Let's talk about insurance

[patryn]

At the risk of losing my Exhuberant pumper status, I have been doing some research into insurance coverage and formularies and the impact it has on Afrezza uptake.  

Quite a few people have been looking for the holy grail of tier2 or preferred formulary coverage to drive Afrezza uptake and sadly I do not believe that will be the case.  I have been analyzing most insurance plans that have public information available and the key does not seem to be moving from tier 3 to tier 2.  Rather the key seems to be the difference between being covered and not covered.

Here's the price breakdown:

Afrezza annual costs

Not covered - ~$300 per month = $3600 a year.
Tier 3 - ~ 40-60 per month = $500 - $700 a year
Tier 2 - ~ 20-30 per month  = $250 - $400 a year
Generic - ~0 to 10 per month = $0 - $120 a year

You can see that the big price point difference is from not being covered to being covered.  The Tier 3 to Tier 2 change (since it will never go generic) is only $200-$300 a year versus almost $3000 difference between not covered to covered in some way.

Currently we have 26% covered (at whatever tier) and 74% restricted or not covered.  That's what SNY needs to be working on - getting more on the no restriction covered list.  In addition, they need to just be lighting a fire under their salespeople to sell Afrezza and evangelize on the benefits of the product.  No excuses about slow rollout or insurance coverage at this point.  We can clearly see that just moving to covered will likely be enough to get most people to use Afrezza if it has benefits over other forms of rapid acting insulin.

[ricguy]

Nov 6, 2015 16:21:06 GMT -5 patryn said:

At the risk of losing my Exhuberant pumper status, I have been doing some research into insurance coverage and formularies and the impact it has on Afrezza uptake.  

Quite a few people have been looking for the holy grail of tier2 or preferred formulary coverage to drive Afrezza uptake and sadly I do not believe that will be the case.  I have been analyzing most insurance plans that have public information available and the key does not seem to be moving from tier 3 to tier 2.  Rather the key seems to be the difference between being covered and not covered.

Here's the price breakdown:

Afrezza annual costs

Not covered - ~$300 per month = $3600 a year.
Tier 3 - ~ 40-60 per month = $500 - $700 a year
Tier 2 - ~ 20-30 per month  = $250 - $400 a year
Generic - ~0 to 10 per month = $0 - $120 a year

You can see that the big price point difference is from not being covered to being covered.  The Tier 3 to Tier 2 change (since it will never go generic) is only $200-$300 a year versus almost $3000 difference between not covered to covered in some way.

Currently we have 26% covered (at whatever tier) and 74% restricted or not covered.  That's what SNY needs to be working on - getting more on the no restriction covered list.  In addition, they need to just be lighting a fire under their salespeople to sell Afrezza and evangelize on the benefits of the product.  No excuses about slow rollout or insurance coverage at this point.  We can clearly see that just moving to covered will likely be enough to get most people to use Afrezza if it has benefits over other forms of rapid acting insulin.

Excellent point and right on the money.  In your opinion what time frame is a reasonable expectation for SNY to get that coverage % to a point where we are at 74% covered as opposed to 74% not covered?

[me]

Nov 6, 2015 16:21:06 GMT -5 patryn said:

At the risk of losing my Exhuberant pumper status, I have been doing some research into insurance coverage and formularies and the impact it has on Afrezza uptake.  

Quite a few people have been looking for the holy grail of tier2 or preferred formulary coverage to drive Afrezza uptake and sadly I do not believe that will be the case.  I have been analyzing most insurance plans that have public information available and the key does not seem to be moving from tier 3 to tier 2.  Rather the key seems to be the difference between being covered and not covered.

Here's the price breakdown:

Afrezza annual costs

Not covered - ~$300 per month = $3600 a year.
Tier 3 - ~ 40-60 per month = $500 - $700 a year
Tier 2 - ~ 20-30 per month  = $250 - $400 a year
Generic - ~0 to 10 per month = $0 - $120 a year

You can see that the big price point difference is from not being covered to being covered.  The Tier 3 to Tier 2 change (since it will never go generic) is only $200-$300 a year versus almost $3000 difference between not covered to covered in some way.

Currently we have 26% covered (at whatever tier) and 74% restricted or not covered.  That's what SNY needs to be working on - getting more on the no restriction covered list.  In addition, they need to just be lighting a fire under their salespeople to sell Afrezza and evangelize on the benefits of the product.  No excuses about slow rollout or insurance coverage at this point.  We can clearly see that just moving to covered will likely be enough to get most people to use Afrezza if it has benefits over other forms of rapid acting insulin.

Patryn, I appreciate your level-headed contributions to this board.  Regarding the comment about the key above, however, it is actually more important than you realize.  Typically, fewer than 10% of all drugs dispensed under group plans with 3-tier plan designs are Tier 3 (or non-preferred brand name) drugs.  While the gap between Tier 2 and Tier 3 copays is usually $15 to $20 (except for government and union plans, which typically have smaller gaps), that gap is extremely effective in driving preferred brand name usage (Tier 2) over non-preferred brand name usage.  A change to Tier 2 would overnight increase the use of Afrezza.

As for the "not covered" status, I'm still not certain of the exact definition formularylookup uses for "not covered" (I know, you would think it's obvious, but it's insurance).  Many people will define a drug as "not covered" if the drug does not appear on a plan's formulary, but just because a drug is not on a plan's formulary, that does not mean the drug is not covered.  In most cases, it is covered and is considered a non-preferred brand name drug, but it is "covered" nevertheless - and usually with additional hurdles of step therapy and prior authorization.

Moving to Tier 2 not only lessens a member's OOP payment, but also carries with it the plan's "stamp of approval."  In fact, if the PBM had its druthers, the member would take only its Tier 2 drugs (where it's rolling in the rebates and other pricing incentives) and mail order brand name drugs (for rebates) and mail order generics (for excessive margins in their owned mail order operations).  You would be surprised at how often the total cost (member cost plus plan cost) of a generic drug at mail order is sometimes double, triple or more than three 30-day supplies at retail!

I suspect that reductions in the "not covered" plans tracked by formularylookup will have only a minimal impact on Afrezza's uptake...the real bump will be when Afrezza makes it to Tier 2.

GLTA longs!

[lakers]

Attachment DeletedAttachment DeletedAttachment Deleted

Dated 11/06/15. Sny needs to rapidly expand CVS and UHG mkt access. Tier 3 needs to be no PA required.

Express Scripts PBM Covers 96%, 1465/1472 plans

CVS Caremark RX Covers 12%, 38/1326 plans

UnitedHealth Group, Inc. Covers 7%, 60/284 plans

[sluggobear]

Hello "ME" - I am seeing that even when Afrezza is covered, it requires PA most of the time. That appears to be a very significant barrier for all concerned in the process.
Do you have any insight or knowledge about how, why, and when insurance companies modify PA status? Thanks.

[nylefty]

For what it's worth, I'm covered by a CVS/Caremark prescription plan (offered by my former employer) and have been getting prescriptions for Viagra or Cialis for several years (I was treated for prostate cancer 18 years ago).

Every year CVS/Caremark says I need prior authorization and every year my doc's office sends a form letter and my med is approved (the doc is the radiation oncologist who treated me in 1997).

Getting approval seems to be a no-hassle transaction, but I'm looking at it from the outside. Maybe in time, getting PAs for Afrezza will become so routine that form letters will be ready to go and will suffice.

[kball]

^ Party at lefty's place.

[dreamboatcruise]

me... If doctors are being given discount cards to give to patients (or patients otherwise learn of it) that would make tier 3 just as good as tier 2... for them, with a slight hit to profitability. I don't think this is quite like the difference between flonase and Nasacort where a doc is just going to say whatever name he thinks is likely to be preferred for most plans because there really isn't a difference. I'd be thrilled with widespread tier 3. If we can get covered with no pre-auth up over 50%, I think it would dramatically effect prescription rates. Maybe someone with real prescribing experience could correct me, but it seems that if over half of patients are likely to be turned down at the pharmacy then the overworked doctors (except for true believers in Afrezza) are unlikely to start prescribing.

[chc]

Here is the cost of 5 boxes of Afrezza , each box containing 60-4unit and 30-8unit cartridges from my United HealthCare Medicare Advantage PPO insurance through my previous employer. This is a mail order from Optum RX with each prescription a 90 day supply. The initial prescription was written for a 90 day supply with 3 refills. Afrezza is listed as a Tier 3 drug requiring Prior Authorization, so prescription was initially denied by the insurance company, then the doctor completed the necessary appeal forms, and then submitted a new prescription for 90 day supply with 3 refills, which finally was approved by the insurance.
Total Cost for 5 boxes of Afrezza on initial prescription was $1229.82 with member paying $44.81, Plan paid $1135.22, Manufacturer paid $49.79.
Total Cost for 5 boxes of Afrezza on 1st refill order was $1229.82 with member paying $61.49, Plan paid $1168.33, Manufacturer paid $0.
The patient is using on average 8 units of Afrezza with each meal, and occasionally a correction dose of 4 units. Patient is type 2 and also taking a basil insulin. Patient is keeping BG well controlled without a CGM. Thanks you Al Mann for Afrezza.
I will also add that my Insurance is showing the boxes of 60-8unit and 30-4 unit cartridges and the boxes with 12unit cartridges as NC for not covered.

[peppy]

Nov 6, 2015 20:21:23 GMT -5 chc said:

Here is the cost of 5 boxes of Afrezza , each box containing 60-4unit and 30-8unit cartridges from my United HealthCare Medicare Advantage PPO insurance through my previous employer. This is a mail order from Optum RX with each prescription a 90 day supply. The initial prescription was written for a 90 day supply with 3 refills. Afrezza is listed as a Tier 3 drug requiring Prior Authorization, so prescription was initially denied by the insurance company, then the doctor completed the necessary appeal forms, and then submitted a new prescription for 90 day supply with 3 refills, which finally was approved by the insurance.
Total Cost for 5 boxes of Afrezza on initial prescription was $1229.82 with member paying $44.81, Plan paid $1135.22, Manufacturer paid $49.79.
Total Cost for 5 boxes of Afrezza on 1st refill order was $1229.82 with member paying $61.49, Plan paid $1168.33, Manufacturer paid $0.
The patient is using on average 8 units of Afrezza with each meal, and occasionally a correction dose of 4 units. Patient is type 2 and also taking a basil insulin. Patient is keeping BG well controlled without a CGM. Thanks you Al Mann for Afrezza.
I will also add that my Insurance is showing the boxes of 60-8unit and 30-4 unit cartridges and the boxes with 12unit cartridges as NC for not covered.

welcome chc, I am glad you are here.  thank you for the post.

[peppy]

Nov 6, 2015 20:21:23 GMT -5 chc said:

Here is the cost of 5 boxes of Afrezza , each box containing 60-4unit and 30-8unit cartridges from my United HealthCare Medicare Advantage PPO insurance through my previous employer. This is a mail order from Optum RX with each prescription a 90 day supply. The initial prescription was written for a 90 day supply with 3 refills. Afrezza is listed as a Tier 3 drug requiring Prior Authorization, so prescription was initially denied by the insurance company, then the doctor completed the necessary appeal forms, and then submitted a new prescription for 90 day supply with 3 refills, which finally was approved by the insurance.
Total Cost for 5 boxes of Afrezza on initial prescription was $1229.82 with member paying $44.81, Plan paid $1135.22, Manufacturer paid $49.79.
Total Cost for 5 boxes of Afrezza on 1st refill order was $1229.82 with member paying $61.49, Plan paid $1168.33, Manufacturer paid $0.
The patient is using on average 8 units of Afrezza with each meal, and occasionally a correction dose of 4 units. Patient is type 2 and also taking a basil insulin. Patient is keeping BG well controlled without a CGM. Thanks you Al Mann for Afrezza.
I will also add that my Insurance is showing the boxes of 60-8unit and 30-4 unit cartridges and the boxes with 12unit cartridges as NC for not covered.

I think this is one of the most important posts I had read.

Total Cost for 5 boxes of Afrezza on initial prescription was $1229.82 with member paying $44.81, Plan paid $1135.22, Manufacturer paid $49.79. /90 days
Total Cost for 5 boxes of Afrezza on 1st refill order was $1229.82 with member paying $61.49, Plan paid $1168.33, Manufacturer paid $0. /90 days

----------------------------------------------------------------------------------------------------------------------------------------------------------------------

$1168 x 4 =  $4672    61.49 x 4 = $245.

[edvarney]

I would have to say that this post is one that should be put out there for all to see.. It gives everyone who is wondering about insurers and costs a more clear up to date idea on this very issue..  please repost this on social media for all to see... GLTU.

[me]

Nov 6, 2015 18:47:56 GMT -5 dreamboatcruise said:

me... If doctors are being given discount cards to give to patients (or patients otherwise learn of it) that would make tier 3 just as good as tier 2... for them, with a slight hit to profitability. I don't think this is quite like the difference between flonase and Nasacort where a doc is just going to say whatever name he thinks is likely to be preferred for most plans because there really isn't a difference. I'd be thrilled with widespread tier 3. If we can get covered with no pre-auth up over 50%, I think it would dramatically effect prescription rates. Maybe someone with real prescribing experience could correct me, but it seems that if over half of patients are likely to be turned down at the pharmacy then the overworked doctors (except for true believers in Afrezza) are unlikely to start prescribing.

dreamboatcruise, I'll try to find some time later this week to respond to your and sluggobear's questions regarding PAs and insurance coverage.  I think these are important issues to understand.  I hope to also provide a broad-based view of the Rx distribution and financing model in the pharmacy, insurance and employee benefit industries, and how all these moving parts fit together to either ensure or block the success of a particular drug.  Bear with me until I can find some time to do this.  Thanks!