Top Stories in Business & Health for June 5, 2017

Lawsuit claims Novo Nordisk and OptumRx conspired to inflate price of diabetes drug Victoza

Another diabetes drug-related proposed class action lawsuit was filed last week in a California district court. This one contends that Novo Nordisk raised the price of injectable diabetes drug Victoza (liraglutide) to cover rebates it paid to OptumRx, UnitedHealth Group’s pharmacy benefit manager. In return, OptumRx gave Novo Nordisk preferential placement on its formularies, according to the plaintiff in the lawsuit, Ruth Johnson, who is insured through an OptumRx- administered Medicare plan.

The list price of Victoza has more than doubled since 2009, from roughly $400 for a package of three pens to approximately $900. Johnson’s suit alleges that the companies violated the RICO Act, as well as state consumer protection laws, by engaging in extortion and deceptive conduct. In addition to seeking compensation for interest, damages and legal expenses, she is asking that the court require OptumRx to disclose the amount of rebates it received and Novo Nordisk to disclose the amount of the drug’s list price it retained, according to Law360.


Today's post is from the digest version of our Business & Health. To receive this free weekly report by email, sign up here.

To subscribe to Business & Health today, click here. Use offer code WEB35X to receive a 35% introductory subscriber discount.


AstraZeneca signs pay-for-performance contracts with Harvard Pilgrim

Following the lead of pharmaceutical companies such as Novartis, Eli Lilly and Co. and Amgen, AstraZeneca signed outcomes-based contracts with Harvard Pilgrim Health Care for two of its drugs—the blood thinner Brilinta (ticagrelor), and injectable type 2 diabetes drug Bydureon (exenatide extended-release). Brilinta is used to lower the likelihood of acute coronary events in at-risk patients, including those who’ve already had a myocardial infarction. Harvard Pilgrim will monitor the drug’s ability to reduce hospitalizations for repeat acute coronary events among members relative to those who are on a different oral antiplatelet regimen. With regard to Bydureon, Harvard Pilgrim will measure the hemoglobin A1c levels of members who adhere to the drug, to see if it helps them attain a predetermined HbA1c goal.  Under the contracts, AstraZeneca will charge Harvard Pilgrim according to the value the drugs provide to patients, rather than strictly on the volume sold. Should the drugs fail to meet the agreed-upon criteria, Harvard Pilgrim will pay less. 


Optum, Merck collaborate on value-based reimbursement models

UnitedHealth Group’s health services business, Optum, signed a multiyear agreement with Merck & Co. Inc. to develop and simulate models that link reimbursement for prescription drugs to patient outcomes. The companies will use Optum’s integrated claims and clinical records to develop and test the models, referred to as outcomes-based risk sharing agreements (OBRSAs). Using this “real world” data will allow the companies to assess the models across various patient populations, clinical settings and therapeutic areas. According to a statement by UnitedHealth Group, Optum and Merck intent to “publicly share analytic insights, findings and recommendations to help inform and facilitate the understanding and use of pragmatic approaches to OBRSAs in the health care system.” 


Nevada governor mulls drug pricing bill

Nevada governor Brian Sandoval is reviewing a controversial bill intended to regulate prices for insulin and a class of diabetes drugs called biguanides. The bill, which recently passed in the state Senate and Assembly, would require manufacturers of “essential” diabetes drugs to publish the list prices they set and the profits they make on the drugs each year. They would also have to disclose discounts given to PBMs and notify the state 90 days before changing prices on their products. Drug companies could be subject to financial penalties for noncompliance. In addition, if the bill is signed into law, pharmaceutical sales representatives would have to be licensed with the state and annually report certain information, including the details of any compensation or gifts given to providers. Key provisions of the bill were omitted before the senate vote in mid-May.


BCBS of Kansas City won’t offer ACA plans in 2018

Blue Cross and Blue Shield of Kansas City (Blue KC) announced that it would not offer or renew individual Affordable Care Act (ACA) plans next year in the 32 counties it serves in Kansas and Missouri. The insurer said in a statement that it has lost more than $100 million in the individual marketplace through 2016, calling the losses “unsustainable” and noting that the “uncertain direction of this market is a barrier to our continued participation.” The decision will affect approximately 67,000 members, according to Blue KC. According to The Wall Street Journal, unless another insurer steps in to fill the void, 25 of those 32 counties, or approximately 19,000 people, could have no ACA plan options in 2018.


Bundled payments in breast cancer care yield better outcomes, savings

As compared with the usual fee-for-service (FFS) system, a bundled-payment pay-for-performance program resulted in superior patient outcomes and more effective cost-control in a Taiwanese study of women with newly diagnosed breast cancer. The study included 4,485 women treated between 2004 and 2008 at hospitals participating in a bundled-payment initiative, each of whom was matched, using propensity scoring, with three control patients treated at nonparticipating hospitals. The five-year event-free survival rates for patients with stage 0 to stage III cancer were statistically significantly better for women in the bundled-payment group relative to controls (84.5 percent vs. 80.9 percent, respectively). Further, there was an average cost savings of nearly $1,400 per patient over the five-year period for the hospitals that received bundled payments ($17,860 vs. $19,230 for the FFS hospitals; this calculation did not take into account performance-based bonus payments the hospitals received). Additionally, adherence to quality indicators was significantly better in the bundled payment group (34.9 percent vs. 27.5 percent in the FFS group).  The study was published in the May 23/30 issue of JAMA Oncology.