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Over Half of Medicare Advantage Beneficiaries Enrolled in Plans that Require Step Therapy for New Starts of Part B RA Biologics in 2019

Summary

Avalere analysis of 1,375 Medicare Advantage plans’ 2019 medical benefit drug coverage policies finds that 672—covering approximately 14.3 million lives—apply step therapy to at least 1 of the rheumatoid arthritis biologic drugs covered under Medicare Part B in 2019.

A variety of specialty drugs are used in the treatment of rheumatoid arthritis (RA). Currently, RA biologics may be covered either under Part B or Part D, depending on whether the drugs are administered within a provider’s office or self-administered by a patient. Starting in 2019, CMS allowed Medicare Advantage (MA) plans to require step therapy (ST) for Part B drugs for patients beginning a new course of treatment. The agency recently codified a look-back period of 365 days to determine which patients can be considered “new starts.” Plans have flexibility to cross manage between Part B and Part D drugs, as well as require patients to step through a Part B drug before gaining access to another.

The study sample includes 1,375 (30%) of 4,582 total MA plans and 18.2 million (82%) of 22.1 million total MA enrollees. Avalere’s analysis finds that 672 plans, accounting for 14.3 million lives, require ST for at least 1 of the RA biologics typically covered under Part B. Some of these plans require that RA patients step through multiple drugs before receiving a particular therapy. Another 312 plans, covering about 6.1 million lives, require stepping through at least 2 drugs, and some outlier plans require stepping through more than 4 drugs. In addition, 229 Medicare Advantage Prescription Drug Plans (MA-PDs) require that patients step through a Part D RA biologic before accessing a Part B RA biologic.

What’s Next?

Stakeholders and CMS are monitoring the experience with this policy in the first year of implementation to better understand the effect on patients, providers, and market dynamics. The impact of permitting ST for drugs in Part B may have been more limited in 2019 because plan bids and premiums were already set when CMS announced this new flexibility in August 2018. In the “Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses” rule, the agency finalized further clarifications regarding plans’ ability to apply ST, which includes off-label uses supported by evidence and medical literature. As a result, plans may expand their use of ST in 2020 and beyond. Notably, in implementing ST requirements, plans must account for Medicare national and local coverage determinations.

CMS expects that allowing MA plans more flexibility in controlling Part B product utilization will enable them to negotiate more effectively with manufacturers. Starting in 2020, savings realized from Part B ST programs must be reflected in a plan’s bid that is submitted to CMS in June each year. In the future, in addition to lower bids, the administration is hoping that increased negotiations in MA could translate to lower average sales prices for drugs in Medicare fee-for-service.

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Methodology

This analysis was conducted in June 2019 using Avalere’s PlanScape®, a proprietary database of health plan formularies and benefit designs. Analysis is based on data collected by Managed Markets Insight & Technology. The study included medical policies from 1,375 MA plans across 183 MA Organizations, covering over 18.2 million enrolled lives. MA-only plans and a subset of Employer Group Waiver Plans were absent from the study’s sample. Cost, Pace, and Demo plans were not included in the study.

Avalere selected immunology drugs that were covered under Part B, a biologic, and RA-indicated for inclusion in the study. Part B coverage was assessed by confirming that at least 1 of the 12 MA Contractors covered the product. Those products are tocilizumab, certolizumab pegol, etanercept, infliximab-dyyb, sarilumab, abatacept (with maltose), infliximab, infliximab-abda, rituximab, and golimumab.

Once the study plans and drugs were selected, Avalere summarized the resulting dataset. First, Avalere counted the number of MA plans requiring ST for at least 1 of the Part B biologics. Next, Avalere determined how many of those plans required stepping through 2 or more drugs. Avalere then calculated the total number of generic and brand drugs that enrollees must step through, per Part B biologic, to find the maximum number of steps for any of the study products. Finally, Avalere determined the number of MA-PDs that require using a Part D RA brand biologic—such as etanercept, adalimumab, or tofacitinib—before getting access to a Part B biologic drug.

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