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 The company has held back on marketing the pharmacy benefit plan
while it talks to these groups, CVS said.
The plan, launched a year ago, is based on analyses by the Institute
for Clinical and Economic Review (ICER), a Boston-based group that
assesses effectiveness of drugs to determine appropriate prices.
Using ICER's cost effectiveness assessment, CVS decides whether to
include second or third medicines entering the market if there are
already similar ones in the plan.
Opposition to the CVS plan is part of much broader concerns cited by
drug companies and advocacy groups, many of which receive funding
from the pharmaceutical industry. Some say that ICER's analysis
based on additional years of "quality life" gained from a given
treatment is arbitrary and disregards the costs of drug development
and patient needs.
More than 50 groups, including drugmakers, PhRMA, the industry's
main lobby group, and other advocacy groups, have provided comment
during a public input period included in a review by ICER of its
assessment methods. Many asked ICER to eliminate price
recommendations from its efficacy analyses.
ICER has defended its methods, which are based on a widely-used cost
effectiveness analysis.
The soft rollout of CVS' ICER-related product comes as employer
health plan sponsors - its biggest clients - are showing increased
concern over their cost for new high-priced drugs, and are
considering refusing to pay for them at all, CVS Chief Medical
Officer Troy Brennan said in a recent interview.
If corporate customers follow through on that threat, CVS said it
could change tactics with the plan.
Rising drug prices, particularly for expensive specialty treatments
for severe or deadly conditions, have pushed annual U.S. healthcare
spending to $3.65 trillion, and made them unaffordable for many
individuals.
Earlier this year, Novartis AG <NOVN.S> launched Zolgensma, a more
than $2 million gene therapy for a rare but deadly disease called
spinal muscular atrophy.
The new CVS program, cited as an example of ICER's growing influence
on U.S. drug pricing, would not apply to such a breakthrough
treatment. It is a tiny plan by CVS standards as the company manages
pharmaceutical benefits for more than 102 million people and also
owns Aetna insurance and a national pharmacy chain.
NOT WIDELY PROMOTED
The plan's scope is limited to so-called me too drugs, those where
similar effective treatments already exist, and aims to pressure
drugmakers to set lower prices. For example, two of three very
similar drugs for migraine approved in 2018 could have been
excluded, but drugmakers set prices ICER deemed cost effective.
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CVS has limited sales and marketing for the plan while it talks to
patient groups who oppose it. About 240,000 CVS employees and a few
large clients' employees are enrolled thus far. The company declined
to comment on exact membership.
"We are not widely promoting this program," Brennan said, adding
that CVS is working to address patient groups' concerns.
Meanwhile, Brennan said some employers are considering refusing to
pay for million-dollar treatments like gene therapy. They are
saying, "I'm not going to cover these kinds of therapies no matter
what their comparative effectiveness is if they've got a really high
cost."
Large healthcare consultant and brokerage Mercer said it has begun
to field similar concerns.
"We have certainly gotten some plan sponsors saying 'What if we
don't cover specialty drugs?'" said David Dross, who runs Mercer's
managed pharmacy practice. Two years ago, it never received any such
questions, he said.
Steve Wojcik, an executive with the National Business Group on
Health which represents large employers, said he does not believe
many will take that drastic step.
Still, ICER President Steven Pearson said employers tell him they
worry about their ability to cover everything and have suggested
they might drop some high-cost treatments. He said employers can use
cost effectiveness analysis to help them manage their spending.
ICER has responded to outside criticism by meeting with patient
advocates and by adding new measurements for a drug's effectiveness,
such as the value of life years gained, which does not focus on
quality of life improvements, Pearson said.
Since 2015, ICER has published up to a dozen reviews each year of
drugs and classes of medicines.
Most U.S. private insurers now use ICER clinical and cost analyses
to inform coverage negotiations with drugmakers. ICER funding
primarily comes from a non-profit foundation, but drug companies and
health insurers provide some funds for ICER-related activities.
(Reporting by Caroline Humer; Editing by Bill Berkrot)
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