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Specialty Pharmacy Continuum • July/August 2020
POLICY
COVID-19: What’s Next? continued from page 1
office- or clinic-administered IV medications to oral agents, self-administered injectables or home infusions. “Some of this is a short-term reaction to the lockdown, but I think a lot of patients will get used to the convenience of these formulations and specialty pharmacies could see a growth in prescriptions,” Dr. Fein said.
Losses, Gains With Mass Shift To Medicaid Dr. Fein anticipates a large-scale shift in Medicaid enrollment. As of June 3, roughly 42.5 million Americans had filed unemployment claims since lockdowns began in March, and many have now lost employer-sponsored insurance. “With an estimated 8 [million] to 20 million people expected to enroll in Medicaid, there will be some very big impacts on the pharmacy industry,” Dr. Fein said, noting the 2008-2009 recession also was followed by a spike in Medicaid enrollment (Figure). For example, retail pharmacies located in states operating under a Medicaid fee-for-service (FFS) model will benefit, since Medicaid tends to reimburse more for dispensing fees under an FFS model than do commercial plans or Medicaid managed care organizations. On the other hand, drugs are
reimbursed at their acquisition cost under Medicaid FFS, whereas Medicaid managed care organizations provide drug reimbursement at the published benchmark price, which can be higher than the acquisition cost, Dr. Fein noted. “More Medicaid fee-for-service dispensing will mean losses for the 25,000 340B contract pharmacy locations across the country that can earn substantial fees from 340B-covered entities,” because they acquire drugs at lower costs, Dr. Fein said.
specialty pharmacies in],” he explained. Chris Simpson, PharmD, the CEO of VitalRx, in Pelham, Ala., did not share that optimism, instead noting that smaller specialty pharmacies such as his are seeing a decrease in new prescriptions as fewer patients visit their physicians during the COVID-19 pandemic. He said he was concerned that large PBMs would try to increase their specialty pharmacy market share by merging with or acquiring these distressed pharmacies, or would seek to shut them down entirely. “It’s a fight to maintain a positive margin,
the relaxation of historically strict rules for refill quantities and prior authorization (PA) requirements, Dr. Fein said. “Commercial insurers have given lots of leeway in filling 90-day prescriptions, and under the CARES Act [the coronavirus relief bill], Medicare has also allowed reimbursement for 90-day scripts at retail pharmacies, which is not something you normally see in Medicare Part D plans,” he explained. Dr. Fein noted that the Centers for
and that’s the reality of the situation currently and in the foreseeable future,” Dr. Simpson said.
Medicare & Medicaid Services (CMS) also is allowing reimbursement for out-of-network pharmacies and home deliveries. Furthermore, CMS has relaxed—and in some cases, waived—PA requirements. “The interesting question is what happens when patients and providers start getting used to these relaxed scenarios,” he said. “When you squeeze the toothpaste out of the tube, it’s very hard to put it back in.” Caroline Carney, MD, the chief medical officer at Magellan Rx Management, the pharmacy segment of Magellan Health, headquartered in Phoenix, said her company has loosened its 90-day fill criteria and PA requirements for many conditions. However, whether the changes will be kept in the long term depends on federal, state and client guidance, as well as other factors. “It is an option to provide 90-day refills to patients who are on established long-term therapy that is effective and safe, particularly if the prescribing physician is comfortable with this,” Dr. Carney said. “But a 90-day fill for a patient just starting a new treatment could result in waste if it isn’t effective or leads to intolerable side effects.” Magellan Rx Management will decide whether to permanently relax PA requirements “diagnostic area by diagnostic area,” Dr. Carney said, adding that any permanent change would have to meet evidence-based guidelines for patient safety and cost-effectiveness.
More Opportunities for Smaller Specialty Pharmacies? Small- to-mid-sized specialty pharmacies that currently operate in the shadows of monoliths, such as CVS Specialty or OptumRx, could benefit from the ascent of Medicaid as a more dominant payor, Dr. Fein said, pointing to Medicaid’s preference for open distribution networks, which increase access to medications. “Manufacturers generally limit their distribution networks to their PBM [pharmacy benefit manager] partners, but if the government takes a larger role in creating distribution networks, manufacturers could have to potentially loosen up those networks [and allow smaller
The Future of Changes To Benefit Design One change that is taking place during the pandemic and that might persist is
‘Manufacturers generally limit their distribution networks to their PBM partners, but if the government takes a larger role in creating distribution networks, manufacturers could have to potentially loosen up those networks [and allow smaller specialty pharmacies in].’ —Adam Fein, PhD
Figure. Medicaid enrollment. Source: Drug Channels Institute analysis of National Health Expenditure Accounts, Office of the Actuary in the Centers for Medicare & Medicaid Services. Figure for 2019 reflects CMS projection. Figure for 2020 reflects estimates by Health Management Associates.
—David Wild The sources reported no relevant financial relationships other than their stated employment.
