name is Elif Alyanak and I sit in the policy practice here at Avalere, and I’m joined today by my colleagues, Mitchell Finkel and Luke Frazier. With today’s episode, we turn our focus to additional RSV prevention products currently in development, specifically maternal immunizations and pediatric vaccines.

Maternal immunizations as a method of RSV prevention in newborn infants is especially interesting. Historically, maternal immunizations or maternal vaccines, have been those that have wide uptake in use among the general population, and then are deemed safe for use in expecting individuals.

RSV maternal vaccines are novel, in that they will be among the first vaccines intended to be given to pregnant individuals for the production of the fetus for the first time, right after the baby is born.

And that’s new, right Mitchell?

Mitchell: Right. This research has been strategically aimed at developing a tool to vaccinate the mother, and provide effective virus prevention to the fetus, through to the baby.

So this will provide immediate protection to the newborn infant at birth.

Elif: And maternal immunizations are actually coming into the pipeline in addition to vaccines being developed to directly immunize children. Right? So how could that impact recommendations?

How would a provider determine which is better to give or to recommend?

Mitchell: Right. Again, we’re talking about three RSV preventive options for infants that are coming to market in relatively quick succession. In the last episode, we talked about RSV mAbs, which are used to prevent RSV in all infants.

Now we’re talking about maternal immunizations and traditional pediatric vaccines.

Luke: Right. As Mitchell mentioned, all three options, assuming regulatory review and approval, will be eligible for assessment and recommendation by the respective country NTAG, or the National Immunization Technical Advisory Group.

In the US, that’s the advisory committee on immunization practices, or the ACIP. These recommending bodies, ACIP included, will evaluate the available evidence post licensure, and make recommendations for use that include the actual schedule and timing of vaccination, and the guidelines for clinical use, such as the population that should be vaccinated, and also the ability for a provider to administer multiple vaccines during the same patient visit, for example.

So we talked previously about how the considerations relative to a pediatric RSV monoclonal antibody or mAb, and how a product like that’s reviewed by ACIP, and how that would be unique.

Right? So now we’re adding the additional considerations of a maternal immunization and a traditional pediatric vaccine for consideration by these advisory groups.

Mitchell: Yeah, and as Luke was saying, ACIP, like other advisory groups in each country, have a framework for reviewing evidence and making a recommendation. Along with assessing the disease burden and epidemiological data, these assessments consider other factors, such as safety and efficacy, cost effectiveness, implementation burden, and other factors before making recommendations for use.

Within the US, the ACIP uses a tool known as Evidence To Recommendation framework. The ETR framework helps ACIP members make recommendations and move from evidence to decisions.

It provides transparency around the impact of additional factors when considering a recommendation. This information is reviewed and considered by the ACIP work group in developing policy options for the ACIP’s consideration amongst six domain; one, public health problem, two, the benefits and harm in intervention, three, values, four, acceptability, five, feasibility, and six, resource use.

So if we assume that all three of these RSV preventive options; mAbs, maternal immunization and vaccines, all receive regulatory approval and demonstrate evidence supporting the recommendation for use, ACIP and similar groups in other countries must also consider how to use these recommendations when other preventive options are available.

Elif: Right, so we understand that NTAGs like the ACIP will review all of this evidence as they fall into these domains holistically, so ideally all equally. What are some unique considerations we should think of as providers try to navigate recommendations for use of both mAbs and vaccines?

Luke: Right, to that point Elif, while providers and recommending bodies like to have multiple options available to assure the supply in different options for different patient situations, there are a lot of different considerations we need to think through with those options available, and also certain situations patients will be in.

Right? So for instance, recommendations will need to consider such situations as maybe an infant that’s protected following maternal immunization, but might not have been born early enough that the protection doesn’t last throughout the entire RSV season.

So should that baby then receive the mAb and, or vaccine option in that instance? Or if we think about what if a baby’s been born prematurely, before a maternal immunization option is available, then what’s the available option for that infant?

Is the mAb and, or vaccine in that case? I think similarly, on a separate point, the current mAb option has been used in high risk infants. Could that influence how new mAb options are used and considered among recommending bodies and providers?

And more over, I think another consideration here is how can the mAb and vaccine options be co- administered with other vaccines by providers among these populations?

So we know that ACIP will always follow the science and evidence provided for a product. Right? And their evidence, and their recommendations, excuse me, will be grounded in data, safety and efficacy.

But they must also consider how these options will be used for RSV prevention and they’ll want to focus on clear and concise guidelines that limit any provider confusion when administering these products.

So I think when thinking about a traditional pediatric vaccine in this space for example, considering the epidemiology and burden of RSV in infants, it’s highly likely that ACIP could readily consider an annual or seasonal recommendation for the use of mAbs and vaccines, like we see with the current influenza recommendation.

Mitchell: And as Luke was saying, we know ACIP is always going to follow the evidence, so we expect additional evidence to be available related to the timing of vaccination in this population.

Mostly because as it stands, the childhood vaccination schedule is quite busy. Children receive a majority of their routine immunizations in the first two years of their life. Evidence generation and review would need to account for the children and parents’ susceptibility and feasibility of a new vaccine in this population, given the complexity of the childhood immunization schedule.

Luke: Yeah, those are all good points Mitchell, and I think that last one in particular, the point on the childhood vaccine schedule, is really important. It is quite busy, and this schedule’s been made even busier by the presence of COVID vaccines, and now possibly broader RSV prevention across all infants.

Right? So I think it’s very important to consider the role that providers play in vaccinating kids and infants. With such a highly prevalent disease, in an ideal scenario, physicians would want to have multiple tools at their disposal to prevent RSV in these populations.

Of course, safety and efficacy will be critically important, but another factor, I think duration of protection, will play into decision making as well. So if maternal immunizations or mAbs provide protection for a period that may not cover the entire RSV season, how is that protection then supplemented to ensure protection throughout the entirety of this season?

And for how many seasons should babies be protected for then subsequently? Is it just the season during the first year of life, or should some babies be protected for a second season as well?

Or should that just be reserved for those at highest risk for RSV? I think there are a lot of considerations that still need to be worked through in this space.

Elif: I think the two of you have really highlighted how the scientific evidence will be of utmost importance here. With these potential considerations for use and recommendation in place, there will also be important implications in terms of access to these products.

Right? What do we think will happen in terms of coverage pathways, Mitchell?

Mitchell: Yeah, that’s a good question. We expect that both maternal immunization and the pediatric vaccines will follow traditional vaccine like pathway, meaning they would be FDA approved and then receive an ACIP recommendation.

That ACIP recommendation, we expect to trigger private sector coverage for both the maternal immunization and the pediatric mAb. When we think about maternal immunizations, we also expect it to be covered by Medicaid, especially in light of the Inflation Reduction Act’s required coverage for adult vaccines.

For pediatric vaccines, we also expect vaccines for children inclusion. So all children should have access the vaccine, no matter their insurance status.

Elif: It certainly is really important to consider the innovation coming for RSV prevention in infants. And while there are unique consideration for both recommending bodies and providers, I think ultimately we’ve seen that the evidence generated, and the current programs and statutes providing access and coverage, will really play into how these products will be used in preventing RSV across infants.

I think this was a really great conversation and I want to thank you Mitchell and Luke, for joining me today. And thank you all for tuning in to the Avalere Health Essential Voice podcast. Please stay tuned for the additional episodes we have in this RSV mini series, as we look towards RSV prevention in older adults, which has been a long time goal when we talk about vaccination across the life course.

If you’d like to learn more, please visit us at our website, www. avalere.com.

The post RSV Prevention, Part II: Pediatric Vaccines and Maternal immunization appeared first on Avalere Health Advisory.

If you would like to watch the video version, please visit our video page. To learn more about this topic, check out our insight Navigating the Road to RSV Prevention. 

Transcription:

Elif: Hi, and welcome to another episode of Avalere Health Essential Voice. Our podcast show covers a wide range of healthcare topics. My name is Elif Alyanak and I sit within the policy practice here at Avalere, and I’m joined today by my colleagues Sarah Moselle and Mitchell Finkel.

Today’s episode is part one in a miniseries focused on Respiratory Syncytial Virus, or RSV. Discovered in the 1960s, RSV is a lower respiratory tract infection with a consistently increasing prevalence globally.

Within the United States, on average, the CDC estimates that RSV leads to approximately 2.1 million pediatric outpatient visits annually, and an estimated 58, 000 children younger than five years old are hospitalized due to RSV infection annually.

Nearly all children experience at RSV infection by the age of two years old, and in many that infection may be mild, but can be especially dangerous and severe in high risk children.

While there is a monoclonal antibody used for prevention in high risk infants, there is no vaccine or long term immunization option to prevent infection in all infants. Fortunately though, through continued research, there are several products in development that may enter the market over the next couple of years.

Therefore, it’s important to begin considering how these innovative offerings will fit within the RSV continuum of care and how their use will be recommended by policy bodies like the Advisory Committee on Immunization Practices, or ACIP, that will occur within the United States and also in similar types of advisory groups in other countries.

So starting with this last point, I’m curious. What kind of recommendation do we believe these products will receive? How do we think recommendations might play out across these new products as they are expected to enter the market? Sarah?

Sarah: Thanks, Elif. That’s a great question. Current preventive options narrowly target infants at highest risk for RSV infection and they require monthly dosing throughout the season and so in consequence, it’s likely that new products and approaches which would prevent RSV infection in all infants within a given cohort would be viewed quite positively by advisory and recommending bodies as well as by providers and parents and caregivers.

Now at the global level, WHO and its advisory committees have signaled interest in diversifying RSV prevention, particularly for all infants, including through long acting MABs, but it is worth noting that in several major markets, policy and access pathways for preventive MABs are unclear or are being created de novo and in some cases, legislative or statutory change might be required for long- acting MABs to move through a more vaccine type of pathway.

Now, here in the U. S., preventive products like vaccines are reviewed and recommended by the ACIP, however the currently available product for preventing RSV and high risk infants, which is called palivizumab, it’s been on the market since 1998, it has fallen outside of the ACIP’S purview which is likely because of the access and coverage pathways that were in place at the time of its launch.

The pediatric targeted RSV products in development now and expected to enter the market sooner are taking a mix of approaches. We see maternal immunization, pediatric vaccines, and then newer preventive monoclonal antibodies and we anticipate that the ACIP would review and consider recommendations across all of these approaches and options including the monoclonal antibodies, or MABs.

The primary difference with the latest monoclonal antibodies and palivizumab is around dosing, so whereas palivizumab requires monthly dosing, newer long- acting MABs that are in the pipeline are expected to provide a single dose of protection throughout the RSV season, which is really more of a vaccine type of immunizing approach.

Elif: So per Sarah’s suggestion, it seems like the ACIP will definitely be the body to assess and potentially make a recommendation for the use of these RSV MABs. Do we think that these products technically fit within the traditional definition of an immunization, Mitchell?

Mitchell:  Yeah, absolutely. Technically speaking, MABs provide passive immunity by introducing antibodies that provide immune protection for a period of time. So this definitely falls into the committee’s purview, as the name suggests, the Advisory Committee on Immunization Practices, and this would fall as an immunization.

To make this more clear, in March 2022, the committee’s chart was updated to include language that specifically permitted them to issue guidance on the use of specific antibody products for the prevention of infectious diseases so now the committee definitely has the authority to review these products and recommend them.

Elif: So given these products do get recommended by the ACIP, how do we think they would be covered? What are some critical patient access considerations that we should have?

Mitchell: Yeah. An ACIP recommendation is really influential in this space. ACIP makes recommendations as it relates to vaccines as well as the American Academy of Pediatrics, or AAP, could issue guidance that would inform provider actions as it relates to RSV prevention.

Back to that point about ACIP recommendations. Under Section 2713 of the Public Health Services Act, if MABs are recommended by the committee and added to the immunization schedule, commercial payers will be required to cover the product without cost sharing.

In contrast to Section 2713, the Vaccine for Children program pathway is less clear. The VFC program provides vaccines to children on Medicaid as well as those uninsured or underinsured and American Indian Alaskan native beneficiaries.

As I noted, this pathway is relatively unclear since traditionally the program has only covered vaccines and there’s an active discussion right now among stakeholders whether the program could cover MABs.

A study presented at the Pediatric Societies meetings stated that 89% of pediatricians preferred for MABs to be included in the VFC program, so it’s definitely an important thing when we think about ensuring broad access to these products.

Elif: So given that advisory committees like the ACIP seem to make recommendations on the use of these products, how would we anticipate or expect the RSV market to evolve?

Do you have any thoughts, Sarah?

Sarah: Yeah, thanks, Elif. We have seen a surge in R& D for RSV over the past decade, and we are expecting to see the impact of these investments hit the market in coming years so as we see a variety of new products come to market with potentially greater efficacy for diverse cohorts, the compound annual growth rate for the RSV vaccine and antibody market is expected to grow significantly, at a rate of 38.

9% between 2024 and 2028. So that’s likely to be worth $ 2. 56 billion in 2024 and rising to $9. 53 billion by 2028 and we’re really looking at a landscape that will be highly concentrated and drastically different from the current one where a single product is approved for use with very tight and complicated utilization guidelines.

Mitchell: Yeah, and as Sarah was saying, as the RSV market is growing, the healthcare infrastructure and capacity also has to grow in parallel so that we can better understand RSV seasonality and burden.

Additionally, we have to prepare for distribution coverage and reimbursement for these products. In addition to the market, product features will play a considerable role in determining a manufacturers market advantage.

We’ll have to consider the ease of year round dosing or a birth scheduled dose versus any seasonality related recommendations. Similarly, the need for single dose versus multi- dose can definitely impact the sustainability for pediatric programming and acceptability among providers and patient populations and ultimately, the inclusion in the Vaccine for Children program and a lot of these considerations are unique to developed countries such as the US but they don’t factor in the importance of affordability, financing, or supply for low to middle income countries, which are also impacted by RSV.

Elif: Yeah, it really sounds like based on these changes that you are anticipating and the potential evolution, that it is worth another conversation to get further into the global considerations, and not to mention how some of these assessments may change as we anticipate the development of more traditional vaccines for both children, but also for other effective populations, right, like pregnant individuals and older adults.

I really want to thank Mitchell and Sarah for joining me today. I thought it was a really important conversation, and I want to thank you all for tuning in to Avalere Health Essential Voice. Please stay tuned for the additional episodes that we have in this RSV series and if you’d like to learn more, please visit us at our website, www.avelere.com.

The post RSV Prevention, Part I: Pediatric Monoclonal Antibodies appeared first on Avalere Health Advisory.

Transcription:  

Ryan: Hello and welcome to another episode of Avalere Health Essential Voice. Our podcast show covers a wide range of healthcare topics. My name is Ryan Urgo. I’m a Managing Director in the Policy Practice here at Avalere, and I’m joined today by Kelly George, a principal on our market access team, and Kelly also leads our FDA Regulatory Strategy team within Market Access.  

Today’s episode is Part Three of a three- part mini- series focused on how the implications of CMS and Medicare coverage decisions help to better define patient access. In the first two episodes, we focused on an overview of the NCD process for monoclonal antibodies and the evidence development requirements necessary to fulfill the CED.  

In this episode today, we’ll take a more forward- looking approach and look into how the NCD could impact what we could expect from CMS and FDA as well as how plans may approach coverage and access decisions for products that are more likely to undergo accelerated approval or fall under a potential NCD in their own right.  

So to start, Kelly, first question for you. How do you think the recent monoclonal antibody NCD decision could impact downstream interactions between FDA and CMS?  

Kelly: When we think about this recent NCD and CED decision and try to piece together how we expect this to impact downstream decisions, interactions with the agency, the first thing to do is for us to take a step back and really think about what role each of these agencies play in the series of decisions between a potential product and a patient accessing product.  

For example, FDA, their role is to gate keep market entrance. Their evidence expectations are well- defined in statutes and regulations. There’s two different bars of evidence, substantial evidence and reasonably likely to be of clinical benefit, right, so that’s the difference between overall survival and progression- free survival, but really that focus on safety and efficacy.  

CMS, however, when we’re thinking about Medicare coverage, they’re the six protected classes but then they have this term reasonable and necessary, and that goes a step beyond safe and effective with FDA, right? The reasonable and necessary, it’s not defined in statute, it’s in the program integrity manual, and it includes not just safe and effective approved by FDA but also non- experimental or investigational.  

This term appropriate, so it means if it doesn’t exceed medical need, correct setting, and a pile of other criteria that CMS is using to determine that next level of decision and gatekeeping, which is coverage.  

So flagging that as we think about how this plays out, these decisions play out for products in the pipeline, simply that each of these agencies play different roles. One of them, FDA has two different evidence requirements. CMS has essentially one bar, but a bar that’s not necessarily restricted by statute and has an opportunity for flexibility.  

Thinking going forward, I think there have been attempts for collaboration. There’s been the 2011 parallel review medical devices that had mixed reviews of CURES 2.O, where there’s draft bill techs proposing these two agencies to really work together for certain endpoints and rare diseases.  

Each of this really may give opportunity for the agencies to streamline approval and coverage decisions going forward. But speaking of coverage, I’d be interested to hear from you, Ryan, on the role of Part D, providing coverage for this product and these types of products.  What’s going on there?  

Ryan: Yeah, so part D was an interesting element of this recent NCD. As it’s stipulated in the FAQ, if a drug is not covered under Part B for failing to meet medical necessity criteria then it’s considered a Part D drug.

For all intents and purposes, Aduhelm, outside of the context of CED, may be considered a Part D drug. But importantly, part D plans have the option to exclude the drug from coverage if CMS determines that its use does not meet medical necessity conditions when the drug is used.  

So at the end of the day, plans have the right to exclude these Aduhelm and related monoclonals from their formularies. It’s also possible, however, that they may cover the product, the formulary, but add in pretty restrictive utilization management.  

The plan has some discretion within the Part D program as to how that language can be written so it’s quite possible that the could be modeled on similar terms that we see in the NCD itself, so there could be a CED- like component to the utilization management protocols.  

It’s possible that there is also utilization management or prior authorization that is a little bit softer, but really it’s going to come down to the individual Part D plan in that instance, Kelly.  

Kelly: Yeah, and among the products that are treating unmet medical needs that may be likely to undergo these accelerated approval pathway or be candidates for an NCD, how do you see these insurers handling management of these products?  

That’s a really interesting question, which is how current experience may inform the way that plans manage the broader set of products that treat unmet needs and that may be candidates for an NCD, certainly those products that have undergone accelerated approval.  

I think we’ll certainly see more planned scrutiny on accelerated approval products in the wake of this NCD. Just like I mentioned earlier with respect to how Part D plans may treat Aduhelm, if you think more broadly about how plans may treat accelerated approval products, they will have the flexibility.  

There won’t be a one- size- fits- all approach, and I think that they will take a look at the existing evidence requirements and, particularly the products labeled, and look to tailor their prior off criteria along those lines.  

They may also take use from the emerging package just in terms of the FDA having potentially a little bit more ability to keep manufacturers accountable to when they need to furnish full confirmatory trial data.  

It’s possible that there could be some limitations that plans place around those types of products before that information comes through. But I think the important thing to stress here is that payers also need to consider the potential benefits of these products as well, just in terms of fulfilling the unmet need that they do fulfill.  

The reality is that products that have gone through accelerated approval have been widely used by patients to fulfill unmet needs. Really, it goes beyond just cancer treatments, which are the first that tend to come to mind here, but into classes that treat orphan and rare conditions, immunology conditions, and neurological conditions as well.  

There’s also another element to this where limiting access to these types of products could also have implications on disparities in care, and I think that’s another important consideration.  

So needless to say, Kelly, payers will have a lot to think about as it relates to the broader management of these types of products that to fill an unmet need that have undergone accelerated approval. It will be important to not over- correct based upon some of the lessons that they’re learning from the current monoclonal NCD process.  

If I were to bring us home though and ask you one final question, looking to the near future, how are we expecting things to play out over time? Can you give us a little bit of a hint of what may be to come and what challenges or opportunities may exist as it relates to how the FDA and CMS may consider these types of products?  

Kelly: Yeah. We’re looking at the pipeline, the types of products that are going to come through this decision matrix, and the near future and the near term really leans heavily into orphan drugs, into products for small populations, for rare diseases, plenty of products in pipeline for oncology and immunology, all these types of products.  

These are a strong medical need, certainly an urgency to move quickly, and a real urgency to create early access to critical products. But, at the same time, they have a shifted risk benefit to some of the older products that we saw coming through in the early 2000s or in the ’90s and it’s much more challenging to run a clinical trial for these types of products.  

It might be less appropriate for us to have the two pivotal trial criteria of the past. These types of products really align strongly with the accelerated approval criteria, but at the same time create a level of uncertainty that will result in conflicting opinions for decision makers.  

Whether that be FDA, CMS, payers or physicians, there’s certainly an opportunity as these products come through the market for us to figure out what’s the best system for checks and balances as this landscape for drugs continues to shift.  

Right? And identify what’s the best jurisdiction and programs to put in place to meet the needs of the US healthcare system and really make sure that those right products reach the right patients.  

Ryan: Wonderful. Well, I think we are just about at time for this segment so I just want to thank you, Kelly, for joining me today and thanks to all of you for tuning in to the Avalere Health Essential Voice. Please stay tuned for more episodes in this series and, if you’d like to learn more, please do not hesitate to visit us at www.avalere.com. Thanks so much.  

The post NCDs, Part III: Agency Mandates, Decisions, Coverage and Access appeared first on Avalere Health Advisory.

Transcription:

Lilian: Hello and welcome to another episode of Avalere Health Essential Voice. Our podcast covers a wide range of healthcare topics. Today’s episode is part 1 in a 3-part series that focuses on how CMS and Medicare coverage decisions may impact patient access.

My name is Lilian Buch. I’m a Principal in the Market Access practice here at Avalere. I am joined by my colleague Mark Von Eisenberg, who is a Consultant in the Market Access practice.

In this episode, we will be providing an overview of national coverage determinations (NCDs), specifically those with coverage with evidence development (CED), and highlight the operational differences across these NCDs with CED. We’ll also identify potential impacts on patient access, strategies and considerations for life sciences companies, and where strategic commercialization strategies may be affected, from the development of evidence generation through coverage.

Medicare is a defined benefit program, meaning that for an item or service to be covered, it must fit within a defined benefit category. So, CMS uses available evidence to fit that item or service within that benefit category. As such, CMS can act as a gatekeeper and one of those gates can be NCD. This mechanism has been utilized over the past few decades and it can include certain guidelines for coverage.

What we’re talking about today is an NCD with CED, meaning that for a Medicare beneficiary to access a therapy or service, it must be covered underneath the clinical trial or a registry.

We have seen a fair number of NCDs with CEDs over the past decade. Currently, CMS is implementing about 21 different CEDs. The Avalere team has delved into the history of many of these NCDs to try to understand the impact on patient access.

Mark, what are some of these notable examples of NCDs, and what can we learn about the patient access implications of those CEDs?

Mark: Absolutely, Lilian. It’s an important consideration to note that meeting CED requirements has taken a few different forms over the years, which highlights how CMS’s decision-making paradigm is dynamic. It can be subject to influence.

One chief example of that is back in 2018 when there was an NCD with CED proposed for CAR T-cell products. This was at the time that the first CAR T products had been approved. Through the public comment process, the CED requirement was actually removed. Stakeholder comments cited that this CED requirement would be a barrier to patient access. It would be overly burdensome, operationally as well as financially. There was already ongoing evidence generation that was looking to answer the same question the CMS CED would look to answer. So, with that rationale, the CED requirement was removed.

In another instance, we’ve seen where registries or prospective trials have been used for longitudinal evidence generation to satisfy a CED requirement as well. This occurred back in 2012 with the transcatheter aortic valve replacement (TAVR) NCD, which still is running today. Folks that are seeking coverage for that procedure can enroll in this prospective registry, and that is the mechanism to fulfill CED for TAVR.

Sometimes we see CED fulfilled with clinical trials. The case that comes to mind there is for off-label use of colorectal cancer drugs in 2003. Products were sequentially added to that NCD until there were 4 products on the NCD. CMS went to the National Cancer Institute at NIH and charged them with confirming and corroborating a set of trials that would be the access pool for patients to receive those products and get Medicare coverage for them. That NCD is still ongoing and the stipulation there is that some products have since expanded their label from an FDA standpoint and are no longer subject to some of the CED requirements. Nonetheless, the CED still runs with those trials.

The most recent example here is the monoclonal antibodies to target amyloid beta for Alzheimer’s disease. This final decision came through in April and something we have not seen before is that the criteria for CED is demarcated by the method in which the product was approved at FDA. So, traditional approval versus accelerated approval. Additionally, we have never seen an entire class of therapeutics, rather than particular products or procedures, be under the purview of a single decision as it is with this new NCD.

So, that’s some of the history of how we’ve seen CED requirements fulfilled

Lilian: Thank you for that historical perspective, Mark. A lot of great learnings there. As we start to think about the potential impact of how patients may be able to access these therapies, it’s really important to think about those operational variances, many of which you described. You can see that, although various NCDs have specific paths forward for patients to access that therapy or service, it’s important to highlight those variances and how those variances can essentially put pressure on the providers, the patients, and also the manufacturers as they think about how to support the patient, to ensure that there is some utilization, because at the heart of it, utilization is important to develop that CED.

You really have 2 ideas here, 2 considerations that manufacturers must think about. Number 1, how do you support the CED and ensure that there is patient access? Perhaps just as important is this idea of the rapid generation of evidence because then you can move through the CED and those requirements can be fulfilled. So, first and foremost, providers and other stakeholders have to think about what it takes to stand up a clinical trial or a registry. Some providers may or may not have that logistical and infrastructure set in place, which can put some negative pressure on access.

Second, you have patient considerations and barriers, which may have to do not only with the type of therapy, but also where treatment can occur. You have pressures on manufacturers and life sciences companies as they start to think about what it takes to support that, so the operational and logistical considerations are not only for coverage, but also much earlier. The idea is that then you start thinking about the confluence of all these NCD operations as being part of your larger and more comprehensive strategy.

Mark, you touched on the fact that while it’s very important to understand coverage as it is under the NCDs, it is also important to think about a regulatory strategy coupled with a coverage strategy. How might a company start thinking about marrying the 2 in the future?

Mark: It’s important to ground this commentary by noting that CMS and FDA have historically had distinct but complementary roles when it comes to the approval and the coverage of products. There’s really limited precedent for the 2 agencies involving themselves in one another’s business.

When it comes to the monoclonal antibody NCD that we were discussing earlier, we see that products, or sponsors in this case, which elected to use the accelerated approval development and review paradigm at FDA will then be faced with a different level of evidence generation and scrutiny for CMS’s confirmation of clinical benefit. What that highlights as an interesting case is that oftentimes there’s going to be, from a regulatory standpoint, regardless of accelerated approval, ongoing evidence generation requirements for regulatory goals. Then in the event of an NCD, or an NCD with CED here, ongoing evidence generation requirements for coverage goals. So, is there a way to mesh those 2 or to be thinking in creative ways to plan evidence generation that could accomplish both of those goals? It certainly is an interesting thought and is something we’ll spend some time thinking more about in our next podcast that will focus on evidence generation plans.

At the end of the day, we’re fighting time to get a body of evidence that’s usable for regulatory or coverage decisions as quickly as possible because patient access is what stands to win or lose here. So, the time required to stand up trials and enroll patients and generate that data while patients are waiting for a coverage mechanism or an access mechanism is what can be optimized coming out of this FDA/CMS engagement idea. It’s certainly something that we will continue to monitor both with this NCD, but also in general as we think about evidence generation.

Lilian: Yeah, thank you, Mark. Very interesting perspective from the regulatory side of the house here. We covered a number of points here, but again, we want our listeners to think about how NCDs or really coverage determinations in general have impact on patient access over time. Generally, with an NCD and even with NCD with CED, there is a path forward for Medicare access, and as that pathway continues to be utilized, it is important for all stakeholders to understand the operational variances and how to implement within the context of clinical trials, but also understand that it is an opportunity for evidence generation and for patient access.

Now, as manufacturers start thinking about evidence generation strategy, it is important to marry up those 2 and have a comprehensive patient access strategy with the broader impact to patient and provider experience. Provider experience becomes relevant too because provider perceptions are important as coverage decisions are made. It is important to understand that those decisions might impact uptake and utilization, and perhaps even broader policy decisions.

So with that, thank you all for tuning into Avalere Health Essential Voice. Thank you, Mark, for joining me today to discuss this important topic and for your insights around the regulatory issues. Please stay tuned for more episodes in this series focusing on FDA engagement and the importance of a tailored evidence generation strategy and its impact on coverage. If you’d like to learn more, please visit us at www.avalere.com. Thank you.

The post NCDs, Part I: Overview of NCDs, CED, and Potential Access Barriers appeared first on Avalere Health Advisory.

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Transcription:

Emily: Hello and welcome back to the third and final piece of our Kidney Care Outlook series. My name is Emily Belowich and I’m a Consultant in Avalere’s Market Access practice. I’m excited to be joined today by 2 of my colleagues, Grecia Marrufo, a Managing Director in our Policy practice, and Brigit Kyei-Baffour, an Associate Principal in our Market Access practice.

We spent the first 2 episodes doing a deeper dive into the kidney care stakeholder environment, providing a snapshot of the key players such as the large dialysis organizations and the specialty kidney care companies. We’ve also had an opportunity to highlight some of the significant policy reforms impacting the kidney space, such as the 21st Century Cures Act, and outlined some other important challenges and opportunities ahead for payers, manufacturers, and other stakeholder groups.

There’s one piece that we have not yet addressed head-on and that is disparities in kidney care. We know that racial, ethnic, and socio-economic disparities in chronic kidney disease have been documented for decades, but there has been little progress made in mitigating these challenges.

I want to turn to Grecia first. How is the CMS Innovation Center (CMMI) looking to address these gaps?

Grecia: Thank you so much for this important question, Emily. Advancing health equity has been and continues to be a cornerstone of the Biden administration, but as you mentioned, these disparities in kidney care have existed for years. We’re talking about disparities in quality of care, transplant recipients, and access to home dialysis.

CMMI has demonstrated its commitment to focusing on kidney health disparities in a few ways. Most notably, we saw a lot of movement in the rulemaking cycle for the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) rule. Last fall, CMS finalized various proposals that were introduced to further address health and socio-economic disparities in kidney care. We saw these changes in the ESRD Treatment Choices Model, also known as the ETC Model. This model includes incentives for participating dialysis facilities and managing clinicians to advance health equity, enabling access to alternatives to in-center dialysis for ESRD patients of lower socio-economic status.

CMS finalized its approach to the ETC model benchmarking and scoring methodology with the addition of the health equity incentive to the improvement scoring methodology. With the health equity incentive, ETC participants who demonstrate significant improvement in the home dialysis rate or transplant rate among their aligned beneficiaries who are dual eligible for Medicare and Medicaid, or who are low-income subsidy recipients, could earn additional improvement points.

Emily: Thank you so much for this intel, Grecia. It’s really exciting to hear about the work that CMS is doing to address these gaps.

Brigit, you focus most of your time at Avalere on the role of social determinants of health tied to healthcare. Can you help us make sense of some of this information? How can this translate to health system environments, and when can we expect to see some of the real effects of the new policies?

Brigit: Yeah, thanks, Emily. It’s a good question. This is a major milestone for CMS and it’s a great example of CMS making equity the centerpiece of one of their innovation models. It’s huge to see the Innovation Center looking to include more providers serving low- and moderate-income communities, racially diverse populations, and/or rural populations in their models.

Based on what we know of some of the existing gaps in access to and utilization of healthcare services, specifically dialysis services, these models provide opportunities for providers to reexamine the impact of social determinants of health on specific patient populations, and really leverage that information to redefine how they provide care. Now that the ETC model, which is a mandatory model, is underway, we can expect to see the impact of some of these changes as early as the end of 2022.

Emily: That’s great to hear. I’m excited to see the progress of some of these models and how they come into effect in healthcare systems and in some of the scoring and improvement methodology. I want to continue the conversation about health inequities in kidney care, but I’m also interested in hearing what’s at the forefront of professional societies and delve into what’s important to patients.

Grecia, can you tell me a bit about what is top of mind for professional societies in kidney care specific to addressing disparities?

Grecia: Absolutely. There are a couple of things to call attention to. The first one is related to the glomerular filtration rate (GFR). For those who may be unfamiliar, estimating this rate is done through a test that measures your kidney function and determines your state of kidney disease. If your estimated GFR number is low, your kidneys may not be working as well as they should. Individuals with low GFR are at an increased risk of having chronic kidney disease progress to kidney failure.

One of the things that is interesting about this rate calculation is that since 2009, it has been based on an equation that uses age, sex, race, and creatinine level to determine this number. In recent years, concerns have been raised that the use of race in estimating GFR could contribute to care inequities, especially in kidney disease. Black Americans are 4 times more likely than White Americans to have kidney failure, but at the same time are less likely to receive kidney transplant. So, there is a concern here about how the inclusion of race can affect care decisions.

The second piece is around closing the race and ethnicity gap in access to living donor kidney transplant. As it stands now, racial concordance is not required for living donation. Nevertheless, racial concordance in living donation is over 95%, and about 75% of living donors are White. As a result, there is a huge disparity in access to living donor kidney transplants, which are limited to begin with.

Emily: It’s so interesting, thank you for sharing. I know that these are 2 of many items that we’re seeing in advocacy for health equity in kidney care. Among the 2 pieces that you just mentioned, Grecia, we know that there’s a continued focus on increasing public investments in kidney health equity, extending Medigap to all ESRD beneficiaries, ensuring equitable access to home dialysis, among many other initiatives to address disparities. So, Brigit, what is Avalere doing to track these items? What else is happening on the horizon of social determinants of health and health equity in kidney care?

Brigit: There’s a lot that lies ahead. Avalere is doing a lot of work with our clients to try to analyze what this means in the world of kidney care service utilization. In fact, Avalere conducted an analysis last year that found gaps in access and outcomes of kidney care across patient race, ethnicity, and socio-economic factors. What this analysis really highlighted was that there’s a huge need for stakeholders ranging from dialysis organizations, nephrologists, payers, and life sciences companies to really take a collaborative approach toward advancing efforts to close the gaps in care by understanding the clinical and social needs of historically underserved patient populations, and using that information to remove barriers to access for treatments including drugs, devices, therapies, and other forms of care.

In addition, Avalere has also engaged with our clients to take a deeper look at the impact of social determinants of health on disparities in care by leveraging our internal data assets to better understand affordability and access barriers to care and what the impact of those barriers are on specific patient populations.

We also engage with stakeholders via primary research to better understand barriers faced by specific communities. We talk to payers, providers, health systems, and other key stakeholders to better understand what those barriers are and strategize on how to arrive at targeted solutions. As part of those engagements, we’ve done patient population mapping to better understand variations in treatment patterns and health outcomes, as well as look at the impact of some of those factors on ways to address treatment and ways to improve access to care.

These are just some examples of the many ways that we’ve been able to partner with clients. I think that this will continue to be an ongoing effort on our end to work in partnership with our clients to really improve access to care in the kidney care space.

Emily: Thank you so much for highlighting some of the work that Avalere is doing here. Thank you so much again to Brigit and to Grecia for being our panelists today and speaking about such an important part of our healthcare system reform and for helping to provide a snapshot of what is to come. We really appreciate all of our listeners for tuning into this miniseries.

For more information about our work, please visit avalere.com. Thanks again.

The post Exploring the Kidney Care Environment, Part III: Addressing Healthcare Disparities appeared first on Avalere Health Advisory.

Transcription:

Emily: Hello, and welcome back to part 2 of our Kidney Care Outlook series. My name is Emily Belowich, and I’m a consultant in Avalere’s Market Access practice. I’m excited to be joined today by two of my colleagues—Matt Kazan, who is a Principal in our Policy practice, and Jack Fagan, a Senior Associate in our Market Access practice.

Our first episode set the stage for why we’re hearing more about kidney disease in the news. We talked about where it fits into healthcare reform and who the patients are, and introduced the Centers for Medicare and Medicaid Innovation (CMMI) payment models. We also talked at a high level about large dialysis organizations (LDOs) and touched on some of the newer players in this market, like kidney care specialty companies. I’m excited to do a deeper dive into some of these things today, particularly on some of the trends from a policy and payment perspective.

Matt, let’s start with you. Can you tell me a little bit more about the world of managed care in kidney disease? What are some of the recent changes that may or may not be impacting payers?

Matt: Thanks, Emily. This is an interesting space and one where there’s been, as you said, a lot of recent changes. Medicare is a big payer in the kidney space, but a lot of that has been on the fee-for-service side. There have been restrictions on patients with kidney failure to enroll in the managed care side of Medicare or Medicare Advantage (MA), but that has changed.

In 2016, Congress passed a law called the 21st Century Cures Act, which removed the prohibition of kidney failure patients from enrolling in any MA plan they want. This change went into effect in 2021.

We recently released some data that looked at how many of these patients did switch over from fee-for-service to MA in their very first opportunity to do so. The findings were really interesting. We found that just over 40,000 patients with kidney failure who were in fee-for-service in December of 2020 moved over to an MA plan the following month for plan year 2021. While 40,000 people doesn’t sound significant, this general subpopulation is relatively small, but the proportion of the patients with kidney failure now in MA is slightly over 30%. Before this change, we were right around 23%, so even in the first year, we saw a pretty substantial jump. I would expect to see that increase continue in the years to come.

Emily: Thanks so much for that background, Matt. It’s always interesting to hear about those trends toward MA, and the payment models trying to innovate reimbursement structures and delivery of care. We’ll talk about those in greater detail in the next episode, but I’d like to learn more about the shift to MA. What is the plan’s perspective? Is there anything that’s problematic about this new wave of patients that they’re taking on?

Matt: Plans are certainly focused on this population and this change. They are a highly complex patient population. ESRD is often linked to several comorbidities and is also a costly condition. The amount of spending for patients with ESRD is about 8 or 9 times the per-patient spending for those without kidney failure, so plans are certainly focused on it.

The payment system itself is different for patients with kidney failure in MA. Avalere has done some analysis around the adequacy of that payment system. We found that in many areas of the country, the payment rates to MA plans are actually lower than fee-for-service costs for that same population. We looked at large metro areas around the country and in 10 of the top 15 areas in terms of highest numbers of kidney failure patients, the MA payment rates are below fee-for-service costs, which could be a significant challenge for MA plans looking to design a benefit structure around these patients.

We also know from the Medicare Payment Advisory Commission (Medpac) that MA plans often pay rates higher than fee-for-service. So, plans in many areas of the country are essentially getting squeezed on both ends—the payment side as well as the cost side.

As we see more of these patients move from fee-for-service to MA, there’s going to be a lot of concerns from plans around the adequacy of payment for this population and the effect of care delivery to those patients, as well as the larger benefit structure that the plans are offering to all their beneficiaries. In many instances, if a plan is paid inadequately for ESRD patients, they will have to adjust their larger benefit package, say with supplemental benefits for all their enrollees, to make up for that difference.

These are some really important issues that plans are trying to grapple with as we live through this transition.

Emily: Thanks so much for that interesting perspective, Matt. I think that’s a natural segue for us to talk about where payers are going for assistance, because it’s clear that they’re going to be navigating some challenges in this new environment. Jack, can you talk about who is helping payers navigate some of these difficulties?

Jack: Absolutely. As we alluded to in the first episode, we’re seeing kidney care specialty companies like Somatus, Cricket, and Strive at the center of various quality improvement initiatives. Given their increasing liability in this space, payers have been interested in partnering with these entities as patients shift from traditional fee-for-service to MA. Payers are looking for ways to better manage these patients, offload risk, and ultimately reduce the overall cost of care.

These kidney care management companies are taking their own unique approaches to address care gaps and improve outcomes by using data analytics, care coordination, and disease management solutions. The focus is to better identify patients earlier in disease progression and prevent patients from crashing into dialysis. At a high level, the objectives of these organizations are centered around understanding delayed referral to a nephrologist, improving patient engagement and management through home visits and holistic approaches to care, and focusing on care coordination, recognizing that patients with CKD often have complex medical conditions. They also focus on increasing patient education to ensure that patients understand their treatment options, including the possibility of home-based dialysis and transplantation. It is also important to note that these organizations are likely to continue to evolve their capabilities over time as they learn which approaches were successful and which were not.

Emily: Thanks so much for that, Jack. It sounds like these organizations are aligned with the innovations happening in the market and at the policy level. Can you speak to what if any impact they’re having to date?

Jack: It’s hard to say, since many of these organizations are still relatively new. It will take some time to scale and gain market share. They’re all trying to find their footprint in the market, and they’re well-positioned to do so as care coordination continues to be a major focus for payers.

Emily: Thanks so much, Jack. One last question for both of you. What should we be tracking in the policy space for the remainder of 2022? Matt, I’ll start with you.

Matt: Well, first, on the payment rate issue, in CMS’s recent advance notice, while they didn’t propose changes to the payment methodology for ESRD patients in MA, they did acknowledge for the first time that they’re studying the issue. They put out some data on the potential impact of a change to the payment rate and they solicited comment from stakeholders on the direction that the agency should take. So, I think understanding where CMS is going to land on the payment rate issue, and if they do make major changes, that is the number one issue to watch in this space as it relates to MA.

The second issue is this continued trend around where these patients go in terms of MA, not only shifting from fee-for-service to MA, but which plans are patients with kidney failure more attracted to. Are there certain types of benefit structures that patients are more likely to enroll in versus others? This is important not only from a patient perspective and from a plan perspective, but also for other stakeholders who are involved in this space and want to understand the care patterns and potential challenges and opportunities that this patient population presents.

Jack: This is less of a policy initiative, but we will need to continue to look out for the kidney care specialty companies and track how they’re doing. It will be interesting to see which of these companies succeed in reducing costs by providing improved care to patients.

Emily: Thank you so much, Matt, and Jack. I really appreciate your time today. For those listening, stay tuned for the next episode as we do a deeper dive into the CMMI alternative payment models. Thanks for tuning in. If you want to learn more about our work, go to www.avalare.com.

The post Exploring the Kidney Care Environment, Part II: Policy and Payment Trends appeared first on Avalere Health Advisory.

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Transcription:

Mark: Hi there and welcome to another episode of Avalere Health Essential Voice. My name is Mark Gooding, and I’m a Principal in the Market Access practice here at Avalere.

March is National Kidney Month, a time to raise awareness about chronic kidney disease (CKD) and ways in which patients and other stakeholders can play a role in supporting kidney health. Today’s episode will be the first in a miniseries focused on the evolving kidney care landscape. Here at Avalere Health, we partner with stakeholders across the healthcare spectrum to focus on some of the key issues in this space, including the unique end-stage renal disease (ESRD) payment system, the evolving payer and provider landscape, and new care delivery models that are highlighting opportunities to reduce gaps in health equity.

I’m excited to be joined today by two of my colleagues—Jack Fagan and Emily Belowich, two consultants in our Market Access practice. Today we’ll discuss the treatment and payment landscape as well as the patient population.

Emily, can you get us started with an overview of this patient population, some of the key considerations, and the challenges that they face.

Emily: Thanks so much, Mark. I’m happy to. There are a couple of things I want to call attention to in order to set the stage.

First is the CKD and ESRD population. Currently, more than 37 million Americans have CKD, which makes up about 15% of the adult population. This number is likely an underestimate, since CKD is often not detected early enough. Importantly, CKD disproportionately impacts minority populations, specifically predominantly Black and Hispanic individuals who are at a higher risk of prevalence of CKD than non-Hispanic Whites. The disease is also vastly more common in individuals with diabetes and self-reported cardiovascular disease.

There is a substantial economic impact to treat patients in this population. The annual cost of treating ESRD Medicare beneficiaries is about $36 billion per year. So, patients have a poor quality of life, they have trouble accessing care, and there’s a disproportionate impact on minority populations.

The other thing I wanted to call attention to is where we are in our current healthcare system reform. We’re still trying to dig our way out of a fragmented healthcare system where there are misaligned payments, rising costs, a lack of information, and variable treatment options. We’re seeing an increased focus on a shift to a system that’s driven by value, one that revolves around affordable healthcare, transparent information, efficient incentives, and optimal treatment. This is a new paradigm where we’re trying to figure out the world of reimbursement aligning with a value-based healthcare system that focuses on quality.

I bring this up because CKD and ESRD fit smack dab in the middle of this. Driven by the Affordable Care Act (ACA), Centers for Medicare & Medicaid Services (CMS) and Center for Medicare & Medicaid Innovation (CMMI) are focused on driving innovation in the kidney care space. There is increased attention on prevention in the ESRD space because by the time you’re an ESRD patient, you have limited treatment options and a poor quality of life. Even though Medicare will eventually cover the cost of your treatment, it’s costing Medicare, i.e., taxpayer dollars, a lot of money for you to live.

It’s important to note that the US kidney care system is lagging behind other countries when it comes to mortality rates, optionality for treatment, and transplant rates. We’re looking to create incentives for healthcare professionals to provide more coordinated, high-quality care in the current environment.

Mark: Thanks so much, Emily. That’s helpful in understanding the patient population and some of the unique challenges that they’re facing. You mentioned the size and the unique care challenges. Those are some really astounding numbers—20% mortality rate for individuals in their first year of dialysis, and then thinking about the cost of dialysis itself. Less than 1% of the Medicare population is on dialysis, but those patients represent about 7% of program costs.

Now, when we think about dialysis or kidney care in the US, we often think about the dialysis bundle. Jack, what is this Medicare bundle? How is it organized and what are some changes we’re seeing in recent years?

Jack: Thanks, Mark. I find ESRD reimbursement dynamics to be really interesting. Back in 2011, CMS shifted from a traditional fee-for-service approach to the Medicare ESRD bundle where CMS provides a per-patient per-treatment rate. This bundled rate includes a variety of services that are used incident to dialysis. This includes supplies, equipment, labs, Part B drugs, and some part D drugs.

CMS has also developed 2 adjustments that provided a limited period of add-on payment for new products to promote innovation and assess utilization before being brought into the bundle.

First, there’s Transitional Drug Add-on Payment Adjustment (TDAPA) for drugs. Then there’s Transitional Add-on Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES) for devices, equipment, and supplies. These payment adjustments are similar, but for TPNIES, CMS requires manufacturers demonstrate significant clinical improvement over the standard of care. CMS has changed requirements and timelines for these add-on payment adjustments consistently in rulemaking. It’ll be interesting to see if CMS opts to propose any changes to reimbursement mechanisms or requirements this year in rulemaking.

Mark: That’s helpful background on this per-patient per-treatment, bundled system, understanding that it’s a relatively young payment system and the changes we’ve seen in recent years, at least in terms of creating payment designations, should incentivize innovation and investment into this space.

Outside of the Medicare payment system, who are some of the other key stakeholders in this treatment area, and is there anything that you’re watching in the year ahead?

Jack: When you think about the dialysis market, you have to start with large dialysis organizations (LDOs), given their ability to dictate treatment protocols within this space. Payers generally have a lack of influence over specific treatment decisions but have started to take a more active role in managing costs upstream.

There have also been a lot of new entrants in this space in the past couple of years. These new kidney care specialty companies are looking to disrupt the established market through new data-driven patient recognition approaches and providing additional care management services to patients, which aligns broadly with what payers are trying to do in this space as well. I’m interested to see how these new entrants like Somatus and Strive will evolve and expand over the next couple of years.

Mark: Thank you, Jack and Emily, for sharing this information. It’s really helpful as we think through, who is the patient population, what’s the role of Medicare, particularly with the dialysis bundle, and who are the other stakeholders that are really driving patient identification and patient treatment, whether that is ESRD, CKD, or kidney transplantation.

Thanks to you both and thank you to everyone who tuned in today. Please stay tuned throughout March as we have additional conversations as part of this Avalere Health Essential Voice miniseries. If you would like to learn more about our work, please visit us at Avalere.com.

The post Exploring the Kidney Care Environment: Key Players, Treatment, and Payment Systems appeared first on Avalere Health Advisory.

If you would like to watch the video version, please visit our video page.

Transcription:

Connie: Hello and welcome to another episode of Avalere Health Essential Voice. Our podcast show covers a wide range of healthcare topics. My name is Connie Jorstad, and I’m an Associate Principal here at Avalere and I lead our HIV policy work.

I’m happy to be joined today by Dr. Stephen Lee, the Executive Director at the National Alliance of State & Territorial AIDS Directors (NASTAD), where he oversees their programs, which include healthcare access, prevention, hepatitis, drug user health, health equity, policy and legislative affairs, and health systems integration. His experience as a physician gives him a practical perspective to policy and program implementation. Prior to joining NASTAD, Stephen was a global HIV expert for the Elizabeth Glaser Pediatric AIDS Foundation, where for 13 years, he managed the development and implementation of programs that provided prevention, care, and treatment services to individuals affected by HIV.

We’re also joined by Beth Crutsinger-Perry, who’s serving as NASTAD’S Board Chair this year and is the Director of Washington State’s Office of Infectious Disease, where she provides leadership, direction, oversight, and vision for the Office of Infectious Disease programs, which include the state’s AIDS drug assistance program (ADAP), the PrEP DAP, the hepatitis C and drug user health program, HIV community services, and sexual health and prevention. Beth has 26 years of experience in infectious disease administration programs and management.

In today’s episode, we’re going to look at how state policies have changed as HIV prevention and treatment have advanced, and how social determinants of health and other systemic barriers are key to addressing health disparities and ending the HIV and viral hepatitis epidemics in the US.

Stephen, Beth, it’s great to have you both join us for this episode of Avalere Health Essential Voice. For those of you who don’t know, NASTAD is the national organization that represents state, territorial, and local health department HIV and viral hepatitis programs. NASTAD was formed in 1991 when advocacy at the federal level for policies that supported HIV prevention and care was high. The Ryan White HIV AIDS program, as it’s now known, was just getting started and treatments for HIV infection were difficult to administer and tolerate. Prevention consisted of individual and group-level behavioral interventions. HIV test results could take weeks to come back, often resulting in people not returning for the results and being unaware of their status.

Prevention, testing, clinical care for HIV, and policies related to HIV have changed a lot in 30 years. In particular, we’ve seen a shift toward more biomedical interventions including pre-exposure prophylaxis (PrEP) and an understanding that sustained viral suppression or achieving an undetectable viral load eliminates the risk of transmitting HIV, which is what we refer to as U=U (undetectable equals untransmissible).

Beth, the theme for your Chair’s Challenge this year is 30 Years of Leading Change. I’m interested in hearing from you how state health departments have been able to keep up with all of the advances in the last 30 years. What have been some of the most significant challenges and what successes have you seen in program implementation and policy?

Beth: Thanks, Connie. Thanks for the opportunity to be here. This is a really big question. I’m very proud of NASTAD’s history and 30 years of change. It has been a constantly changing environment. When I ponder this question, I really think about successes and challenges simultaneously, especially from a state health department standpoint. For example, we were so excited about the Affordable Care Act and its implementation in 2014. However, that success creates significant challenges for a state AIDS Drug Assistance Program (ADAP), or a Ryan White program.

When you’re in the state system, making these shifts and pivoting as the condition has changed and science has evolved have been a struggle, yet we find so much success in making the change. It can just be a glacial movement sometimes from a system standpoint.

Some other important policy efforts have streamlined our work over time. I remember the Ryan White reauthorizations of 2006 and 2009. Incredible changes happened to the statute for Ryan White at that point. When we think about those reauthorizations and the learnings that happened to make those law changes and make it easier in the states and communities to be able to implement access and equitable services, those were really important.

Obviously, the Affordable Care Act was intended to expand access and give individuals who were in many instances dependent upon the Ryan White program more comprehensive healthcare coverage. I think the struggle was the diversity of implementation across our country. It wasn’t comprehensive implementation, so what was successful in some jurisdictions continues to be a struggle in others. I think the inequities across our country are significant challenges in all of these policy implementations.

We have also watched funding fluctuate over time. Certainly, with reauthorization, there were changes in funding. We have seen fluctuations as funding formulas have changed at CDC. Some states win and some states lose. Those have always been implementation struggles and challenges and yet we have continued to evolve through them and found ways to braid our funding in a way to keep our services afloat.

I also can’t avoid talking about the ADAP waiting lists, which was a very difficult time in our history. Prior to Medicaid expansion, we watched states put folks on lists who were not eligible for their services, so they went without those services. NASTAD was tracking those names and I can tell you that at one time, we were tracking the number of individuals who died on those waiting lists. It was a very difficult time in our history, but one that I think has been an important touchstone to make sure, along with our partners at the Health Resources and Services Administration (HRSA), we have moved in a direction to avoid those difficult times in the future.

I think we learn from these challenges as best we can and try to make things better. I do believe we’ve done that from an ADAP standpoint. Data requirements have changed over time. We want to see these data changes happen, we want to have good data, but at the state and city level, those are systems that have to be changed. Even adding simple data elements can be quite challenging for state and city systems. So while, again, success is better data that creates a better way of knowing who we’re serving and who we’re not serving and who we should be serving, implementation of those innovations can be quite long term and expensive.

Watching HIV go from a death sentence to what many of us refer to now as a chronic condition has certainly been a success. Infectious disease doctors led the way for the treatments and today, many people are being effectively served, managed, and virally suppressed through primary care, through federally qualified health centers, through Part C clinics, and not having to depend only on a limited set of infectious disease docs. That has been a success.

The last thing that I’ll say is the systems that we have built through these policy and program implementations have done an excellent job of building up a comprehensive system of care. However, I think that system serves White people much better than it does Black and Brown populations. We have not done a good job in these implementations and these policy changes to serve everyone and provide access to everyone and I think that’s where our challenge is now.

Connie: Beth, I really appreciate the insight that with every success comes another bunch of challenges. Certainly, program implementation at the state level and understanding the interplay of state policies and regulations and laws with federal or clinical advances is a challenge to navigate.

Stephen, we’ve certainly come a long way. I would be interested in hearing your perspective from the national level. What are some of the biggest challenges for HIV prevention and treatment moving forward? Are there some policy changes that can possibly address those challenges?

Stephen: Thank you, Connie, and thanks to Avalere for inviting Beth and me to participate in this podcast. So, as you’ve mentioned, we’ve seen significant improvements in the continuum of care for HIV in terms of testing, prevention, and treatment.

In testing, we’ve got more accurate rapid point-of-care tests available, and we now have PrEP in our prevention toolbox. We don’t do this as much here in the US but globally, there is the dapivirine vaginal ring that puts prevention and control of prevention in a woman’s hands. We also have prevention of mother-to-child transmission and medical male circumcision.

On the treatment side, we’ve got simpler, once-a-day regimens that really improve outcomes.

Where the challenge is now is making sure that people have access, that there’s equitable access to all of these tools. Sexism, racism, stigma, discrimination, and the criminalization laws that exist are real barriers that limit the impact that these opportunities have for people who are in marginalized populations.

Beth and I didn’t coordinate our responses, but some of the things that I’ve thought about fit really nicely with some of the things that Beth just talked about. Financing for example—how we currently finance and support our health departments. We need to see a paradigm shift in how that happens, from increased funding to more flexibility to trying to break down silos across funding portfolios.

We need to be proactively engaging communities in the response, which means not just doing lip service to say that folks are at the table. Are they participating in discussions around how policies and programs are designed, how they’re implemented, how they’re evaluated? Are those individuals representing the BIPOC community, the Black, Indigenous, and People of Color communities that are most impacted? We also need to diversify the workforce. Beth mentioned the clinical workforce, but we also need to think about social workers, pharmacy technicians, mental health workers, and people who are working with substance users and make sure they reflect the communities that are most impacted by the epidemic.

Finally, building again on what Beth mentioned, there is the data piece. I appreciate that the data challenges are immense in terms of actual implementation, but we do need the data of who is affected, who is accessing services, and who is not so that we can then adjust our resources, whether it be financial or human resources or programmatic interventions.

Connie: Right. So, a lot of what you’ve mentioned about moving forward really resonates with my next question, which is in reference to the national HIV AIDS strategy, which was just released. A lot of the things that you’ve articulated—stigma, racism, the criminalization laws—all those things have been mentioned in the National HIV/AIDS Strategy (NHAS) as things that need to be addressed. So, it’s great to see that there’s some consistency across the HIV policy realm.

One of the other things that the NHAS mentions is the need to address this syndemic of HIV, viral hepatitis, substance use, and mental health, and that doing so is critical to reducing new HIV and viral hepatitis infections. Harm reduction, including syringe services programs, is an important strategy to meet the health needs of people living with one or more of those conditions. I know that this is something that NASTAD and its members are thinking a lot about. I’d be interested to hear your thoughts about how you see addressing this syndemic at the federal level, and what NASTAD is doing to support that work. Beth, do you have some thoughts about ways that states can contribute, either in policy or in programs?

Beth: Stephen, why don’t you take the federal response first?

Stephen: Sure, I’m happy to do that. You’ve touched on many of the things that I think are important for us to address this syndemic. Starting with funding, we have to ensure that we are actually funding the diseases. HIV is relatively well funded, though there’s always room for additional resources, but we also need to ramp up funding for hepatitis, sexually transmitted infections, drug user health, and harm reduction programs. Those are programs that all need increased funding for us to really address the syndemic nature of the diseases. We also need to break down the silos of funding and allow for flexibilities across how those resources can be used in terms of program implementation.

Connie talked about some of the policy challenges and mentioned a big one, the needle exchange and syringe services programs. That’s one of the big policy challenges that we need to look at and address, both at the federal level and at the state and local level levels in terms of ensuring that we are using all the tools in our toolbox to address those diseases.

Another big policy area that I would suggest we need to focus on is the HIV criminalization laws because they serve as barriers and create fear in individuals about knowing their status and engaging with the healthcare system to get either prevention care or treatment services. Looking at funding policies and allowing for flexibilities across programs will allow for a holistic and multifactorial approach to syndemics.

Beth: Yeah. Thanks, Stephen. I agree with all of those items. I would add that from a state and city perspective, some of my peers in other jurisdictions have already begun this work and are trailblazing for the rest of us. We’re watching and learning from their experiences.

In Washington, we have begun reviewing our planning process and our funding efforts from a syndemic lens. We’re just at the beginning stages of this but we’re trying to innovate our planning process to include the syndemics and to include community engagement from all participants, not just HIV. Our planning in the past has been HIV care- and prevention-specific, and this time we’ll be looking at it from a broader perspective. We have less experience in it and community engagement from a state perspective continues to be a challenge. We continue to struggle to engage with our communities in a genuine way, so this is an ongoing lesson that I think we will have to expand through the syndemic approach to additional communities that we have not accessed in the past.

I think the braiding of funding is a big deal and I think that what Stephen said is very true. We have a lot of money to support HIV, and in some ways we have flexibility with those funds and I appreciate our federal partners who have found ways to give us some flexibility. However, all boats are not equal in this ocean. You really have to be able to look at some additional dollars or creative ways to use dollars to support hepatitis and STI work. I think that we are often limited in our innovation by the resource restrictions, either not enough money or money that can only be spent a certain way or on a certain population. I think that quashes our innovation a bit when we’re thinking in terms of a syndemic effort.

To me, it’s not genuine if it’s not equal. Right now, it is not equal in funding resource. So, I think we have to look at ways to raise all of those dollars in an equitable fashion so that we can actually provide a comprehensive set of services for all people across the syndemics.

I think the other struggle I have seen in the state is, how do we prepare our partners for this kind of work? Many of our partners are quite siloed in their effort, often because of how states have funded programs. So, maybe they only know how to do HIV screenings and not STI screenings. Maybe they only really focus on hepatitis or syringe services programs because we haven’t given them the resources and the training and the capacity building to do that. So, how do we prepare our current partners?

Then, how do we find new partners who have been doing some of this work, but we just haven’t engaged with them? From the state and the city perspective, that’s our challenge—finding those partners and being a good partner so that we can serve populations that we haven’t been serving well, but perhaps they have.

The other thing I would say is that even in our limited work in Washington, I have heard that this idea feels hard for people living with HIV. They feel de-prioritized and lack attention, and I think are fearful that this broader approach could limit their services. Certainly, we don’t expect that to be the case, but I think we have to be sensitive to the messaging to communities because it can be scary to think that resources could be limited to their population in a way that perhaps they haven’t before as we all try to work through the evolution of this. I think the messaging from the national level is really important because it gives credibility to what some of us are saying at the state and city level, but how we implement is going to be different, state to state and community by community.

Connie: Yeah, thanks. Funding is always an issue in the HIV space. Much of our policy advocacy every year is about funding appropriations. Some of the other things you’ve talked about, like engaging stakeholders at all levels, is really about meeting people where they are. It’s something that we like to say, but it’s both meeting them literally in the communities in which they are living, but also figuratively in terms of recognizing some of those things that you were saying about how an intervention or communications are being received.

That brings us to social determinants of health and health equity issues, which are also prominently featured in the national HIV/AIDS strategy. NASTAD has a long history of promoting health equity by addressing health disparities. I’d be interested in hearing your insight about how the Biden administration’s emphasis on equity can help advance HIV prevention, care, and treatment looking forward. What are the opportunities here in HIV and viral hepatitis in particular?

Stephen: One of the things I really appreciate about the new strategy, and I heard our new Office of National AIDS Policy Director Harold Phillips speak about this, is ensuring a whole-of-government approach. I think that’s really important, especially if that whole-of-government view uses the lens of racial equity and health equity. So, it’s ensuring that the Department of Justice is at the table as we talk about HIV criminalization. Let’s make sure that the Department of Labor is at the table as we talk about poverty as one of the major social determinants of health. Let’s make sure that the Department of Housing and Urban Development outside of Housing Opportunities for Persons With AIDS (HOPWA) is at the table as we talk about housing. Housing is probably one of the biggest challenges as a social determinant of health.

So, we want to make sure that other federal agencies are at the table and developing strategies and operationalizing the national HIV AIDS strategy from their lens, making sure that that lens has equity with it, whether it’s a racial equity, ethnic equity, or health equity lens.

We’ve talked about funding and certainly this year, the Biden administration is proposing $670 million to ending the HIV epidemic (EHE). That’s great, but we also want to make sure that that funding gets directed toward BIPOC communities. We want to make sure that academic researchers at Black-led institutions are applying the lens of equity in their research designs, and as I’ve talked about before, ensuring a diverse workforce as it is developed with those resources. As we talk about engaging communities, the third area is around making sure that the individuals that we’re engaging reflect those BIPOC communities.

The final thing I would mention is around public/private partnerships and really taking a broad view of them, that is, big public/private partnerships as well as local public/private partnerships at the community level. Who are we engaging with in terms of religious groups, philanthropic organizations, the pharmaceutical industry, healthcare systems, the public health system, health insurers, academic institutions, etc.? So, taking a broader view of public/private partnerships, and again, making sure that those partnerships come with a focus that is rooted in health equity and racial justice.

Connie: Thanks. Beth, do you have anything you’d like to add?

Beth: Well, you know I always have something to add, but Stephen covered it pretty well. I would add, let’s build some accountability. I think the inclusion of equity at the federal level speaks volumes to what we should be doing at the state level. I’m very fortunate to be in Washington State where our governor has already established an Office of Equity and where our Secretary of Health has equity as one of our agency priorities, so I feel very fortunate to be surrounded by this support.

We can say these things, but if we don’t measure and report them and hold ourselves accountable, and transparently so, I’m not sure we’re going to make a lot of movement. As I said early on, I believe that the system of care we have created on both prevention and care for HIV is very effective and very comprehensive for those people who will go to the doctor and who understand how to manage the healthcare system, who have faith and trust in that system and the resources to use that system. So, I don’t want to lose that. The folks who aren’t going to use the healthcare system, many of whom are in BIPOC communities, have got to be reached another way.

So, we need to hold level what we have and dig deeper for those populations who need a different approach. Is that a mobile approach? I hearken back to the case management days of home visits and mobile food delivery, all of those things that we did in the 90s because it’s how we got our work done. We walked away from that and into this kind of “you come to us” way of doing business. That works well for those for whom it works. It does not work for everyone, and it cannot be the only answer. We must innovate. Maybe we do need to take a lesson from our past and work with those communities to determine how best we can meet their needs. Where can we meet your needs, with whom can we meet your needs if it’s not us?

The only other piece that I would ask us to always consider is the lived experience. I believe that using the lived experience in our workforce, valuing lived experience at the state and city employment levels, perhaps over formal education, to inform our work will allow us to have a better relationship with our communities and to really tear down the parts of our system that are creating some of these access barriers. We need to figure out ways to bring folks into the system to help us tear some of that down. So, I look forward to being able to do that, but I will say that it’s very hard work and it’s not system work. It’s individual personal work and I challenge us all to take that work on personally and systematically.

Connie: I really appreciate how you brought us full circle back to the 90s when interventions were markedly different. There’s perhaps an opportunity to take some of the lessons learned and apply them today.

I want to thank our guests once again. Stephen, Beth, thank you so much for joining me today, and thank you all for tuning in to Avalere Health Essential Voice. Please stay tuned for more episodes. If you’d like to learn more, please visit us at our website www.avalere.com.

The post HIV/AIDS Prevention and Treatment, Part II appeared first on Avalere Health Advisory.

If you would like to watch the video version, please visit our video page.

Transcription:  

Connie: Hello and welcome to another episode of Avalere Health Essential Voice. Our podcast show covers a wide range of healthcare topics. My name’s Connie Jorstad. I’m an associate principal here at Avalere and I lead our HIV policy work.  

I’m very happy to be joined today by Carl Schmid, who is the executive director at the HIV + Hepatitis Policy Institute. Carl is no stranger to people who work in HIV and viral hepatitis policy.  

For our audience who may not know Carl, he has been a national policy and advocacy leader in the HIV community for over 20 years and has recently served as the co- chair for the President’s Advisory Council on HIV and AIDS or PACHA.  

He brings extensive expertise in healthcare financing systems, including Medicaid and Medicare, and leads efforts to ensure implementation of the Affordable Care Act meets the needs of beneficiaries, including access to medications and preventive services.  

In today’s episode, we’re commemorating World AIDS Day. This year’s theme is equitable access in everyone’s voices. Today we will be discussing how HIV prevention and treatment policy influence broader health policy issues and vice versa.  

Carl, it’s great to have you join us for this episode of Avalere Health Essential Voice.  

Carl: Great. It’s good to be here.  

Connie: I’d like to start our conversation on federal efforts around ending the HIV epidemic in the United States. The Ending the HIV Epidemic in the US or EHE was introduced in 2019 and it continues to be a priority for the Biden and Harris administration.  

The aim is to reduce the number of HIV infections in the US by at least 90% by 2030. It’s built on four pillars. First to diagnose new infections as early as possible.  

Two, treat HIV rapidly and effectively to achieve viral suppression. Three, prevent new HIV transmissions by using proven interventions such as PrEP and syringe service programs. And fourth, respond quickly to potential HIV outbreaks.  

In the second year of program implementation. How are things going and what are some of the barriers to program implementation?  

Carl:  Yeah, well first of all, as you said, it’s a priority for the Biden administration and that’s good news because this was started in the last administration and putting forth a real increase in funding to make sure all those things occur.  

Congress has gone along with that in a bipartisan fashion, and our goal was to make sure that that was continued under the Biden administration and they have fully embraced the Ending the HIV Epidemic.  

And then I’m going to say, and then some, and we could talk about that. And so I think in Congress as again going forward in approve the funding for the next year. So I think that to have the leadership and to have the resources behind it.  

And now with the Biden administration, I think we have some right policies as well, maybe some better policies. But we did have COVID and that really did put a monkey wrench in a lot of the activities.  

You could just imagine that anyone involved in HIV, infectious disease in the delivery of healthcare and also at the planning in the state and local governments, who were involved in HIV.  

They were all called in to work on COVID, including in our government leaders like Tony Fauci and people at the CDC. So that did take away the attention needed and the resources that we needed.  

But even despite COVID, yes, I know that HIV testing went down, some linkage to care went down, new starts went down, but people adopted and there was a pickup on self- testing for HIV.  

There was a pickup on telehealth. So I was happy to see the Ryan White program come out with meeting their goal of increasing and getting people re- engaged in care. Their goal the first year was 18 ,000 and they got 19 ,000 people, and that was during COVID so I’m pretty optimistic about the future too.  

Connie: I appreciate that. As you’ve already alluded to in our audience is aware there have been some transitions in health policy during this first year of the Biden administration in terms of framing. And I’d be interested to hear from you, what are some of the most significant policy levers in the HIV prevention and treatment policy space, and how do you see shifts such as a shift to a focus on health equity and social determinants of health influencing some of those policy opportunities?  

Carl: Yeah. And those are all positive developments. So first of all, some policy changes that we’ve seen is really a focus on the Affordable Care Act, making sure people have healthcare coverage because if they don’t have coverage, how are they going to get access to testing?  

How are they going to get access to treatment and prevention services? So there’s been a real shift in the Biden administration to make sure the ACA works, and that includes Medicaid expansion as well, and then making sure people are enrolled.  

They really had all these open enrollment periods and they’re making healthcare more affordable for people, particularly the premiums. So I think that’s number one. And then the focus on the structural interventions and social determinants of health, race and equity.  

How could you not address those issues When it comes to HIV? If you look at the community’s most impacted, gay men, black and Latino people, black women, drug users, and there’s been a real focus on race.  

And I’m so glad that the new Strategic Plan that’s going to come out really takes on these issues of race and the social determinants of health, adding those in. Also, a focus on the Affordable Care Act they’ll talk about, but it is looking at racism and addressing homophobia and on transphobia and a real focus on housing.  

So I think because it takes all those elements to get it right to really… I mean, it’s one thing to say that we’re going to end HIV, we’re going to increase testing, we’re going to increase treatment, but it needs to look at the whole person and look at all of society to make sure it really is going to happen.  

Connie: And you’ve mentioned the National HIV Strategic Plan, which is to be released imminently. And the recently reconstituted Office of National AIDS policy is in the process of updating that, they’ve characterized the approaches all of society, whole of society.  

At the most recent meeting of PACHA and your last meeting as co- chair of the PACHA, there was a great interest in this approach and several members including yourself had indicated you were very interested and eager to support efforts to engage private sector.  

And you expressed a willingness to lead some of those efforts. I’d like to give you a chance here to tell us how that work is going and what sorts of opportunities there might be for the private sector audience members.  

Carl: So this really came from a request from the White House that they wanted to include the private sector in the Ending the HIV Epidemic Initiative. It’s great to have your community partners, it’s great to have the federal government, but if it’s really going to be a whole of society approach, you need the private sector as well.  

So it was their idea to add these added resources to achieve the goals of ending HIV. And so we did do a subcommittee meeting, and then we had a full committee look at this as well.  

And we wrote a letter to the Secretary of Health saying,” We would like you to facilitate a private sector component of ending HIV.” And this is not just to bring in the companies involved in HIV, but all other companies involved in healthcare, pharmacies, health insurance companies, medical providers.  

But then we want to go further. What about all the people who have large employee bases that are impacted by HIV? What about influencers like Facebook and the other high- tech companies? They should all have a role in ending HIV, the media, other nonprofit foundation.  

And I really think their involvement could help with addressing the stigma as well. It would be great to have their resources, but I think if a large company is talking about HIV, I think that’s good and it helps address the stigma that we still have, so sadly associated with HIV.  

So I think this is going to be a component of the new strategy that’s coming out, and we called for a creation of a task force. So hopefully this will get started next year. And that private sector involvement in private sector players could get involved through this creation of the task force.  

So stay tuned. I think it’s really an exciting component. There’s so many opportunities. You could look at it at the national level, but what about the local level as well? Because we have these community plans to end HIV, but I think there’s a need for the private sector to play at the local level as well.  

Connie: I appreciate hearing you say that. As I have a background in state policy in particular around the Ryan White HIV AIDS program. So hearing the importance of addressing community engagement at all definitions of community at the local and state level is important as well.  

Are there any sorts of interesting policies, proposals, or things that you see happening or being considered right now that would be in support of the Strategic Plan?  

Carl: Yeah, so I have great praise for the way the direction is going right now. We need continued resources, but the one gap that I see is really a focus and a payer for PrEP.  

We have the Ryan White program for underinsured and uninsured people living with HIV, but we don’t have a corresponding program for PrEP for people at risk of HIV. We’re doing some funding through community health centers right now for PrEP, and it’s going really well and we need to expand that.  

But we really need a greater focus on PrEP. And as you mentioned, that’s one of the three pillars of the ending, the HIV epidemic. And there’s so many exciting things happening in the field of PrEP. There’s going to be new drugs on the horizon, but we need a greater focus for both education of the community because especially in certain communities, the uptake is very low.  

And we need provider education as well. It takes a provider to prescribe PrEP and particularly in the south, and the doctors are going to have to talk about some issues that they may not talk about with their patients, but it’s really necessary.  

And then we need payers for PrEP. Of course, if you have private insurance or Medicaid or Medicare, it should be covered. But what about people who are uninsured or underinsured? So several of us are working with members of Congress right now.  

There’s some bills that have been introduced to create a national PrEP program, and we’ve been talking to the administration as well. There’s things that they can do, they could put forth more funding. But PrEP is, even though one of the drugs has been around for 10 years, I still think that we’re at the infancy of PrEP and there’s going to be a lot more excitement on the horizon.  

But we need to make sure that the federal government is there to support these programs and amplify these programs so that people, the right people can gain access to PrEP.  

Connie: Great points. So one of the broader health policy issues that seems to be on a lot of people’s minds these days is drug pricing reform. And I’d be interested in hearing from you how you see that debate impacting not just HIV and treatment policy, but people who benefit from HIV treatments and prevention.  

Carl: Well, of course, we always want lower drug prices, and it looks like Congress is trying to address that. And there’s a lot of different components to what goes into a drug. I think what matters most to patients is how much they pay for their drugs.  

And that’s what I spend a lot of my time on is how much cost sharing, how much a deductible. I mean for a family it could be up to 15, $16,000 a deductible. And we have co- insurance, and it seems that always the HIV drugs have co- insurance.  

They’re always on the highest tier. And so I try to focus on those issues. I think PBMs have a role in this as well in the rebate situation. So I think yes, Congress is starting to look at some things, but I really think there needs to be reforms in all parts of the system.  

But I think transparency, there’s efforts to increase that with the PBMs and drug pricing. But I realize that we need a healthy, I think we’ve all realized we need a healthy pharmaceutical industry.  

Look what it’s done for HIV. Look what it’s still doing for HIV and the promises ahead with long- acting agents for both prevention and treatment, and look at the cures for Hepatitis C and so many other diseases.  

But it all comes with a cost. And I just think if people put out the facts and understand things, being a little more honest and looking at the whole equation, hopefully Congress and the administration can make some progress on this issue.  

But what matters most to patients is how much they pay at the pharmacy counter.  

Connie: Yep. And I think you made a very good observation that there’s been a lot of advances in the HIV treatment space, hepatitis C treatment space in a relatively short period of time.  

I remember all of these advances, and it’s very exciting to be a part of this work today. I guess I’d give you one last opportunity to share any parting thoughts for our audience, things that you might be reflecting on as we’re approaching world AIDS today.  

Carl: Well, I think Connie, you said it well, we’ve been through a lot the last 40 years with HIV, and then we’ve seen such great progress, and there’s so much more to have in the future. But it is going to take leadership, it’s going to take a concerted effort, and it’s just not the HIV community, it’s just not the government and let the national and state local levels, but the private sector as well.  

And so I think we may have some great technology coming our way. We have some right now, but we need to make sure we get it to the people. I mean, look at hepatitis C, you mentioned we have a cure there, but there’s still so many people that don’t even know they have hepatitis and let alone get cured.  

So there’s still a lot of work to do and I look forward to working with you and others to make sure that we achieve an ending HIV.  

Connie: Great. Well, thank you again, Carl for joining me today. And thank you to all of our audience for tuning in to Avalere Health’s Essential Voice. Please stay tuned for more episodes.  

And if you’d like to learn more, visit us at our website at www.avalere. com. Thanks.  

The post World AIDS Day: HIV/AIDS Prevention and Treatment appeared first on Avalere Health Advisory.

Transcription:  

Sarah: Hello and welcome back to another episode of our Avalere Health Essential Voice Series, focused on Medicare Part D. My name is Sarah Butler and I’mthe Head of Client Solutions Marketing and Operations here at Avalere.

I’m joined today by two of my colleagues, Ryan Urgo, who is a Managing Director in our policy team, Neil Lund, who is a Senior Advisor in our market access team. And today’s discussion is going to focus on CMMI and where we can anticipate some activity in the coming year, particularly as it relates to the Part D program.  

So with that, I’m going to jump right in. Ryan, let’s start with you. So we have some new leadership at CMMI, which is really exciting. But so far, things have been pretty quiet. So just broadly speaking, where do we expect CMMI to be headed in terms of its strategic direction?  

Ryan: Thanks, Sarah. So things have been quiet, but I wouldn’t take that as a lack of future activity that we can expect to see. I do think that if we look at recent comments that Director Fowler has made about the strategic direction for CMMI and just the broad strategic review of existing models, it does point to a way forward for the Innovation Center broadly.  

We know that they have talked about really improving the focus and attention on underserved communities, and really using the demonstration authority that they have to improve health equity goals for the administration.  

We also know that the agency has talked about, or rather the Innovation Center has talked about streamlining the sheer volume of models that move through the center. And just focusing more on those models that address broad population- based health goals and improvements in value- based care.  

Sarah: Great. So recognizing those goals, Neil, what are your thoughts on some of the potential ideas that the agency could pursue?  

Neil:  Thank you, Sarah. Director Fowler has made some comments that indicates that she and the agency are questioning whether their primary goal is lowering drug costs.  

In fact, their kind of planting the seeds about broader structural change. And this could be important because it suggests new ideas, more creative models, a real structural change in the approach to the models.  

Sarah:  So Neil, do you anticipate that some of the initiatives implemented under CMMI during the prior administration will continue? And if so, which ones do you think are most likely to continue?  

Neil:  The prior administration had a heavy, if not exclusive focus on lowering drug costs. So, I do anticipate some changes here. However, I strongly believe the Senior Savings Model will continue.  

Because while it is heavily focused on lowering drug costs, it also contains some models around structural change for the program. So, that’s one that I really expect to continue.  

Sarah: Great. So you mentioned that the prior administration really focused on drug pricing. Where do you anticipate that this new leadership will really look to make its market at CMMI?  

Neil: That’s a great question and one that if we look at what’s happening in healthcare today, what a lot of the discussions outside of Washington are, that gives us some indication.  

We’re seeing a lot of discussion about social determinants of health, we’re seeing a lot of discussions around health equity. And also, how do you serve underserved populations? How do you address their issues?  

The first two, health equity and social determinants of health are areas that are not well- defined, not well- understood. So in those areas, we could definitely see the agency looking to focus the discussions and definitions as to what we’re going to try to attack in those two areas.  

Underserved populations, of course, is another issue that we have to look at certain structural changes such as prescribing patterns, how do we improve adherence, things like that for the underserved populations.  

A very different approach than the first two.  

Sarah: Yeah, great. Thank you. That’s very helpful. So a few moments ago, Neil, you mentioned the Senior Savings Model. We know that this model has gotten some scrutiny previously. Ryan, can you give us an update here?  

Ryan:  Sure. Well, I agree with Neil, that I think the Senior Savings Model is definitely one to keep an eye on and something that the new leadership is likely to continue. The Senior Savings Model was interesting ’cause it was a bit of a departure from how most models have been structured in the past, where the agreements were two- way in nature.  

Meaning it was the agency partnering with provider groups or the agency partnering with ACOs, or the agency partnering with health plans. With senior savings, we saw a three- Way agreement, the agency drug manufacturers and health plans.  

And they were using that agreement to address drug pricing, which was in some ways, a bit of a departure from the traditional mandate of the demonstration center to focus on lowering federal spending and or improvement in quality.  

So I think the Senior Savings Model pushes the envelope a little bit into showing that the center can be used to advance policy goals. And I do think it also points to a potential way forward for stakeholders, as we look towards the coming years.  

Neil: I would like to add two additional comments to what Ryan has said. The first is, the Senior Savings Model actually modified the benefit in the deductible and in the gap phase, which means that structural innovation can take place at CMMI.

So, that’s one reason why I think it will continue. The other thing though that I’d like to add is for manufacturers. Even if you’re not involved in insulins, it’s very important to watch a program like this and understand what’s going on.  

Because you can start to understand the intent of the administration and what could happen from a structural standpoint.  

Sarah:Yeah. Thank you, Neil, and thank you, Ryan. Ryan, one more followup question for you though here. Some of the objectivesthat you mentioned of the Senior Savings Model, isn’t Congress trying to tackle some of these issues through legislation right now?

Ryan: Indeed. The reconciliation effort has slowed a little bit, as Congress has turned its eye towards the debt ceiling. But I think that that pace will continue to pick back up. But I think what’s most important is what doesn’t happen legislatively, as it relates to CMMI.

Meaning if the administration is not successful in advancing some of their core drug pricing priorities through legislation, that’s when I think we may begin to see CMMI step into the forefront and take on some of those issues.  

One area we know the administration has really prioritized is value, and incorporating value into drug pricing in some fashion. Because the Congress is somewhat limited in what they can do legislatively through budget reconciliation, it’s reasonable to think that they will try to pursue some of these goals through the Innovation Center.  

Likewise, on the manufacturer side, if there are affordability priorities and goals that don’t make it into the legislative compromise to Congress, then I think that the CMMI can also be used for that purpose.  

Again, I would point to the Senior Savings Model as an example where affordability on a particular issue could be addressed through the demonstration. So, I think that the key point is that the Innovation Center can be used by both sides of the drug pricing debate right now to advance priorities.  And I think there are opportunities and risks with that that we need to just be clear right about going forward.  

Sarah: Thank you. Neil, any closing comments on this?  

Neil:  Yes, I have one in particular, and that is, I do not expect Congress to attack anything on social determinants of health. It’s an area that is not well- defined today, and is best served through something like CMMI.  

Sarah: Well, I’m afraid that’s all we have time for today. Thank you, Ryan and Neil, for joining me today. And thank you for all of you for tuning into the Avalere Health Essential Voice. Please stay tuned for more episodes. And if you’d like to learn more, you can visit us at avalere.com. Thanks, everyone.  

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Transcription:

Sarah: Hello, and welcome back to another episode in our Avalere Health Essential Voice series focused on Medicare Part D. My name is Sarah Butler, and I’m the head of Client Solutions, Marketing, and Operations here at Avalere Health. Today I’m joined by two of my colleagues—Ryan Urgo, who’s a Managing Director on our Policy team, and Neil Lund, who’s a Senior Advisor in Market Access. You may know Neil from his prior days as Chief Actuary at CVS health.

Today’s discussion is going to focus on some key elements of the legislative process. We’ll also talk about budget neutrality and congressional scoring. With that, I’m going to dive right in.

Ryan, let’s start with you. We hear terms like PAYGO and “pay-fors” whenever there is a legislative debate. What do these terms actually mean?

Ryan: With most pieces of legislation, the House and the Senate each develop and follow their own rules related to “pay as you go,” which means that any new spending above the baseline, in any piece of legislation, has to be offset with an equivalent amount of new revenue. The legislation has to be budget neutral or fully paid for.

In healthcare, we’ve seen manufacturers, providers, and health plans often targeted as pay-fors to offset any new spending, and the higher the spending the greater the pay-for is.

Sarah: That’s very helpful, and a good foundation. So Ryan, how is this playing out in the current legislative debate in Congress around reconciliation?

Ryan: We’ve seen this concept of pay-fors play out on quite a large scale with the budget reconciliation effort that is wending its way through Congress, which does require budget neutrality. However, the top-line spending total of $3.5 trillion on the House side is higher than anything we’ve seen in recent history.

The reconciliation instructions in the Senate require the finance committee to offset $1.75 trillion in new spending, plus another $1.75 trillion in new spending from the other committees of jurisdiction, which gets you to the total of $3.5 trillion over a 10-year period.

Sarah: That’s a very large amount of money. So, let’s take a look at some of the key components of the proposed legislation. One item that’s been getting a lot of press and attention is the addition of hearing, vision, and dental coverage to Medicare fee-for-service. This would clearly be a really big enhancement, but how would something like this be paid for?

Ryan: Right. So first off, I think an important consideration is that it would be unrealistic not to assume that the Senate’s version shrinks the $3.5 trillion total to something in the neighborhood of $2 trillion. That feels like a potential compromise point where the administration is going to need to work with senators, given that there are such narrow margins. There is no room for losing any members that might be apprehensive with the high total.

So, how does it get paid for? Typically, healthcare pays for healthcare. If you look at the top-line $2 trillion and tease out the largest healthcare-related provisions in there, you’ve got an expansion of Medicare to include hearing, vision, and dental. That’s roughly about $375 billion in new spending over 10 years. Then there’s extending and making permanent the ACA coverage provisions from earlier this year. That costs about an additional $250 billion. All-in, you’re looking at $625 billion.

Now, the House tried to pay for that $625 billion almost entirely from manufacturers through policies like Medicare negotiation, inflation penalties, and Part D redesign. If you add all those policies up, back of the envelope, it comes in just under $500 billion. So even looking at all of those policies and thinking about them being passed into law, you still wouldn’t get to that total of $625 billion, but that’s at least what they have in mind right now—having a substantial component of those healthcare provisions paid for by life sciences manufacturers.

Sarah: Yeah, very helpful. I would definitely like to see that back of the envelope and what assumptions go into that.

To that point, Neil, I’d love your perspective on this. Can you share a little bit more about how negotiation, inflation penalties, and Part D redesign would save that roughly $500 billion that Ryan mentioned?

Neil: Gladly, Sarah. To piggyback off some things that Ryan has mentioned, it’s important to realize that there are realistically three sources of funding. There’s the federal government through their subsidies, the members through their premiums and copays, and there’s the manufacturers who were swept into this as part of the ACA. On the spending side, you have the health plans charged with trying to control and cut back on spending.

These are the levers that budget reconciliation, budget neutrality, will try to pull to keep the cost in line. With that said, it’s important to note that a significant portion of this will undoubtedly fall to the manufacturers.

Sarah: Thank you for that overview, Neil. You mentioned budget neutrality. Can you explain this in a bit more detail?

Neil: I will try to, but budget neutrality and the scoring that comes with budget neutrality are confusing and arcane. Let me give a quick example. The rebate safe harbor rule will be permanently repealed, but the rule was never implemented. So, the act of repealing will generate “savings” of about $105 billion dollars for something that never happened. It’s quite bizarre when you think about that.

Another important point to consider is that while scoring looks at the cost to the government, it also brings into consideration the cost to and impact on all of the other constituents—the member, manufacturers, and health plans. So, it’s very important to look at what’s underneath the covers when the Congressional Budget Office (CBO) scores this and understand the impact of all of the components and how they view those components.

Sarah: Ryan, if you can put on your life sciences hat, why does all of this matter? And if you are a life sciences company, what would you be doing to prepare?

Ryan: If you’re thinking about preparation, the most important thing is trying to understand the individual components of a score and thinking about the likely behavioral responses to the policy in the marketplace and how it could ultimately impact your strategy. When it comes to modeling the impact of a piece of legislation, and when industry stakeholders try to come up with a policy alternative that might generate comparable savings but not be as detrimental to day-to-day business, you really need to understand how an entity like CBO would look at their ideas and model those budget effects in similar ways. That means not just understanding CBO’s methods, but also some of those intricacies of how they would evaluate a particular policy, not unlike the example that Neil just gave with the rebate safe harbor rule, which would not be intuitive to anybody that wasn’t deeply familiar with the arcana of budget scoring.

If we take this full circle and bring it back to the reconciliation bill, we can assume that the Senate is going to be targeting a compromise package around $2 trillion. You don’t know exactly what’s going to be in the rule, but like I said, a good rule of thumb is that healthcare generally pays for healthcare. So, keeping that life sciences hat on for a moment, if the Medicare expansion and the ACA expansions remain intact in the Senate, but let’s say the lower spending comes from either less tax revenue collected or a less ambitious set of climate change policies, the pay-for risk to manufacturers is probably still going to remain high.

Changes in the healthcare provisions themselves or lower spending on the healthcare side could alleviate some of the pressure on the pay-for side, but again, we’re talking about spending totals that are so high to begin with, risks that are so large, that they’re not they’re not going to go away.

One thing that I would say that’s a benefit to the Senate effort being a bit delayed right now is that a space has opened up. Between now and the release of the Senate’s package, I think there’s a real opportunity for industry stakeholders like manufacturers to model out the budgetary effects of alternative options and to also consider playing with the implementation and effective dates of the existing proposals because those changes could also affect the congressional score in different ways. This debate can really be shaped during this space before the Senate proposal comes out.

So, the idea of finding viable alternatives requires not just a deep understanding of what workable revisions could be from a policy standpoint, but also that technical knowledge of how CBO would evaluate those policies.

A large legislative package like this creates an opportunity to advance certain policies that might slightly raise the deficit, but when paired with enough other revenue-generating policies, you’re keeping the overall total cost of the bill neutral. That’s a way you could potentially advance certain policy goals in the context of a larger bill. So, while there is quite a bit of risk, and certainly that’s not lost on all of the stakeholders who have been following this process, there are some opportunities as well.

Sarah: Thank you, Ryan. That was a really comprehensive overview. We’re about out of time, but Neil, I’m curious if you have any closing thoughts for us.

Neil: Yes, I have several. First of all, something will happen, so it’s important that all of the constituents maintain engagement in what’s happening here. By engagement I mean monitoring what’s going on, commenting, and providing feedback, but that feedback needs to be given in a positive way. Finally, we need to recognize that at the end of the day, we will end up with a compromise.

Sarah: Well, thank you, Neil and Ryan, for joining me today. And thank you all for tuning in to Avalere Health Essential Voice. Please stay tuned for more episodes. If you’d like to learn more, please visit us at www.avalere.com. Thank you.

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Transcription:

Ryan Urgo

Hi. And welcome to another episode of Avalere Health Essential Voice. I’m Ryan Urgo, Managing Director in the Policy Practice here at Avalere, and I’m joined today by Neil Lund, Senior Advisor in our Market Access Practice and former retired Chief Actuary for CVS Health.

Our podcast show covers a wide range of healthcare topics. Today’s episode will be another installment in our Part D miniseries focused on policy changes and the impact on market access. So I’ll kick us off, Neil.

The legislative environment right now is, there’s quite a bit of activity underway. We know that the House bill has been out now for several weeks. There’s still negotiation going on in the Senate, but from a Part D perspective, we know that there is a lot of activity under consideration.

We’ve got Medicare negotiation, the details of which, I think, are probably still being hammered out between the House and the Senate—they may not align on the exact policy, but we know that they both share the goal of Medicare negotiation in Part D—inflation penalties, which seek to curb list price growth in the Part D program, and of course, Part D redesign, which would completely change the incentive structure in the program and put it on more stable footing for the future.

So there’s lots going on on the legislative front. What is uncertain to us is the pace of when this will all play out. It’s fair to say at this point that the Senate is going to need more time than they had originally signaled to put something out that is agreeable to the majority of their caucus.

They can’t really afford to lose anybody. So the politics are tricky and there’s quite a bit of uncertainty in the market. But one thing that is certain is that with the right planning on the front end, stakeholders such as life sciences companies and health plans can be prepared for any scenario that plays out.

Neil, just starting us off with a question. How do you think it’s best to go about understanding how these various policies affect a market access and reimbursement strategy?

Neil Lund

Well, first of all, Ryan, all of the constituencies need to stay up to date and really watch Congress. With very even divides in both the House and the Senate, things could change dramatically overnight.

Things could happen overnight, and it’s always going to be a very dynamic situation with the Congress we have. But specifically to the point, this is a place where using existing data, you want to model various impacts, have contingency plans around that, and be definitely aware of the impact of anything on all of the constituencies that come into play. Not just yourself if you’re a manufacturer, but understanding plans and members, for example.

Ryan Urgo

Yeah. If you think about the different outputs that any good quantitative modeling would assess, one is the manufacturer’s overall gross to net, which is the sum total of all of the various reductions on the list price and how that ultimately is going to affect the bottom line.

Another is net plan liability and changes to net plan liability. Of course, that has a direct impact on the potential direction of the premium. Of course, member impact and out-of-pocket costs is another output that has to be taken into consideration in this process.

And also total federal spending, which is the sum total of all of the various changes to a particular policy and how it scores. How do you think Neil, that you can do modeling in a way that estimates out all of these various outputs in the right way? Maybe take Part D benefit redesign as an example?

Neil Lund

Sure. And this is something that’s fairly routine for health plans to be doing as part of this, so it’s important that manufacturers be in a position to follow suit, but the health plans will look very importantly at the impact on the member, because Part D is purchased annually by the members, and it’s a sophisticated market out there that makes these decisions, so the member impact is critical.

You have to look at what will happen with the manufacturers and how the plans or the PBMs are going to be negotiating with the manufacturers for rebates, tier placement, UM, and other considerations around that, because that is a piece that could change relatively dramatically depending on what happens with any of these, not just redesign, but also say price negotiation by the government.

There are some other pieces that come into play though too. Not only just the government, government spending and key, but how is the pie of funding carved up between the government, the member and manufacturers, because those are the real key pieces that fund this program today.

And finally, you can’t forget the pharmacies: the network development, the delivery of this thing, there’s an impact to there. It’s often subtle, but pharmacists are well-regarded advisors to the members, so you cannot ignore the impact on the pharmacy.

Ryan Urgo

I mean, these are great points. To me, I think the sum total, the effect of all of this work is to be better prepared. And if I’m putting myself in the shoes of a manufacturer, it’s really trying to get to those secondary effects that I think have the most bearing on one’s strategic review and market research plans.

Now, if you look at a legislative text, you’re not going to be able to glean immediately what the market responses are going to be, right? That I think is the most important piece that’s going to drive strategy, is how will health plans respond to a particular policy? How will manufacturers then respond in kind?

Neil Lund

And the health plans will respond based on the perceived economics to the member. And how will the member and prescribers respond to these changes?

Ryan Urgo

Right. So ultimately, having a good quantitative foundation for how these policies play out financially then gives you an important roadmap for being able to predict what the market responses will likely be, and-

Neil Lund

Predict or have alternative responses depending on what happens.

Ryan Urgo

exactly.

Neil Lund

So preparation is the key.

Ryan Urgo

Right. And at the end of the day, that’s what can prepare any stakeholder for any scenario that happens legislatively. If you’re a market access professional, you may not be able to influence the specific trajectory of the bill, but what you can do is prepare for many different outcomes with the right modeling on the front end. Wouldn’t you agree?

Neil Lund

I fully agree.

Ryan Urgo

Great. Well, Neil, I just want to thank you for joining me today and for taking the time to have a quick chat on this topic. And thanks to all of you for tuning in to Avalere Health Essential Voice. Please stay tuned for more episodes in this miniseries.

And if you’d like to learn more, please visit us at www.avalere.com. Thanks.

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Transcription:

Ryan: Hi, and welcome to another episode of Avalere Health Essential Voice. I’m Ryan Urgo, Managing Director in the Policy practice here at Avalere. I’m joined today by Neil Lund, Senior Advisor in our Market Access practice and retired former Chief Actuary for CVS Health.

Our podcast show covers a wide range of healthcare topics. In today’s episode of our Part D miniseries, we’re focusing on understanding plan decision making in Medicare Part D. Before we dive into how plans make decisions, let’s share a quick overview of the Part D markets that influence these decisions.

I think the key thing to understand is that the plan’s formulary always has to be compatible with the plan designs and the target markets themselves. Part D is composed of many different markets. Sometimes it’s thought of as one large market but thinking about it as a series of smaller markets is better when it comes to really understanding how plans make decisions.

There are some obvious splits like PDP (prescription drug plan) versus MAPD (Medicare Advantage prescription drug plan), and low-income versus non-low-income populations, but there are very different needs, and these markets should be approached differently. PDP and MAPD have roughly 50% market share at this point in time, and the low-income subsidy (LIS) population has about 25% market share, but they’re a disproportionately larger share of the actual utilization.

Another portion of the market that’s yet more different are the EGWPs, or employer group waiver plans. That’s about 19% of covered lives.

Finally, you can think of Part D as having submarkets defined by certain disease states like C-SNPs, which are chronic condition special needs plans for certain beneficiaries that have chronic conditions and very significant healthcare needs and challenges. I think that segmentation of this market is the most important thing to think through, and buyers in this market can be quite sophisticated and have pretty good tools to search for a plan that’s going to meet their needs.

So, Neil, we are often asked about how plans make formulary decisions. How are these decisions made? Can you walk us through some of the key components for making those decisions?

Neil: Sure. I’m glad to, Ryan. First, we need to understand that CMS has extensive guidance and regulation around formularies. This creates a compliance framework, which constrains how Part D formularies can be structured by plans.

The second framework, which you just touched upon, is the target markets. As you noted, each of these has different needs and requires a different approach. So, what are the profiles of the existing members? What are the profiles of the new members that plans are trying to attract?

The third is clinical efficacy. What are the first-line treatments? What are the second-line treatments? What’s happening with new treatments? What’s changing in the marketplace? How does all of this factor in?

The fourth piece to this is the financial dimension. Plans can’t operate at a loss. No one would last very long with that. So, loss ratios are a major tool used in analyzing and structuring the formularies.

Taking all of this into the mix, this becomes a very collaborative effort on the part of these groups. It’s important to note that no one group has an absolute veto on anything. It is very collaborative and it is often a very interesting set of discussions.

Ryan: Neil, I’m glad that you mentioned the financial component. Part D is a fascinating and unique market because unlike other markets, say in the commercial space, in Part D, there is a shared liability structure for the total cost of the benefit. So obviously, you’ve got plans contributing to the total cost, but you also have the federal government for a significant portion of the benefit, manufacturers through the coverage gap discount program, and beneficiaries on the cost sharing side.

The reason that matters is that when costs go up, when list prices go up, those costs are shared according to the proportion that each of those stakeholders has for the cost of the benefit. If list prices were to go down, then the savings would also be shared along those same percentages.

So, when you add manufacturer rebates into the mix, that’s when things get really interesting because rather than sharing the savings or the cost associated with list price changes, plans are keeping most of the rebates that they’re collecting, with the exception of the portion that is shared with the federal government in the catastrophic phase.

Rebates really can go a long way in driving liability shifts for plans in some cases, depending upon not just the rebate that’s being offered for a particular product, but also where most of those scripts are filled within the benefit because plans are taking on more of the benefit cost early on in the initial coverage phase, and much less in the coverage gap and in the catastrophic phase. Some drugs can actually wind up being profitable to plans on a net basis. I think it’s fair to say that those drugs may also function as a subsidy to plans against those drugs that happen to be a lot more costly.

So, Neil, I’m wondering if you wouldn’t mind elaborating a little bit more on of some of the financial components to this, and maybe introducing how loss ratios come into the picture as it relates to the plan’s net liability.

Neil: Gladly, Ryan. Loss ratios are designed to take into effect all of the factors that you mentioned. Loss ratio, at a simple level, is the net cost of the drug benefit to the plan itself, divided by revenues, which would include the CMS subsidy member premiums and any other revenue pieces like that.

Looking at the numerator, which is the drug costs less member copays, less LIS claim subsidies, less rebates. And it’s net rebates because rebates actually gets shared with CMS.

As you mentioned, loss ratios can be quite low for some drugs. Some drugs that may be seemingly very expensive have low loss ratios because of the risk scores that adjust the revenue that come to plan, as well as the rebates. So there are a variety of factors that come into play.

It’s important to note that plans will develop the loss ratio at the individual member level, and once it’s known at the individual member level, you can sum all of those members up to see what happens for a specific drug, a specific class, a specific subset of member. It’s very flexible and extremely powerful to understand what’s going on. So that is a real key.

There are some very interesting differentials that come out. For example, any given drug will have a significantly different loss ratio between LIS members and non-LIS members. There are other cuts that are the same way. It’s important to note that MAPDs often will look at the total loss ratio, that is the drug in combination with medical spend, to look at the total loss ratio for their products. That has the advantage of being able to make trade-offs between drug costs and medical costs. That’s a trade-off that does not exist in the PDP market.

Ryan: Interesting. Neil, it sounds to me that if you’re sitting in the shoes of a drug manufacturer, you should be very interested in really understanding how all these dynamics work, and ideally, to try to seek to conduct some of this modeling internally. My question to you is how understood do you think these concepts are outside of just the plan space, and do you agree with the notion that having greater insight into some of these financial considerations would be critical for manufacturers that are interested in understanding how plans make decisions and how formularies come together?

Neil: Ryan, I think there’s a superficial level of recognition of loss ratios in the broad context, but loss ratios themselves are very nuanced and the nuances are critical in developing the loss ratios. Beyond the plan actuarial level, I think it’s very hard to understand and put together loss ratios, but it is important to recognize what is going on, what the dynamics are, and what the drivers of loss ratios are, at least in the broad context, particularly for manufacturers.

Ryan: So let’s put this into some larger context. Based on the Part D bid calendar and some of the strategic considerations that you’ve teed up already, if you’re a life sciences stakeholder, when would you recommend you start thinking about these issues?

Neil: Actually, Ryan, it’s a continuous process for the plans themselves. They’re never out of bid mode. Realistically, you can think of them starting the process in July shortly after the bids have been submitted.

The bid strategies themselves are a combination of behavioral economics at both the member level and the plan level because you’re trying to determine what your competition is doing; game theory, which again ties into both members and your competitors; conditional probabilities, because information emerges over time that is critical for the bid; and frankly, hard negotiation, both internally with manufacturers and others.

Generally speaking, around November, the PBMs (pharmacy benefit managers) and plans will submit RFPs to manufacturers with the intent of having a response around the end of the year, but the final decisions on the formularies themselves probably will not be made until early May. It’s as late in the process as possible to get all of the work done around submitting them to CMS because there’s a lot of information such as CMS not releasing the final rules for the year until April. Of course, the first Monday in June is when all bids are pencils down at that point.

Ryan: Right. So, let’s put all this together, then. If we think about the importance of market segmentation, if we think about the role that rebates play in the plan’s overall financial liability, and the notion of the loss ratio down to the member level, if you’re a manufacturer, you want to start evaluating all of these various marketplace and financial considerations no later than September in the year prior to that June bid submission deadline. Fair?

Neil: That’s fair. And as you mentioned early on, one size, one approach, does not fit all. Unless your product has a clear, compelling clinical and financial advantage over all competitors, you’re going to be treated differently on different formularies by different plans. It’s just the nature of Medicare Part D.

Finally, I think it’s important for manufacturers to be prepared to work with plans and PBMs. The manufacturers’ goals and the plans’ goals are not fully aligned, but the goal is through negotiation and understanding to bring them as close to alignment as we possibly can.

Ryan: Yeah, it’s fascinating. Neil, I want to thank you so much for your time today and I want to thank all of you for tuning in to Avalere Health Essential Voice. Please stay tuned for more episodes of our podcast show. If you’d like to learn more, please visit us at Avalere.com/podcasts.

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Transcription:

Amelia Nell

Hello and welcome to another episode of the Avalere Health Essential Voice Disease Education series. In this series, we will be covering topics on a wide range of different therapeutic focus areas.

My name is Amelia Nell and I’m a senior associate in our policy practice here at Avalere Health. And I’m joined today by Brigit Kyei-Baffour, an associate principal in our market access practice, and Michael Kearney, a consultant in our market access practice.

Welcome to you both. In our last video, we had explored opportunities to pursue value-based arrangements for cell and gene therapies, and today we’ll explore the need for patient support when it comes to CGTs and the role that manufacturers and other stakeholders can play in providing that support.

So to start us off, Michael, wondering if you could tell us a bit about how patients access treatment for cell and gene therapies today and why that might look different from other treatments.

Michael Kearney

Great question, Amelia. A major differentiating factor is actually the number of authorized treatment centers. Usually there’s a fairly small subset of providers or sites that can actually administer these treatments.

Specifically for CAR-T, those providers need to be a part of a accredited organization through the Foundation for the Accreditation of Cellular Therapy. Also, in some cases, for other CAR-T, a lot of these require a REMS requirement and specific capabilities that providers must manage, like side effects like cytokine release syndrome.

So being able to manage these types of considerations is also something that patients will need to consider as they’re looking to potentially receive CAR-T treatment. For gene therapies, while these are oftentimes administered in the outpatient setting, I think there’s still that kind of limiting factor in the number of specialists who can actually provide these treatments. And that goes for the same for CAR-T as well.

And what does this mean for patients? I think given the limited number of treatment centers out there for both CAR-T cell therapy and gene therapy, patients have to consider not only what they’re paying for these drugs, but also how are they going to get to the treatment centers? Transportation, lodging, meal plans, things like that are all considered potential barriers for patients getting these types of therapies.

Brigit Kyei-Baffour

Those are all great points, Michael, and I would say in addition to the cost sharing for these products, these therapies can be quite high. It is possible for patients to reach their deductible or even their out-of-pocket max in a single appointment. And of course that can be a challenge for many patients who may not have disposable funds.

And it’s also important to keep in mind that many patients eligible for cell and gene therapies may have already completed previous lines of treatment and subsequently exhausted their funds at that time. And so these are definitely factors that weigh heavily on patients in terms of thinking about access to care and what some of the respective barriers might be.

Amelia Nell

Thanks Brigit and Michael. I think that was very helpful and I think given all the challenges that you just outlined, what type of support is there currently available for a lot of these cell and gene therapy patients?

Brigit Kyei-Baffour

Amelia, that’s a great question. There are varying levels of support that are provided by different entities. So I’ll spend some time talking about the patient support programs first, the manufacturer patient support programs. They can provide a wide range of support offerings that could include financial support such as copay or cost-share support that helps patients meet their out- of- pocket cost-share liability.

There’s also reimbursement support that’s provided to providers to help with things like benefit verification and prior authorization, sometimes field team support and coordination with specialty pharmacies.

There is also treatment journey care coordination that is typically provided via care teams that are assigned or designated to patients to help with things like understanding their insurance coverage, identifying insurance, helping with coordinating office visits and any follow-up support.

There’s also free drug programs for uninsured and underinsured patients to help with providing access to therapies. And what we’re seeing more and more recently is access to care offerings such as site-of-care locators or provider identification tools that help patients identify providers and treatment facilities to help them access treatments in addition to transportation support.

Michael, is there anything else you’d like to add here?

Michael Kearney

Yeah, specifically on the transportation piece, I think a number of manufacturers are looking to offer these types of services. I know that some are already, but even with that, they are limited in some respect.

So oftentimes, as we found in some research that we’ve done, patients are having to travel far and wide to reach these types of treatment centers. And there are certain restrictions around what manufacturers can offer in terms of transportation support services.

So while they’re a start, there’s certainly a lot more out there in terms of what can currently be done to make sure that these patients are actually receiving the transportation support that they need.

Brigit Kyei-Baffour

And I would say in addition to that, in addition to manufacturer support programs, there’s also patient advocacy groups. And these groups can provide also a range of services to qualified patients that can span from copay relief to help alleviate out-of-pocket burden.

They’re also providing case management services to help patients with insurance re-enrollment and also helping them understand their coverage benefits. And they’re also providing nonmedical expense support similarly to the manufacturer patient support that can help provide support with things like transportation and cost-of-living expenses.

Michael Kearney

Yeah. I think in terms of other types of entities offering services, hospital systems themselves are certainly starting to offer services, things like social services. Just making sure as patients come in, particularly those heavily seen in the Medicaid space coming in, getting support to make sure that they understand what types of tools are out there is certainly a first step in ensuring that patients are at least getting access to these and know about them.

Some health systems are even building off of what I mentioned before about transportation. Some are adding transportation services, but I think there certainly is a gap in the understanding of where these patients are coming from.

And so I think that transportation piece is something that is going to continue to be built out as more and more cell and gene therapies come to market.

And then coordination of care. We’ve spoken to a number of people in the marketplace specifically around coordinating care. And as you’re looking to help patients through the entirety of the patient journey, not just diagnosis, but through first, second, third line of care, and potentially by the time they get to CAR-T, offering services to make sure that the patient has a smooth transition throughout that and understand all the respective components to make sure that they’re receiving the adequate care that they need to for the best possible outcome.

Amelia Nell

Yeah, thanks Michael. And sort of building off that last question, one last question for you and Brigit. How do you expect patient support for these therapies to develop in the future? And I’m thinking in particular, how can manufacturers or what can manufacturers do to assist these patients?

Brigit Kyei-Baffour

Yeah, that’s a great question, Amelia. I think in the future, we’ll likely see manufacturers developing more innovative and comprehensive ways to provide support that sort of expand beyond some of the traditional modes of patient support.

And I think we’re starting to see increased flexibilities allowed via the OIG public opinions, which I will caveat that those are specific to, or can be specific to a manufacturer specific to a program.

I think they are a good indicator that there is a potential path forward for manufacturers to be able to address some of the socioeconomic risk factors that patients may experience across payer channels.

And these programs can be used to help close the gap on some of the health disparities that hinder access to care. And so as we’re starting to see more to Michael’s point in the realm of transportation support, helping with lodging and meals and things of that nature, more partnerships with community-based organizations, I think that that’ll be something that will continue to trend in the future.

Michael Kearney

Yeah, and building on that a little bit, leveraging not only claims data, but socioeconomic status data to pinpoint specific areas and affordability barriers that patients face. We know, based on research that we’ve done, that given the concentration of these qualified treatment centers, FACT- accredited sites, they’re in certain parts of the country and that may not be easy for a lot of folks to get to.

And then you layer on socioeconomic factors to that. Obviously that burden exacerbates a little bit. So leveraging real-world claims data and socioeconomic status data to help really understand the patient population, I think will really be a benefit for manufacturers as they’re looking to build out additional support services to ensure that they’re reaching patients in an adequate manner.

Amelia Nell

Well, thank you Brigit and Michael. I really appreciate the discussion on patient support services. That wraps up our three-part series on cell and gene therapies, but we do continue to work on these therapies daily with a wide variety of engagements with our clients, and we welcome listeners or viewers to reach out with questions or if you’d like to discuss any of the topics covered today.

Amelia Nell

So thank you for tuning in to Avalere Health Essential Voice, and please stay tuned for more episodes in our Disease Education series. And if you would like to learn more, please visit us at avalere.com/podcasts.

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Transcription:

Ryan: Hello, and welcome to another episode of Avalere Health Essential Voice. I’m Ryan Urgo, Managing Director in the Policy practice here at Avalere. I’m joined today by Neil Lund, Senior Advisor in our Market Access practice and retired former Chief Actuary for CVS Health.

Our podcast show covers a wide range of healthcare topics. Today’s episode in our Medicare Part D miniseries, is going to be focused on Part D trends and pressures, particularly in the evolving drug pricing environment, which has quite a bit to say about the Part D program.

What are some of the key factors or trends that we should be following in Part D beyond just the premium, particularly if you’re a life sciences or health plan stakeholder?

Neil: Sure, Ryan. I agree this has been a phenomenally successful program, and it has gone through a period of great stability. I think there are 2 key trends that we want to talk about today.

The first is membership and how membership is changing across plans. The second is the drug cost mix itself, which has also been changing significantly. These have very broad implications for the Medicare Part D program.

Ryan: So why is membership so important?

Neil: There’s been strong enrollment growth over time, but a pronounced shift in how the beneficiaries are distributed. On one hand, membership has more than doubled since plan inception. It currently grows at a rate of about 4% a year and has over 49 million members currently enrolled. It’s a very strong program.

However, the membership composition has changed significantly. At inception, about 75% of the membership was in prescription drug plans (PDPs). Today, PDP membership is slightly under 50%. So, PDP and Medicare Advantage Part D (MAPD) membership are very similar to each other.

What has been happening is the PDP membership has been relatively flat to just mild declines, while the MAPD membership has grown robustly. Plan participation has also changed. PDPs are relatively stable with about 65 contracts. Contracts are a way that CMS measures participants. A contract is one CMS contract with a given plan, whether that covers one region or 34 regions.

MA on the other hand has a very robust 895 contracts, so significantly more contracts than PDPs. These grow by about 60 contracts a year. So again, an evolving shift. We’re seeing a very dynamic MA market and a relatively flat PDP market.

Ryan: Very interesting. So even more to the point, with MAPD being such a diverse and growing segment, I’d be interested to hear your take on how MAPDs and PDPs think differently, and how they approach various submarkets in different ways.

Now, I can think of a couple of examples that I know are important, one being that Medicare Advantage has responsibility for the total cost of care, not just the drug spend. As a consequence, they typically have offered richer plan benefits, meaning they cover more drugs and they tend to have more flat copays and lower overall beneficiary coinsurance. Plus, the MA 5-star program puts a tremendous emphasis on quality. So, for an MAPD player, an argument for covering a drug that is perceived to be high value if that drug can lower overall total cost of care is going to resonate much better.

The one other thing that I would mention is the makeup of beneficiaries in utilization patterns can also really vary between PDP and MAPD. So, if you are a plan sponsor with each book of business, you may draw different conclusions about whether a particular drug is attractive on your PDP formulary versus your MAPD formulary. It’s not always a uniform decision. I think that’s also a very key dynamic that we need to take into consideration, particularly if you’re a life sciences stakeholder, when it comes to thinking about the marketplace and this broader shift towards MA.

Neil: I think it’s also important to recognize that it’s not just on-formulary or off-formulary. It’s tier placement, it’s the utilization management that you bring. A PDP may want to have extensive utilization management on a given drug while an MA plan may want none, for example.

Ryan: Neil, we also know that depending upon the composition of the membership in a particular book of business, be it PDP or MAPD, the coverage of certain drugs attracts or discourages enrollment of different membership types in terms of their overall profile. Is it fair to say that the decisions that plans make around the composition of their formulary and the type of enrollment that they are seeking to attract could also vary between PDP and MAPD?

Neil: Oh, absolutely it does, and it has for a good number of years.

Ryan: So fair to say then, if you’re putting yourself in the shoes of a manufacturer, you may want to think about your Part D portfolio strategy in terms of two separate markets as opposed to one market with each having their own set of strategic tradeoffs.

Neil: Definitely, that is where the plans have been for a while, and it is where the manufacturers need to be.

Ryan: So, Neil, you mentioned drug spend earlier. What about drug spend? Say more about that.

Neil: In 2008, about 15% of the spend was for generics. Today, it’s about 20. Spend on traditional brands was about 70% of the spend. That’s fallen nearly in half, about 37% in 2019. The big shift has been in specialty spend.

These have created tremendous pressures on the Part D program that we’re starting to see. This means lower subsidies for members and Medicare Part D is predicated on a CMS subsidy for all members. Those have been shrinking dramatically. For many members, this has resulted in very high out-of-pocket costs. It creates at least the perception of runaway drug costs because people focus on the high-cost drugs. Whether that’s a fair characterization, I would disagree, but it is in fact a perception that’s out there and it creates significant pressures for plans to push for increased rebates for manufacturers.

We’re on this rebate treadmill with the current situation and there’s funding issues for CMS. Congress is looking at this. MedPAC has reported on it. It gets a lot of attention, and it’s probably time for action.

Ryan: Right. So, this brings us to Part D redesign, which we know has been in the news quite a bit over the better part of the past year or two, as well as with respect to the evolving reconciliation effort in Congress. Do you think that Part D redesign is the right approach? Is this what you think needs to be done to address some of these pressures that you’re talking about?

Neil: I absolutely think this is what needs to be done. There are a number of proposals in Congress that will introduce a maximum out of pocket for members, which is good policy and is common on the MA side where there is a maximum out of pocket for medical spend. So, it’s a good move there.

Changing the sharing of catastrophic liability between CMS and the plans is also good policy. It was originally set because no one knew how many plans would participate or what the program would look like. We now have robust data. It is more manageable for plans today.

And, finally, we’ve got to understand how we equitably share the costs between manufacturers, CMS, members, and all parties that are impacted by this, including the pharmacies themselves. I believe it’s time, perhaps past time, to really push for change.

So, Ryan, policy redesign is good policy, but what else should stakeholders, particularly manufacturers, be thinking about relative to this policy?

Ryan: We have seen various competing proposals, though, on how to do Part D redesign, and they have been a bit of a moving target for manufacturers.

When you think about where that new mandatory rebate is going to be set, that really will determine whether or not it’s seen as financially positive for individual manufacturers, or whether it’s something that is going to place even greater pressure on their overall portfolio. So, I think that the key thing is that, depending upon the final proposal that is ultimately introduced through the reconciliation effort, manufacturers really need to be thinking about where those dials are set and how those dials affect the overall financial picture for their portfolio. That’s going to vary depending upon the mix of drugs that you have out in the marketplace, and the extent to which manufacturers can quickly model out how adjustments or modifications to the policy make it better or worse for them is going to be key.

So, Neil, I want to thank you for joining me today, and I want to thank all of you for tuning into Avalere Health Essential Voice. Please stay tuned for our next installment in this miniseries. If you would like to learn more, please visit us at avalere.com/podcasts. Thank you very much.

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Transcription:

Elizabeth Carpenter

Hello, and welcome to another edition of the Avalere Health Essential Voice. I’m Elizabeth Carpenter, Head of Advisory Services at Avalere, and today I’m joined by Massey Whorley, an associate principal in our policy practice and one of the leaders on our policy analytics team.

Everyone at home I am sure is gearing up for a big healthcare debate on Capitol Hill this fall, a debate that we expect to include issues like extending Affordable Care Act subsidies, expanding benefits offered through Medicare and drug pricing reforms.

But today’s discussion is really going to be about the debate that we expect to see around the Medicaid expansion population, or more accurately the population who’s not in Medicaid because states have not yet expanded. So this gap population, people who make too much money to qualify for Medicaid and not enough money to qualify for exchange subsidies. And so to date, 12 states have yet to expand Medicaid. Avalere estimates that about 2. 6 million people fall into this gap. And Massey is here to talk about how we expect this all to unfold.

So let’s go ahead and jump right in. Massey, talk to me about these people. Who are they? Where do they live? What are some of the key considerations related to the population as policymakers consider potential reforms?

Massey Whorley

That’s a great question, Elizabeth. So the folks that we’re talking about are low- income individuals who live in predominantly southern states. Think of Texas, Florida, Georgia, the Carolinas, Alabama, Mississippi, and Tennessee.

There also happen to be a handful of states in the middle of the country, notably Kansas, Wyoming, and South Dakota that have also not moved forward with Medicaid expansion. As you mentioned, the challenging thing to understand is that in these states, there are roughly 2.6 million people who find themselves making too much at their jobs to qualify for Medicaid, but not enough to qualify for subsidies in exchange. And they fall into what folks call the coverage gap. To put a finer point on this, these individuals are typically making less than $12,880 a year as an individual or more if they’re in a family, but they don’t typically have employer-sponsored insurance either because their employer doesn’t offer it or they can’t afford it.

And this creates an equity issue where very low-income people either have or don’t have access to affordable coverage depending on what side of an invisible line they live on. So again, thinking about how states are right next to each other, if you live in one state, you may have access, whereas if you live to the state of the south, you don’t.

Elizabeth Carpenter

Yeah. Okay. So that’s really helpful. Now that we know a little bit more about the population, let’s talk about some of the potential solutions policymakers are considering, right?

Congress can’t just put them all in Medicaid. We tried that, right? And it’s part of the reason the situation exists that it does. So just talk us through some of the key policy options that are being debated.

Massey Whorley

Yes, you’re right. The important context here and a bit of history is that the entire situation that we’re in with Medicaid expansion as a state option stems from the 2012 Supreme Court case in NFIB versus Sebelius. That court decision upheld the constitution of the Affordable Care Act, but said states could not be forced to expand Medicaid. So as a result of that, proponents of the Affordable Care Act have tried multiple paths to expand Medicaid in the roughly half of states that didn’t immediately move forward in January of 2014.

The new federal option that is being discussed would apply to the 12 states that have yet to move forward. And there are two options being debated currently. First is the idea that the rules for the exchange subsidies would be changed to let people below the federal poverty line in non-expansion states gain access to the subsidized coverage.

Generally speaking, subsidies are currently only available to those folks with incomes above the poverty level. Second is the concept of a new federal public program that provides Medicaid-like benefits to those individuals in the holdout states.

Elizabeth Carpenter

Got it. And we’ll talk more about this, but two main options on the table. Put the gap population into exchanges or make them eligible for exchanges, or creating a new federal program. So not a new public option the way it’s been talked about more publicly, but a new federal program for this population.

I can’t help but wonder as I hear you talk, the majority of states have decided to expand Medicaid. We’re at the point now where they’re contributing to that Medicaid expansion. And then you have these 12 states that have not expanded Medicaid who have sort of said, ” I don’t want to expand Medicaid.”

So talk to me before we move on, sort of how do you expect this federal policy discussion to play in the states, both among states that chose not to expand and those states that have expanded and are contributing financially?

Massey Whorley

So for those states that haven’t yet expanded, I imagine they have a continued sense that DC should really stay out of state affairs, but there also could be a sense of relief that they no longer have to worry about this.

This is something that the federal government is going to take on, and you don’t typically hear states, for example, complaining that the federal government runs Medicare. At the same time, you have states that from the beginning and then along the way have complied with the intent of the Affordable Care Act and expanded Medicaid.

So while this means that low income people in those states have access to coverage, it also means that those states, as you mentioned, are paying that share of coverage. So as it stands right now, expansion states are responsible for 10% of the costs of expansion.

That creates a situation where non- expansion states may be let off the hook and expansion states are left holding the bag. And because of the NFIB case, we know that states can’t be compelled to expand Medicaid, meaning some expansion dates will likely ask, ” Well, why shouldn’t we backtrack? We can put these folks in the exchanges and book the savings.” As a result, it wouldn’t surprise me to see a sweetener in the final package to keep expansion states happy and move the deal forward to provide coverage to those in non-expansion states.

Elizabeth Carpenter

Yeah, that’s a really interesting point. And as somebody who used to work in state government, I’m sure you have a particular point of view and experience sort of as to how states are thinking about budgets.

We know that this is not an easy time, it’s never an easy time for state budgets, but it’s certainly not an easy time as we think about the impact of the pandemic and the like. So always fascinating when sort of state and federal budgetary and policy issues collide on Capitol Hill.

So more to come there. We’ve talked about states, a big stakeholder obviously in this debate. Let’s talk about some other ones. Health plans. We’ve seen a resurgence of interest of health plans in the exchange market. Obviously, health plans have stepped up to the plate as part of the Medicaid expansion, providing Medicaid managed care coverage. So if you’re a health plan at home and you’re watching this unfold, what are some of the things that you’re considering?

Massey Whorley

Yes, if you’re a health plan at home watching, you should be thinking about how this potential policy intersects with your organizational growth strategy. For plans heavily invested in the exchanges, the idea of allowing these new folks in the exchanges is, on its face, a really positive thing because there will be more covered lives.

However, there is a second order consideration that you need to think about concerning the risk scores of those individuals who would enter the market, and that really shouldn’t be taken for granted. Alternatively, plans who may have been looking at those states and seeing large potential managed Medicaid enrollment, that at first glance this is less positive for those plans. But there could be a long game where a new federal program would include a managed Medicaid option akin to Medicare Advantage.

Elizabeth Carpenter

Yeah. And this reminds me so much of the early days of the Affordable Care Act when there were various reforms. And the question would be, “Well, how does this impact plans?” And I think the answer really is, well, it depends on the plan, it depends on their strategy. It depends on where they operate, right? This isn’t a one-size-fits-all answer. And so speaking of no one-size-fits-all answers, let’s talk about how this policymaking can impact real people.

And we already see some difference in consumer experience, obviously, as it relates to healthcare and where people live. This strikes me as something that continues to add to that potential complexity. So, let’s talk about the impact on real people.

Massey Whorley

So this effort really should be viewed as a backup plan. Again, proponents of the ACA have tried multiple different ways to get folks in these states covered, to no avail thus far.

And that means there are some tradeoffs which will play out in timing, cost, and benefits. As I mentioned earlier, there are two options being considered, the exchanges and a new public program, but what we may eventually see is a hybrid or a stacking of the two.

If Congress chooses to go with the exchanges, these folks could have access to coverage as soon as 2022. That’s the clear upside. However, there are important questions about the level of out-of-pocket spending these individuals would have when they use their coverage, and there’s the question of benefits. Since exchange benefits may fall short of Medicaid required coverage in some instances, which could leave vulnerable individuals struggling. Alternatively, if they go with the new federal program, the runway is much longer to actually getting people covered.

Benefits and cost sharing would likely be more Medicaid-like. But all of that would take quite a while to design and implement. Not to mention if there would be a role for managed Medicaid or if it would all be fee-for-service.

That leads to the conclusion that is gaining traction with some people on the hill. First, allow these folks into the exchanges and then eventually migrate eligibility into the new program once it has been established.

Elizabeth Carpenter

Yeah. And Massey, as I hear you talk, all I can think about is the churn conversation that we have with this population and how that certainly sort of re-emerges. Not that it ever went away, but becomes sort of in the spotlight especially if we’re talking about sort of putting people in exchanges, transferring them, et cetera, et cetera. So another really interesting piece to watch.

You mentioned the difference in benefits and more specifically benefit design. If you’re a biopharmaceutical company listening right now, what are you thinking about as it relates to your patients really being able to access their drugs?

Massey Whorley

So Elizabeth, you kicked us off in this conversation talking about reconciliation. And certainly biopharma has a lot of things to pay attention to. So this may not be on your front burner, but it is worth paying attention to.

So on the one hand, getting more people coverage is great news because they can gain access to a regular source of care, identify and treat issues they may have, and increase compliance with their prescription regimens.

On the other hand, the path that this takes is really important. It has ramifications for drug pricing and reimbursement. Exchange plans function very differently from Medicaid fee-for-service or managed Medicaid, and lots of questions could emerge about formularies, rebates, and other things depending on the path.

Elizabeth Carpenter

Yeah, that makes sense. And there’s definitely a lot to talk about today, but I think we’re going to go ahead and start to wrap things up. I’d ask if there’s anything that we didn’t talk about that we should mention before we let our listeners go.

Massey Whorley

Absolutely. So I think, again, there is the cost to the federal government and how this competes with other congressional priorities. By taking this exclusively into federal control, all of the costs will be borne by the federal budget.

And moreover, the policy specifics of this will directly in the impact the price tag since, for example, exchange coverage is usually more expensive than Medicaid because exchange plans typically have higher rates than Medicaid.

And then the last piece of this is the procedural part. This legislative vehicle for the policy proposal will be the reconciliation package, and as a result, it will have to comply with the Byrd Rule. Coincidentally, the fact that this policy prevents a federal cost likely helps its procedural case.

Elizabeth Carpenter

Yeah, talk about a podcast episode, The Byrd Rule, and how it’s going to impact how all of us spend our next few months. So Massey, with that, I’m going to thank you for your time and for the really interesting discussion.

And thanks to everyone for joining Avalere Health’s Essential Voice. Please stay tuned for more episodes and visit us at avalere.com for more information. Have a good day.

The post The Coverage Gap and Medicaid Expansion appeared first on Avalere Health Advisory.

Transcription

Kevin: Hello and welcome to another episode of Avalere Health Essential Voice. Our podcast covers a wide range of healthcare topics. My name is Kevin Kissling. I’m a Senior Consultant on the Market Access team here at Avalere. I’m joined today by Rich Prest, Senior Director on our Client Solutions team; Jon Postlethwaite, Vice President, Supply Chain at Coherus BioSciences; and Chad Pulliam, Executive Director Channel Distribution and Trade Relations for Jazz Pharmaceuticals.

Before we start the questions, let’s do a quick round of intros. Jon, why don’t we start with you?

Jon: Yeah, hi, thanks for having me on the podcast today. So, as you said, my name is Jon Postlethwaite. I’m currently the Vice President of Supply Chain at Coherus BioSciences. Prior to that, I had varying degrees of responsibility at Portola Pharmaceuticals where I was responsible for setting up the supply chain and launching both of our commercial products in the US and the EU. I have a PhD in Biochemical Engineering and somehow found my way into supply chain, but I’m loving it so far.

Kevin: Great. Thank you, Jon. Chad?

Chad: Sure. Thanks, Kevin. Hi, everybody. I’m Chad Pulliam, Executive Director at Jazz Pharmaceuticals, as Kevin mentioned. I’ve been with Jazz for a little over a decade and during that time, have had a lot of experience with new product launches in both the retail and specialty space, and a lot of different changes in models and evolution of models.

Prior to that time, I was at a large wholesaler for several years, and in large pharma prior to that. I’m happy to be here and looking forward to the discussion.

Kevin: Thank you, Chad. Rich, we’ll turn it over to you.

Rich: Thanks so much, Kevin. I’m excited to be on the podcast today. Jon and I actually met on a previous project when 3PL distribution was involved, so I’m excited to explore that past history. I have about 18 years in the industry focused on distribution, patient services, digital health, and data, and I’m excited to see what we discuss today.

Kevin: Thank you, Rich. Once again, my name is Kevin Kissling. Prior to joining Avalere, I spent about 15 years at McKesson. I held a variety of roles during my time there. The last role that I held was Vice President of 3PL services where I was responsible for the RxCrossroads 3PL business.

Today’s episode will focus on third-party logistics. For those of you who don’t know, third-party logistics is a biopharma company’s use of an external logistics company to outsource elements of its distribution, warehousing, and fulfillment services.

I’d like to get your opinions on the process of choosing a 3PL partner. To get us kicked off, I’m curious about timing. Chad, about how long before anticipated approval of your product did you start the process of finding a 3PL partner? In retrospect, do you think you started that process early enough?

Chad: Thanks, Kevin. It’s a great question and I actually have a variety of answers. I’d say the sweet spot is anywhere between 12 and 18 months, especially for a new launch to market or if it’s the only product that you’re launching. I’ve done it in six. I don’t recommend that. That timeline only really works if you have an existing structure set up.

So, I’d say 12 to 18 months. The longer the better to fully understand the needs of what the product is, as well as understand the capabilities of the partners that you’re looking at.

Kevin: Thank you, Chad. Jon, do you have anything to add?

Jon: I agree with Chad. I think that 12 to 18 months is about right. When I came at it, we were pre-commercial. I remember very clearly sitting down with an external consulting company and specifically asking them the question, what is a 3PL? That’s how much we knew about it.

I think we probably started 18 months ahead of time. Portola got a complete response letter for the product that we were hoping to launch first, so that bought us an extra six months. I think we got lucky. If we hadn’t gotten that complete response letter, I think it would have been a rush. So, if you’re coming at it from a point of view of not even knowing what the acronym stands for, I agree with Chad completely. The longer the better.

Kevin: Yeah, and from my experience at RxCrossroads, we would tell our customers that the more time that you gave us to implement and work with you as a partner, the better. I would agree with that 18-month lead time, maybe even 24 if you can get it. The more time you have together, the better off you’ll be.

To Chad’s point, there have been times where on the RxCrossroads side, we did it faster and sometimes that was successful, but it was a challenge to get it done in that quick of a timeframe.

Rich: Jon, thinking about your former employer and its decision to choose a 3PL partner through a consulting firm, what was the thought process?

Jon: I think it was really that we didn’t know what we didn’t know. Portola was a small organization that was making that transition from a development organization to a commercial organization. We didn’t have the infrastructure in place to really know what we were looking for. As I said, the head of supply chain, the guy responsible for this, didn’t even know what the acronym 3PL stood for. I had it sketched out for me.

I was very lucky at Portola. I had a very understanding management team that brought in very good consulting firms to help us. As you talked about earlier on, Rich, that’s how you and I met. You drew the short straw in helping us navigate the 3PLs. I think the time that you took to educate us on what we were looking for really helped. At first glance, the 3PLs all sort of appear to be the same, but I don’t think they are. Helping us understand and find the right partner was really essential.

When we did this on the European side, we didn’t have that same level of guidance. With the benefit of hindsight, we didn’t select the right distribution partner in Europe in the same way that we did in the in the US.

Rich: That’s really interesting. It’s very kind of you to say that. It was a real pleasure helping you guys through that process and it didn’t go too badly because we’re still talking, right?

So Chad, tell us about your organization. Did you guys use consultants for shipping through 3PLs? What was that thought process?

Chad: Sure, yeah. Jon, I agree with you. If you’re a new manufacturer and you’re not sure what the acronym stands for, which to be honest, I didn’t when I got into this business either, I think it’s very important. Consultants are in a unique position to view products through a lot of different lenses and have insight to a lot of different capabilities from different 3PLs.

Jon, you mentioned there are a lot of 3PLs out there and lot of them do have the same core set of abilities. Even if you do understand what the 3PLs can offer and what those core abilities are, the landscape is constantly changing. There are new players coming to market, there are new models, there are new services being offered, and there are boutique services that are being offered.

So, you might hear of the big 3PLs and think you should definitely be with one of them, but dependent upon the product, you might be better serviced by a smaller shop or a different partner. You may not know that that partner exists because you only have visibility to a limited scope. Whereas, if you have someone who’s worked with a number of different products, a number of different manufacturers, and understands the entire landscape rather than just a snapshot of it, I think it could definitely help the business.

Rich: That’s really insightful. That’s sort of the privilege that consultants have to be able to see across multiple organizations and have the repeat experience that it’s hard to acquire as an individual organization.

So Jon, tell us in terms of selecting a consulting partner, what was the selection process?

Jon: So, I wasn’t actually involved in that process. I guess I just got lucky. I think there were a couple of consulting firms that we were working with. I was more on the operational side. So how do we stand the business up and actually get the drug into the channel? How do we make sure we have the right quality systems in place?

The commercial organization was also working with a consulting company and that’s where you came in on that distribution strategy. I think one of the challenges associated with how you manage a 3PL within the organization is that transition between the commercial organization and the technical organization. At Portola, we did that quite well. I’ve seen it done badly in other areas. So, I wasn’t really involved in the selection of the consulting partner. That was more on the commercial side.

Rich: Got it. Chad, what about for you guys? How did you choose?

Chad: I think the most important thing is industry knowledge, but in selecting someone that’s going to help me figure out how we’re going to bring a product to market and what partners we’re going to use, trust is the number one thing for me. You’re working with somebody, you’re trusting them with your business, and when that relationship is over, the consulting firm isn’t the one that’s holding the bag and carrying the business forward. The manufacturer is.

So for me, trust is one of those one of those key things that I need to have with the people I’m working with to really understand, what is the goal for the brand? What kind of partner are we looking for? What are the capabilities? And make sure there are no other agendas and that we’re both working toward the same thing. For me, trust is paramount.

Rich: I’m glad to hear that. I was worried someone was going say the cheapest price wins, but no one did.

Chad: It does doesn’t hurt. But trust is key and industry knowledge is second.

Rich: Yeah, that’s very sensible. So Jon, once you got started on the 3PL selection project, how long did the overall project take? Can you remember the key parts of it?

Jon: The selection process wasn’t that difficult. As I recall, there was an RFP, and we got the big players to come and present their strategies to us. Then core teams within our organization went on a road trip. We visited them and had a look around the different facilities and then the selection was made.

Once the selection was made, it was really the contracting and the implementation that took the most time. The actual selection process itself was reasonably quick. Again, I think that speaks to your help, Rich, in helping us navigate through it.

One of the challenges that we faced was there was a lack of ownership internally as to who was actually responsible for owning and selecting the 3PL partner. I think that could have led to some real churn on our side if we didn’t have the right consulting partner to help cut through that and focus on what’s important.

Rich: Yeah, I think that’s exactly right. Fond memories of that road trip to check out each of the main vendors.

Jon: The road trip was a lot of fun. I was visiting parts of the country I’ve never been to before, and I’m never happier than when I’m in warehouses. So yeah, it checked all the boxes for me.

Rich: That’s excellent. Chad, what about for you guys? How did that process work?

Chad: For us, it was about 3 months from RFP to selection, and that’s not including contract negotiation, testing, and all those things. As far as figuring out capabilities through the RFP, players, who you’re going to be working with, what management looks like, what the day-to-day looks like, fit from a brand standpoint, and the product that you’re going to be launching with them, I’d say three months.

After that the contracts can take anywhere from an hour if you sign the first thing they put in front of you, to months, depending on how those negotiations go.

Rich: Yeah, it’s another great reason to have a little buffer in your timeline because you really never know how long negotiations will take. I think that’s a great point.

Kevin: Hey, Chad, you mentioned that trust is really critical in working with a 3PL partner. I agree. I think relationship is critical. Finding an organization that’s culturally aligned with your organization is very important.

What would you say some other important factors are when considering 3PL partners and deciding on one of them?

Chad: Yeah, it’s a great question, Kevin. I’d say the ability to be nimble, the ability to pivot and go outside of the norm. Everybody wants the launch to go exactly how they plan, exactly how they forecasted. It’s the same with a product move or an existing product in the market. It’s going to change. Things are going to go sideways at some point and you may not even see it coming.

So, to have a partner that’s able to shift and be solution-oriented and think outside the box and apply learnings that they’ve had with other manufacturers to address your problem, and do that quickly, is huge. I’ve been a part of moves or launches where things go sideways, and you need a partner that can shift with you and keep the patients and brand in mind. To be able to pivot and shift without a whole lot of red tape and move with you is one of the most important things.

Kevin: Thank you, Chad. Jon, would you agree? Is there anything else that you thought of when considering your 3PL partners?

Jon: I would agree. I was looking at it from a very operational perspective, though. From a manufacturing perspective. So, what I was looking for was an organization that would really look after our baby, so to speak. Our first product was a very expensive biologic that a lot of us had spent a great deal of time working on. We wanted to feel that the 3PL partner was going to treat our product with the same kind of care and respect that that we did. So, what does the pick/pack process look like? How is that being done? How are you organizing your warehouse? What kind of shipping solutions are you using to receive the material on the dock? And how are you packing the material to ship it out of the dock, ultimately to patients?

From a quality perspective, let’s have a look at your quality systems. How are you dealing with deviations? How responsive is your quality team? That was really very important to me from the operational perspective. We had very limited inventory. It was really going to make or break the company. When we shipped pallets of this drug to the 3PL, we didn’t want to hear stories about broken vials. We wanted to hear stories about no problems, no deviations, shipments going out to customers on time and in-full. Invoicing being done, customer master files, etc. That was really what we were looking for, and we got it in the end.

Kevin: Yeah, that makes perfect sense. With manufacturers and biopharma companies bringing their first drug to market, that 3PL role is critical and the operational excellence that they need to consistently display can make or break the success of a product launch.

If you’re looking at third-party logistics companies, Chad, what stakeholders did you involve in the process? Who’s important to be in that room when meeting and selecting those 3PL companies?

Chad: I think Jon made a great point in his last comment regarding, deviations and QA. Your 3PL is an extension of the manufacturer itself. They’re housing product that is owned by the manufacturer. It’s another arm of the manufacturer, and you want to make sure that the right stakeholders and experts are in the room. So, supply chain is obviously a piece of that. QA is a huge piece of that, along with regulatory pharmacovigilance. Legal, obviously, is going to be a part of any agreement that you set up. I’d include finance in that as well, because they are going to be, in a lot of cases, doing your cash-to-order management as well.

Kevin: Yeah, finance always plays a critical role in that process. Jon, would you agree? Do you have any other stakeholders that you would add to that process?

Jon: I would add IT to that process. I think this is the one mistake that we did make. Our selection team consisted of supply chain, quality, accounting, and IT. What we didn’t do was clearly define who owned that relationship right from the start.

Supply chain was responsible for delivering the product to the 3PL and then making sure that shipments going out of the 3PL were done correctly, so we thought we owned the relationship.

Quality thought they owned the relationship because the product was still ours at the 3PL, so they had quality oversight.

Accounting thought that they owned the relationship because they were responsible for managing the order-to-cash process out of the 3PL, and then IT thought they owned the process because we were setting up data tunnels with inventory feeds coming into our Oracle system.

We ended up with about 4 or 5 different people who thought they owned the relationship. That’s where we got it wrong. I agree with everything that’s been said so far, but I would just add IT to that if you’re looking at building a seamless data tunnel back in so that you understand what your inventory levels are so that your salesforce can see how much is in stock, the expiration date, etc. You also need to understand from a revenue recognition position exactly how much you’ve sold and what your inventory asset prices are.

Kevin: Yeah, I think that’s a great callout, Jon. In looking back at the customers who we’ve worked with in the past, when you talk about how early to engage a 3PL partner, one of the things that takes a while to get set up and properly tested is the IT component. The longer that you can give your 3PL partner and your IT team to develop the data feeds and test them appropriately, the better off and more successful that you’re going to be.

From a contracting perspective, once you chose a 3PL partner, Chad, how long would you expect it would take to get contracts in place?

Chad: I’d say anywhere between 3 to 6 months. I know that’s a long timeframe but thinking about legal departments, the size of the companies that you’re working with, and the product itself all have a play in this. I mentioned earlier that it can be as quick as a week if you’re willing to sign everything and depending on whose paper you’re using, or if the 3PL is just willing to sign everything. That’s few and far between, obviously.

We managed to do it fairly quickly. I’d say 3 months is a pretty expedited review of contracts if you’re starting a new relationship, but it can take up to 6. I think that would probably be the extreme, though.

Kevin: Yeah, I agree. And another reason to start that engagement process early. Jon, what do you think? What have you seen?

Jon: I think it should be 3 to 6 months. I think we were closer to 6 months because we didn’t clearly define who the owner of the relationship was. So, everybody wanted their say in the contract. The more people you involve in the contracting process, the longer it takes. When you’re a small organization just getting started and you don’t have that clear ownership upfront, it can really complicate things. So, you think you’re okay and you’re really close to a final draft and then suddenly, somebody in the accounting department decides that they need to put their stamp on to it.

As I said, there were a few mistakes that we made, that was one of them. Three to 6 months seems reasonable. The overriding sentiment in all of this conversation seems to be that you can’t start this process too soon, but you can start it too late.

Kevin: Thank you, Jon. Both of you guys have been working with your 3PL partners for a while now. In knowing what you know now versus what you knew when going through the process, you’ve learned a lot. You’ve got a lot of experience under your belt with these 3PL partners servicing your product. If you had to do it again, would you adjust anything in the selection criteria that you used? Chad, what do you think?

Chad: I don’t know if I’d do anything differently or look at the selection criteria differently, Kevin, but I would stress that the business should be reviewed fairly often. Not quarterly, not more than once a year, but there are so many different partners out there and different models and enhancements that come in the distribution space and the 3PL space, that it’s important to make sure you’re still with the right partner. 3PL partners can change, players can change, so I think you should be consistently looking at the business, not just picking one and saying, “Okay, we’re married forever.” Make sure that the 3PL and the manufacturer are both still getting what they need out of the relationship

Kevin: Thanks, Chad. Jon, what do you think? Any changes, adjustments?

Jon: I’m going to think about this from the two 3PLS that we implemented, one in the US and one in Europe. In the US, we took the time to understand what we wanted before we went out and selected the 3PL partner. I don’t think I would change anything about the selection criteria on the US side. If I had to do it again, I would want to clearly define a business owner up front and make sure that everybody on the team understood that this is the business owner. It would be supply chain of course because everything revolves around supply chain. And then have made sure that everybody else understood they were there in an important but supporting role.

On the European side, I think we got that very wrong. We didn’t take the time to work with a consulting partner in the same way we did in the US, which was a real mistake. In Europe, it’s an even more complicated horizon, looking across all of the different countries. As a result of that, we put the wrong selection criteria in place, and we chose the wrong partner. So, Portola, or Alexion, and then AstraZeneca as it now is, is still working with the 3PL partner that we selected here in the US, but the 3PL partner we selected in Europe, we actually moved on very quickly after we selected them. We realized that we didn’t get it right, so we went back and chose somebody else.

Kevin: Great call outs. Thank you, Jon. Again, in looking back at things and judging the relationships that you have and what is working and some of the challenges, what do you think the one or two things that are needed to maintain a successful relationship with your 3PL? Chad, you mentioned a few things, but could you boil it down to one or two?

Chad: I’d say trust is a big thing, but also understanding the needs of the business. The manufacturer is partnering with somebody that is essentially helping them get product to patients. For me, the ultimate goal is the best and quickest and easiest way to get product in a patient’s or prescriber’s hand. It’s having a partner that fully understands, that is on board and willing to work with you to make sure that is in place, and if it needs to be changed, that it’s changed. Somebody that can bring solutions to the table.

Kevin: Thank you, Chad. Jon, what do you think?

Jon: I agree with that. I think then having the ability to clearly communicate that business need to the organization and not giving your 3PL partner conflicting messages. A lot of churn and a lot of inefficiencies can happen through mixed messaging from an organization. You might have an accounting team telling them one thing and then you’ve got an IT group telling them another thing and the quality group telling them something different, and the supply chain team telling them something different. You end up in a position where that trust that Chad’s talked about a couple of times can get eroded, and that’s the beginning of the end at that point.

Kevin: Yeah, so really understanding your needs, your requirements, your business objectives, and communicating them clearly and frequently. That’s great.

Rich: Great discussion. Jon, I’m just wondering, other than this internal confusion you’ve mentioned around who owned the relationship, is there anything else that surprised you through the selection process or after you selected the 3PL?

Jon: I don’t think so. I think choosing the right consulting partner is really important. I think if you select the right partner, then you have to be able to have that trust that they will guide you through the process. If you come across some surprises during that process, then perhaps your consulting partner hasn’t prepared you as well as they could have. Maybe you’ve selected the wrong partner. There will always be some surprises and some things that come up, but they shouldn’t be huge surprises that derail the business and prevent you from getting drug to patients.

Rich: Yeah. What about for you, Chad?

Chad: Jon, you make a great call out as far as choosing a consulting partner that is guiding you through the process. When you’re in an RFP for 3PLs, you’re dealing usually with sales teams, not necessarily the operations teams. The partners that you have helping guide the way can really help navigate those discussions and those capabilities and make sure you understand them.

One thing that can be surprising with 3PLs is how different they can be, whether it be systems or players and who you’re going to be working with. Having a partner help you understand those things and discuss those things is key. But I think Jon makes a great point that if they’re doing their job, there shouldn’t be a whole lot that surprises you during the RFP process or when you go to launch.

Jon: I do remember when we went through the selection process, all the main players came to the Portola office to present their pitch to us. All the big players turned up and they brought football teams of people with them. It was amazing. Then, the very last presentation was one of the big guys and 1 person turned up for the presentation. It was their head of sales. We all looked at this internally and we were like, what’s going on? Why is there only one person here when everybody else brought all of their other people? I remember thinking, wow, that’s not great. We’re not overly impressed by that.

Then we did the road trip. We went around and we looked at them all and lo and behold, the one guy who turned up on his own was the 3PL partner that we chose and was incredibly successful. I remember looking at you, Rich, when this guy turned up on his own and just basically saying, “What gives?” I remember you looking at us and saying, “You’ll see.”

When we’d made the selection at the end of it, I remember saying, “Well, I think this is the one we’re going to go with,” and I asked you very specifically if we made the right decision, and you said, “yes.” I said, “What would you have done if we hadn’t made the right decision?” And you sort of looked at me and smiled and said, “I’d have nudged you back in the right direction.”

That leads to the consulting side of things, right? We had a partner who understood the business but let us go through the process. You knew right from the start the right fit for us because of the extensive knowledge of what was out there, but we had to go through that process and make those decisions ourselves and the company that we thought were the outsiders were the ones we ended up choosing in the end.

Rich: Yeah, I think that’s the key part of a good process. If you’re meeting with the operational folks that you’re going to engage with rather than the sales team and you see that actual warehouse and where they’re going to do stuff, that often has a big influence on your final decision. And to your point about it being your first and only baby at that time was super important. You had the right partner to help you with that.

Anything else that you would do differently if you had to do it all again, Jon?

Jon: Other than what I’ve outlined already, just understand the ownership. Having a clear owner throughout the process would have saved us a lot of headaches in subsequent years. Other than that, I don’t think so. I learned a great deal during the process. We selected a great partner, and we had a successful launch with limited inventory of our product. That was in no small part due to our selection of the right 3PL for the product.

Rich: That’s terrific. Chad, any other thoughts about what you’d do differently or words of wisdom for folks who are looking to choose a 3PL?

Chad: I don’t think I’d do anything differently. Jon, you bring up a good point. Don’t shut anybody down during the process without talking to the person who’s guiding you. You mentioned that the one 3PL showed up with one person and it didn’t fly very well, and the organization ended up working with them. You relied on Rich to push you in the right direction. That’s what they’re there for. That’s why we work with consultants.

As far as closing advice, the biggest thing I’d say is just ask questions. Don’t ever make any assumptions. Set expectations with the 3PL partners as well as consultants as far as what you expect to get out of the process, what you expect from a partner, and talk about what’s important to you.

With 3PLs that I work with, if it’s the first time I’m meeting them, I’ll come out and say what’s true, that I can be very high maintenance, especially if there’s an emergency. Let them know what’s important to you, and ask questions. There is never a stupid question. You don’t ever want to make any assumptions.

Rich: Great advice. Chad, Jon, I really appreciate you joining us today and sharing these great experiences and lessons with the audience. And thank you all for tuning into Avalere Health Essential Voice. I hope you enjoyed Part 1 of this series in the Distribution space. Please stay tuned for Part 2 as well as other Essential Voice episodes. If you’d like to learn more, please feel free to visit our website at www.avalere.com. Thank you again.

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Transcription:

Michael: Hello and welcome to another episode of the Avalere Health Essential Voice Disease Education series in our second of several cell and gene therapy-focused podcasts. In this series, we will be covering topics on a wide range of therapeutic focus areas.

My name is Michael Kearney, and I’m a consultant in the Market Access practice here at Avalere Health. I’m joined by Jay Jackson, a Principal in our Market Access practice, and Megan Olsen, a Principal in our Policy practice.

In our last discussion, we explored challenges associated with cell and gene therapies related to coverage, reimbursement, and patient access. Today, we will explore value-based arrangements (VBAs) and the role that they play in facilitating access to these products.

Paying for value is certainly a theme throughout healthcare, and increasingly so in the context of high-cost drugs. Jay, let’s start with you. How would you characterize interest in or opportunity for value-based payment arrangements for cell and gene therapies? What’s driving it?

Jay: Thanks, Michael. I think it’s important to remember that while these products are generally targeted at a relatively small patient population for a rare disease, the pipeline for them is quite large, with 800 to 1,000 being studied right now.

Because they’re typically only administered once, that single administration has a high associated cost that’s not spread out over time. This leads to 2 primary approaches from payers like health plans and employers.

One is that they may seek to spread the financial impact out over time in a manner similar to traditional drugs. The other is that they may only want to pay so long as the product works. So, they want to track outcomes and either stop payments or receive a rebate if a product stops working relative to some baseline, as products come onto the market and generate additional evidence that they may not have had an opportunity to produce within a clinical trial if they came to market quickly and had accelerated approval.

Michael: Awesome. Thanks, Jay. Megan, I’d like to go to you now. What are we seeing in the market today in terms of uptake or adoption of these therapies? Where do we see it going in the future?

Megan: Yeah, good question. I would characterize where we are in the market today looking quite different from where we’ll be heading in the future. Jay spoke to the large pipeline. Today, there are a limited number of cell and gene therapy products on the market. They treat relatively small patient populations. The overall impact of them in combination is manageable for some payers, but we see that dynamic shifting as more products launch into the market. Some of these might treat larger patient populations and the cumulative impact of these, from a budget perspective, continues to rise.

We’re seeing this play out in our conversations with payers. As an evidence point to this, based on survey research that Avalere has conducted, we see that about 15% of payers report having innovative contracting arrangements in place for cell and gene therapies today. However, an additional 50% of payers express interest in adopting these types of innovative approaches for paying for cell and gene therapies in the future. So, I think that is an evidence point that speaks to how payers are viewing today differently from the future. There’s a lot to keep in mind here as stakeholders prepare for the future.

Michael: That’s great. Thanks, Megan. Switching back to Jay. Megan mentioned that about 15% of payers are utilizing VBAs. How are these currently being constructed? What do they look like? And can you talk about any potential challenges that stakeholders are facing as they’re thinking about launching these?

Jay: Yeah, absolutely. Earlier I mentioned paying over time and stop payments or rebates. Most of the contract structures that we’ve seen out there or that are being talked about include some variation of those components. But as you both noted, despite that high level of interest, there are not a lot of these contracts out in the market right now. There are a couple of reasons for this.

The first is that it’s hard to track patients as they go from one insurer to another. No one really does this. When a patient has been through several insurers, who gets the rebate? Who decides to stop payment if the outcome isn’t being met?

It can also be hard to track outcomes in some of these conditions that are being treated by gene therapies. Many of these conditions are slowly neurodegenerative, so it can be hard to detect clinical signals. This also involves more testing than a patient might otherwise undergo, especially if this is a disease that was previously an unmet need and there wasn’t a reason to do this testing.

The good news is that some products have very clear outcomes, things like complete remission of cancer and lack of bleeding events and hemophilia for some of the assets that we see in pipeline. But there’s definitely a mix there that needs to be addressed on a one-to-one basis for each product. Ultimately, whatever agreement is put in place, it can’t be overly burdensome on patients and their caregivers simply in the name of generating evidence or paying for performance.

Michael: Great insight, Jay. Megan, when we’re thinking about regulatory considerations, what are some of the things that stakeholders are thinking about or should be thinking about as they move into the space?

Megan: There are several. Jay spoke to the operational challenges that we see playing out, but it’s important to keep in mind some of the regulatory constraints that we see in the market that can inhibit adoption of these types of arrangements, potentially limit the scale of them in the market, or shape the design of how they’re playing out and the stakeholders who are involved.

Three primary barriers come to mind. There are several that must be considered as part of entering into any of these arrangements, but the three that I’ll talk about here are Medicaid best price, the anti-kickback statute, and then average sale price (ASP) and other price reporting metrics.

Best price can present an issue and inhibit providing a rebate or discount that is greater than the existing 23.1% rebate in the Medicaid program. That is because, if a rebate or discount is offered that is greater than that, it can trigger a new best price that has been applicable across all state Medicaid programs. So, there’s risk in putting more of the drug’s cost under these arrangements.

We have seen some interesting policy initiatives here to provide new optionality to get around or to mitigate the impact of these arrangements on best price. We saw the value-based purchasing rule finalized earlier this year. This rule sets out a new multiple best price option for manufacturers to pursue that allows best prices associated with value-based purchasing arrangements to not impact overall best price in the Medicaid program. The route for that is you establish multiple best prices for value-based purchasing arrangements.

There could be a proposed delay to the implementation of this value-based purchasing rule and associated flexibilities that we are monitoring closely. It’s looking like this will be moved to mid-2022, but it’s certainly an area that, given the importance of best price for innovative contracting arrangements, is one to keep a close eye on and to think through all of the options, whether it’s multiple best prices, bundled sale, or some of the other options within.

Another barrier that I mentioned is the anti-kickback statute that protects against incentivized utilization or spending in government programs. This is one that needs to be kept in mind across all contracting arrangements, but particularly in the context of innovative and value-based contracting arrangements as well. We have seen less policy activities specific to the anti-kickback statute, but there has been legislation and broader stakeholder conversations about this issue. So, it’s certainly one to watch out for.

Finally, there are a host of price reporting metrics that need to be kept in mind. One that rises to the top as we think about cell and gene therapies that tend to be physician administered is the impact on ASP. This is something that has not been contemplated in any policies that have been advanced to date, but in any innovative or value-based contract where a discount or rebate is being provided, you need to think about how that impacts ASP, and subsequently, how that impacts provider reimbursement downstream.

There is certainly a lot to think about in the context of these innovative arrangements for these high-cost, single administration cell and gene therapies. We need to keep an eye out for additional policy action, whether legislative or regulatory, under the new administration. This is a dynamic space with a lot of things emerging.

Michael: That’s great. Thank you, Megan. And thank you, Jay, very much. This is obviously a very interesting and timely discussion here on value-based arrangements. Next time, we’ll do a deep dive into approaches to patient support services in this space. Thank you all for tuning in to Avalere Health essential voice. Please stay tuned for more episodes in our disease education series. If you would like to learn more, please visit us at Avalere.com/podcasts. Thank you.

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