Healthcare World Living "Month-to-Month" While Congress Debates Reform

In a wide-ranging discussion, panelists at the 12th annual meeting of the Pharmacy Quality Alliance discuss the role of pharmacy benefit managers, the prospects of changes to Medicaid, and how the cloud of uncertainty affects planning decisions.

While the Republican-led Congress debates which pieces of the Affordable Care Act (ACA) it will scrap and which it will keep, the players in healthcare must operate in the condition they hate most of all: uncertainty.

Stakeholders from across healthcare and pharmacy shared what it’s like to serve customers large and small while waiting for answers during a panel discussion at the 12th annual meeting of the Pharmacy Quality Alliance in Baltimore, Maryland.

Featured were Clay Alspach, JD, principal of Leavitt Partners; Mike Anderson, PharmD, chief pharmacy officer for UnitedHealthcare Medicare and Retirement; Jonah Houts, MBA, vice president of Corporate Government Affairs, Express Scripts; Tripp Logan, PharmD, vice president, Logan & Seiler Inc, and senior quality consultant, MedHere Today Consulting; and Lori Reilly, JD, executive vice president, Policy, Research, and Membership, for the Pharmaceutical Research and Manufacturers of America (PhRMA). Clifford Goodman, PhD, of the Lewin Group moderated the panel.

The group gathered as the Senate takes up a version of the American Health Care Act (AHCA) that has passed the House but is almost certain to change. Meanwhile, the Trump administration weighs what to do about subsidies for health plans in the individual market that were approved under the ACA, but challenged for years by Republicans. Insurers have said without those subsidies they won’t stay in the market, and United Healthcare and now Aetna have already left.

Goodman noted that Alspach had described the situation as a “month-to-month scenario,” and the panelists nodded in agreement. These are challenging times for an industry accustomed to planning months, years or even decades ahead.

Houts said, for example, that CMS formulary deadlines will soon arrive for 2018, and “We’re not sure what schema we’re operating under.” Tax reform might come, but it might not. “It’s that cloud of uncertainty,” he said. “Your clients say, ‘what’s the best advice?’ and we have to be creative.”

Reilly agreed, but also painted the picture as slightly more dire. PhRMA found its head spinning last week when White House Budget Office Mick Mulvaney said, without warning, the administration was weighing mandatory rebates in Medicare. “Clay was being generous when he said it was month to month," she said. "It’s more like hour to hour.”

PhRMA members are especially vexed because deciding whether to invest in research is a 10- to 15-year commitment, Reilly said. That makes it important to understand what the rules and incentives are, she said.

Goodman asked Logan how uncertainty affects planning at the community pharmacy level. Today, Logan said, the challenges manifest themselves at the individual level. “There may be access issues because of cost, or a patient can’t receive care because of network issues. The patient may get a referral, but they can’t use that pharmacy, which is a problem in rural areas.”

Anderson said while there’s more stability in Medicare, “Cost pressures are everywhere.” Especially for Medicare patients with standalone prescription drug plans (PDPs), the likelihood of narrow pharmacy networks is high.

PBMs and Drug Access

Recent debate about the cost of drugs, access, and the role of pharmacy benefit managers (PBMs), like Express Scripts, have raised the question: do PBMs keep costs down or cause them to ultimately climb higher? Some groups have charged the complex system of discounting serves to keep list prices of essential drugs artificially high, hurting groups like those with type 1 diabetes, who must have insulin to live.

Logan said PBMs play an important role, but that when it comes to organizing independents to participate in PBMs, it can be “like herding cats.” And Houts said some independents who joined PBMs didn’t understand what they were joining. “Everyone should go into these arrangements with their eyes wide open,” he said.

Reilly said the biggest challenges today are with benefit designs that require coinsurance for example, even if insulin is discounted for the payer, the patient’s portion is likely tied to the list price, “and that can be significant.”

“Many patients have one large deductible: pharmacy plus medical. It may be $4000 or $5000,” she said. “People are going to the pharmacy and paying list price, and never really feeling like you have insurance.”

Enter PBMs, which Reilly said have the ability to “pick winners and losers” by giving a competitor drug a lower price based on getting a larger discount. “Everyone benefits from that, I would argue, except for the patient.”

Houts pointed out that high deductible plans were increasing in popularity in the years prior to the ACA. The key, he said, is to limit out-of-pocket expenses, or they affect adherence. Logan agreed. Each year, he sees the effect of the “donut hole” on patients in Medicare, which is slowly closing under the ACA.

The panel discussed the need for price transparency, better access, and controls on utilization—and then Goodman asked Alspach how the proposal to impose per capita caps on Medicaid would affect drug access in that program, as well as why the issue is getting so little attention.

Alspach said that while Republican governors Rick Snyder of Michigan and John Kasich of Ohio have been very active on trying to keep expansion, both are nearing the end of their time in office, and it remains to be seen what will happen next.

Said Houts, “There are going to be 51 different ways to do this.”

He noted that unlike the federal government, which can run a deficit, states must balance their budgets, and it will be common for states to hit points around August or September when it’s clear they don’t have enough money to cover Medicaid prescriptions for the rest of the year. Solutions like allowing only 2 branded prescriptions or caps on the number of drugs will be more common.

Logan, who described his community as the heart of “fried chicken and catfish” country, said, “These are vulnerable patients. It’s really hard to make informed decisions about their health.”

The long-term problem, said Alspach, is “the entitlements are growing and growing, and squeezing out all the other discretionary spending.” The challenge for the federal government is to find ways to do more on the value side, to get more for the money that is spent.