As the nation’s biggest health insurers jockey for supremacy, try drug makers should brace for added pressure because doctors are likely to face stingier reimbursement over the next few years. And cancer treatments, viagra 40mg in particular, rx are expected to be targeted, according to a report from Moody’s Investor Service.
The changes reflect ongoing efforts insurers are making to diversify and cut costs in response to the Affordable Care Act, which is now prompting a flurry of merger talks. Earlier this month, for instance, one big deal was announced as Aetna agAET +0.41%reed to pay $37 billion to acquire Humana HUM +0.70%.
For drug makers, this sort of consolidation only presents challenges, Moody’s analysts say. The strengthening market share among insurers “will escalate reimbursement pressure over time, which will reduce the use of some pharmaceutical products and depress pricing on others,” they write.
This is not to say that drug makers will face such pressures immediately, since insurers are more likely to be focused on more pressing short-term goals as integrating systems and benefit plans. But Moody’s sees concern about drug spending accelerating over the next five years as integration issues recede.
You may recall that many cancer treatments are administered by physicians and other healthcare providers, rather than being dispensed by pharmacies and administered by the patient. Although Moody’s notes that oncologists have considerable latitude in selecting medications.
And given the recent spate of new, high-priced cancer treatments, the ratings service believes these drugs are especially juicy targets for insurers, even if any changes to reimbursement policies are largely incremental.
“By and large, cancer treatment in the U.S. has not been subject to rigorous cost controls by health insurers or by Medicare,” Moody’s writes. “Cancer drugs are typically reimbursed under a fee-for-service payment model, but we believe this will begin to slowly change.”
To make this happen, the ratings service suggests that insurers will likely to increasingly explore a pay-for-performance model. Under this scenario, health care providers are rewarded for meeting specific treatment protocols while insurers link reimbursement to a drug’s value, based on various metrics.
Using this approach, Moody’s writes that “the same drug could get reimbursed differently for different tumor types if the clinical data shows different levels of effectiveness.” Among the drugs Moody’s sees as being vulnerable are Merck’s Keytruda and Bristol-Myers Squibb’s Opdivo.
Anthem is trying another variation. Last year, the insurer began changing how it paid for cancer care and pushed oncologists to adhere to standardized treatment guidelines. The program offered oncologists a $350-a-month payment for each patient who was on one of its recommended regimens
Oncology practices, you may recall, buy cancer drugs upfront and generally are reimbursed by Medicare and insurers based on a percentage of the cost of drugs they administer. But of course, this can create an incentive to use more expensive treatments.
As we recently noted, Anthem reported preliminary findings that found between July and December of last year, 616 practices registered a total of 5,538 patients in the program in the three types of cancer that were initially included – breast, colorectal and non-small cell lung cancer.
The program included about 64% of Anthem members with those three cancers. And of those patients who were signed up, 63% of those with breast or lung cancer were given an approved regimen, while the figure was 72% for patients with colon cancer.
By Ed Silverman
Original article: http://blogs.wsj.com/pharmalot/2015/07/13/health-insurer-mergers-will-pressure-pharma-over-high-cost-drugs/