The title "Reshaping the Relationship Between Physicians and PBMs" suggested that the Sunday session at the 2017 American College of Rheumatology’s Annual Meeting in San Diego, California, would focus on reconciling the goals of providers and pharmacy benefit managers (PBMs), but physicians’ challenges in dealing with PBMs quickly became the primary focus of the panel discussion.
The session, moderated by Colin Edgerton, MD, kicked off with a presentation by Dan Kelly, PharmD, a representative of the prior authorization software company CoverMyMeds. Kelly acknowledged that prior authorization for medicines is a burden for all healthcare stakeholders, from pharmacists (who must engage in additional communication with prescribers) to drug makers (who see sales numbers decrease) to payers and PBMs (who undertake a labor-intensive review process and face patient frustration).
Yet prescribers may shoulder the bulk of the work related to prior authorization. Kelly stated that in a 2016 survey of an undisclosed number of physicians, 75% of respondents said that prior authorization posed “high” or “extremely high” burden on their practices, and reported an average of 36.6 authorizations—requiring an average of 16.4 hours total—per week. Perhaps most concerningly, 90% or respondents reported that prior authorizations delay access to necessary care.
“We have no evidence to suggest that PA is going to go away or decline in volume,” said Kelly, who pointed to the increasing volume of specialty drug prescriptions, steeper renewal requirements, insurance expansion, new therapeutics, and formulary updates as drivers of increased prior authorization volume. Furthermore, decreasing efficiency—which Kelly blamed on the need to fill out manual forms with complex clinical criteria, the number of different insurance plans, regulatory variance, and lengthy review times—can delay approvals.
Kelly proposed that electronic prior authorizations could help reduce the burden presented by prior authorizations by initiating the process at the point of prescribing, and by cutting down on the time needed to achieve a decision from the payer.
Rheumatologists who commented on Kelly’s presentation during the question-and-answer period were skeptical of the willingness of PBMs to engage with a system that would speed patient access to drugs if shareholders benefit financially when access is delayed or denied. One clinician noted that his practice has experienced a marked increase in requirements for prior authorization, not only for expensive biologics to treat rheumatic diseases, but also for older, less-expensive medications such as steroid therapies or methotrexate.
Brent Clough, CEO of Trio Health, a company that collects healthcare data and publishes its findings, also shared a critical view of PBMs and payers. In fact, he said that his presentation was "about throwing payers and PBMs under the bus.” Clough used Trio Health's data on Harvoni, a hepatitis C drug, as an illustration of what he views as a PBM blockade to patient access to medicines. While Harvoni has a notably high list price at approximately $90,000 for a 12-week course of therapy, Clough pointed to Gilead Sciences’ disclosed data that Harvoni’s current average price to Medicaid is less than $10,000 per course after negotiations (and approximately $30,000 to commercial payers), making Harvoni a far less costly therapy than indicated by its list price.
However, Clough says, denials of coverage of the drug have been steadily increasing even as the price of Harvoni drops—in 2014, approximately 7% of patients were denied the therapy, and that proportion of patients grew to 37% in 2016. “They’ve hoodwinked different payers and different plans into denying these patients,” said Clough, who added that, on average, patients had to wait 147 days, due to numerous denials from PBMs, to initiate therapy with Harvoni.
Medicaid recipients also experience wide disparities in access according to location in the United States, with initiation rates ranging from approximately 0% in Alabama to over 90% in Connecticut. “With the current administration, there’s talk about further cuts to Medicaid,” Clough added, “Quite frankly, the situation is going to get worse.”
Finally, Sean Fahey, MD, chair of ACR’s insurance subcommittee, provided a glimpse into how ACR has been engaging with PBMs to date, and noted the discrepancy in objectives: while the goal of the PBM is to generate revenue, he said, ACR wants to preserve patient access to necessary drugs.
ACR’s insurance subcommittee communicates with payers and PBMs on coverage policies that relate to some of the most expensive drugs prescribed: originator biologics and biosimilars. “We’ve tried the honey approach, and we’ve tried the vinegar approach,” said Fahey, but “our comments rarely if ever seem to influence their final decisions, and we have not been approached by the PBMs as much as we have [been by] individual payers.”
Among the concerns that the subcommittee is attempting to address with PBMs and payers are the following:
- Formulary issues. Some patients report receiving notices from PBMs warning them that their therapies will no longer be on formulary, and that they must switch therapies. Fahey called these notices a “scare tactic” that can often be resolved via a prior authorization.
- Step edits. Fahey points out that, because there is little data to document the effect of step edits on patients, it can be difficult for clinicians to push back against policies that force patients to fail to respond to a cheaper therapy before initiating a more expensive one, such as a biologic.
- Nonmedical switching. “More and more, payers and PBMs are trying to shift from one [tumor necrosis factor] inhibitor to another, more so in the past 6 months, we’ve seen policies asking patients to switch from a TNF inhibitor to a non–TNF inhibitor, even if they’re stable on therapy,” said Fahey, who added that, with biosimilar therapies, “the lines are blurry,” as some emerging data suggest that switching to a biosimilar of a reference therapy may be feasible.
Looking ahead, Fahey said that he hopes alternative payment models could help eliminate some of the burdens of prior authorizations and step edits, and said that collecting greater real-world data to present to payers an PBMs will be critical.