The Biden administration is looking to avoid hiccups in the rollout of new COVID-19 vaccines as it begins shifting coverage of coronavirus treatments to the private market.
Private insurance companies will need to start covering treatments beginning Wednesday, but the federal government’s supply will remain available for providers to order and distribute from until it runs out or expires.
Distributors and health care providers may continue to order Pfizer’s Paxlovid from the U.S. government until Dec. 15, along with Merck’s Lagevrio through Nov. 10.
Medicare and Medicaid will cover the drugs for free through the end of 2024, and the uninsured will also have access to free treatment through 2028 as part of an agreement with the manufacturers.
Administration officials have acknowledged the problems when the vaccines moved to commercial payers but said ample supply plus a relatively long transition period for antivirals should make it so those same issues — delayed insurance coverage and lack of supply — don’t happen again.
“The federal product will continue to be available for days to weeks. And that gives a chance for the insurers, the [pharmacy benefit managers], the pharmacies, providers, all to work through the system changes needed to distribute the product commercially and effectively,” a senior Health and Human Services (HHS) official told reporters during a recent briefing.
When the new COVID-19 vaccines began rolling out last month, there were widespread reports that insurers weren’t covering the shots because they hadn’t updated their codes in time.
There were limited appointments and even more limited supply at pharmacies, making it difficult for people who wanted to be vaccinated.
For children, those issues were magnified. Availability of pediatric doses remains inconsistent, frustrating and worrying parents.
One problem with the vaccine rollout was that the updated shots were a completely new product.
“So with the vaccine transition, it was literally like one day the prior product that the government had purchased was the product you had access to. As soon as the recommendations were made, those products were no longer authorized or approved for use. There was a whole new product that had to be provided to the market,” said Jennifer Kates, senior vice president at KFF.
That won’t be the case with antivirals, officials said.
“All these coding issues, all these denials at the point of care that people read about … if they happen, are not going to decrease the access because there’s still going to be plenty of [U.S. government] product for free out in the world and out in various locations,” a senior HHS official said.
“There’s probably a lesson from the vaccines. It’s also an option we didn’t have for vaccines because that was a product switchover. There was no ability to have any overlap because it was simply two different products,” the official said.
Kates said the long transition period should help, but it’s still possible that there will be challenges. People may still run into issues where the treatment isn’t covered or there’s a limited supply.
“It is a transition; they’re basically saying the system that we’ve had is going to change,” she said.
Officials don’t anticipate supply issues; they estimate there are about 2.5 million Paxlovid doses in the field and at least 1 million Lagevrio doses.
HHS doesn’t know how long the available supply will last, especially since providers will be able to return unused doses of Paxlovid to Pfizer until the end of the year under a novel program that will convert the doses into government credits that will go towards federal coverage of the treatment.
Pfizer in a statement said it estimates about 7.9 million doses will be returned by the end of the year, meaning the government will have a credit worth approximately $4.2 billion. Pfizer’s initial contract in 2021 was for 10 million doses worth $5.3 billion; that was doubled in early 2022, and HHS requested another 3 million at the end of 2022 for nearly $2 billion.
Since Paxlovid was made available at the end of 2021, the federal government has subsidized the cost. Pfizer sold the treatment to the government at a discounted rate of $530, and, when a move to commercialization was announced, a price increase was expected.
The company said the list price for a five-day course of Paxlovid will be $1,390. It’s not clear how much patients will pay out of pocket as insurance contracts haven’t been finalized. The price also doesn’t reflect any rebates or negotiated discounts.
Officials said they expect insurance coverage for Paxlovid and have been in conversation with insurers, pharmacies, pharmacy benefit managers and the manufacturers — though they stressed the coverage details are between private companies, not the government.
“As the federal government transitions away from distributing these products, access will primarily depend on the arrangements in the private commercial market among each of the particular drug manufacturers and private insurers,” HHS Secretary Xavier Becerra said in a letter to manufacturers and distributors.
“It is of paramount importance that these medications remain widely accessible to high-risk patients after commercial distribution begins in order to minimize hospitalizations and deaths from COVID-19.”
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