Pharmacy Benefit Management During the Pandemic

This is a snapshot of this impact as well as immediate steps employers can take to ensure alignment with these trying times.

April 07, 2020

The rapid spread of COVID-19 has gripped every facet of the health care system including the pharmacy supply chain. From potential shortages of familiar drugs to a brand new COVID-19 pipeline, the “new normal” we are facing through this pandemic will undoubtedly impact your pharmacy benefit. Below is a snapshot of this impact as well as immediate steps employers can take to ensure alignment with these trying times.  

Potential for Drug Shortages and Supply Chain Disruption  

Dependence on Overseas Production

While it is unclear just how extensive supply chain disruption is at this point, multiple indicators hint at the potential for drug shortages. For one, an overwhelming majority of generics (over the counter and prescription) are synthesized by raw materials produced overseas (mainly China and India). Roughly 90% of the materials that make up amoxicillin and penicillin, for example, come from China. Additionally, 84% of the world’s supply of acetaminophen comes from China and India. These are just two examples among many that highlight our reliance on the global supply chain – a sobering reality exposed by this world-wide pandemic. Amid fears that countries will stockpile raw ingredients solely for domestic use or curtail exports of necessary materials, the public has been assured that U.S. drug companies have sufficient inventory to handle demand, at least for now.1,2,3

Development and Off-label Use of Existing Drugs

Additionally, although not yet proven in a formal clinical trial setting, a number of current drugs on the market have shown signs (in test tube studies) that they may be effective against COVID-19 (i.e., chloroquine, hydroxychloroquine, azithromycin, one protease inhibitor and albuterol inhalers). As such, a growing emphasis on off-label medication use poses a significant access threat to patients who may rely on these medications to treat lupus, bacterial infections, HIV, rheumatoid arthritis and asthma.4 The Food and Drug Administration (FDA) has officially issued an Emergency Use Authorization for chloroquine and hydroxychloroquine – long-time proven and effective go-to medications for the treatment of malaria. These drugs are now being widely donated to the Strategic National Stockpile for in-hospital treatment of COVID-19 patients as appropriate. Sandoz and Bayer have donated 30 million doses of hydroxychloroquine and 1 million doses of chloroquine, respectively.5 Similarly, Roche has donated 10,000 vials of its arthritis drug, Actemra, to the stockpile.6

Potential Impact on Patient Drug Regimen

Our dependence on foreign-sourced drugs, increased off-label distribution, a general shifting of resources, factory closures and global travel restrictions all beg the question of whether routine medication users will face serious access limitations in the face of this public health crisis. Beyond that, the COVID-19 pandemic further highlights existing shortcomings with the supply chain, namely drug price. In the case of insulin, for example, consequences of increased price and patient rationing may be dire in a time of crisis such as the COVID-19 outbreak. Restrictions on the amount of insulin an individual can fill at one time pose additional challenges. For example, a patient who must wait until he or she only has 3 days of insulin left before requesting a refill has a very small window in which to obtain the medication during a global pandemic response.7 Notably, the impact of COVID-19 on insulin users may translate across multiple disease states and chronic conditions.

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Industry Response and Recommendations for Employers

Given the current environment, pharmacy benefit managers (PBMs) and health plans are responding to current challenges by, for example, taking steps to limit stockpiling, extending current prior authorization (PA) criteria and easing refill limits and formulary and step therapy restrictions.4 Pharmaceutical manufacturers have begun initiating testing on experimental coronavirus treatments. Other research is centered on using the blood plasma of recovered COVID-19 patients to essentially share antibodies to the virus with those who have not yet gained immunity to it.9 The FDA issued the first authorization for an antibody test to advance this work.10

Below are key recommendations for employers as they seek to align with the industry’s response to COVID-19.

  • 1 | Stockpiling. Ask your PBM about what steps are being taken to limit stockpiling that can result in drug shortages and access limitations for patients.
  • 2 | Formulary and Utilization Management (UM) Restrictions. PBMs are easing formulary and UM restrictions to improve ease and access to medications. Ask your PBM and/or health plan what type of changes they may potentially be implementing to your formulary and utilization management strategy. Ensure that they are continuously reassessing their strategy based on close monitoring of drugs at risk of low supply.
  • 3 | Prior Authorization (PA). Your PBM may be extending current PA criteria (some by 90 days). Check to see if your members will be able to refill their medication without renewing an existing PA. Additionally, several health plans have waived PA requirements altogether for COVID-19 testing and treatments. This waiver applies to all medical costs associated with the treatment of the virus, including FDA-approved medications and vaccines when they become available.11
  • 4 | Quantity and Refill Limits. Ask your PBM how it is addressing quantity and “refill too soon” limits and evaluate if changing these limits is appropriate to enable patients on chronic condition medication to have access to an extra 30 days of supply. Limits may apply to maintenance and/or retail medications and could potentially exclude certain drugs (i.e., controlled substances). Ask your PBM to track the number of employee members who are taking advantage of early refills and to ensure that they are not obtaining more than a year’s worth of prescription medication. Since relaxing refill limits, CVS Caremark has already seen 239 members refill 30-day maintenance medications ahead of schedule. CVS also expects to see 20% growth in 90-day scripts.4 OptumRx is allowing 90-day supplies for patients with lupus and arthritis – two conditions significantly impacted by increasing off-label medication use for COVID-19 treatment.
  • 5 | FDA Approvals and Formulary Tier Placement. With coronavirus FDA approvals looming – new designations as well as brand-new treatments – employers should ask their partners about how they are monitoring certain drugs being explored for COVID-19 and pay careful attention to where these drugs ultimately fall on their formularies. Maintain an open dialogue concerning pipeline and tier placement. Some plans are offering an option for employers to implement a $0 copay tier for all COVID-19 related treatment. It will be required that COVID-19 vaccines, once available, will be covered at $0 out-of-pocket.
  • 6 | Promoting Mail Order. Consider drafting employee communications that stress the availability of mail order and ask your PBM if it is taking measures to ramp-up home delivery operations. Some PBMs are relaxing policies that restrict home deliveries.
  • 7 | Changes to Discount or Rebate Guarantees. Check to see if your PBM will be making any updates to your discount or rebate guarantees based on any changes to membership in your plan. Also, ask your PBM about the impact that a potential reduction in membership may have on any financial guarantees already in place.
  • 8 | Impact of Delays on Overall Drug Spend. Check with your PBM/health plan to see if significant delays to generic or biosimilar manufacturing could have an impact on your overall drug spend.
  • 9 | More Medications Prescribed Through Telehealth. Be aware that PBMs may be allowing the prescribing of controlled substances through telehealth. OptumRx is doing this and is also allowing up to a 90-day supply of Schedule II substances.
  • 10 | Compounding. Be aware that drugs like hydroxychloroquine are now allowed to be compounded by pharmacies, introducing the potential for price gouging. Ask your PBM how it is monitoring pharmacies to prevent fraud, waste and abuse.
  • 11 | Potential Changes to Outpatient Infusion Routine. Consider that outpatient medication infusion routines may be severely impacted by COVID-19. Talk to your partners about ways to explore alternative sites of care and/or encourage patient home infusions.

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