Medicaid Coverage of Pharmaceuticals Life Science Tennessee Trends in Access and Reimbursement Life Science Tennessee November 3, 2016 DRAFT

Access and Financing Trends in the States Restrictive prior authorization criteria: States are drafting more selective prior authorization criteria Step therapy requirements Demonstration of clinical success in order to remain on the drug Has led to concerns from CMS (in the case of HCV drugs) and litigation Drug carve ins: Many states are carving pharmacy into the managed care benefit Drug effectiveness studies: States share resources of analysis of drug effectiveness or turn to outside bodies Coverage delays: States/MCOs are taking more time in determining the coverage criteria for new drugs Medicaid Coverage of Pharmaceuticals: Trends in Access and Reimbursement

Potential Solutions to the Access/Financing Client Supplemental rebates/Unified formulary: Manufacturers offer higher rebates for preferred formulary placement, more favorable prior authorization criteria, and/or unified formulary across MCO/FFS Expert consultation: Pharmacy and Therapeutic Committees confer with subject matter experts when examining drugs that treat rare diseases Ombudsmen/commissions: Health care advocate or established commission focuses on issues related to specific population (e.g., rare disease population) Prescriber prevails: Prescriber may override state’s non-coverage determination if drug is certified for a medically necessary purpose New drug timeframes: Establish specific timeframes for review of newly approved drugs Value based purchasing: Drug pricing takes into account effectiveness Medicaid Coverage of Pharmaceuticals: Trends in Access and Reimbursement

Presentation developed by: Thank You! Anthony Fiori | Managing Director afiori@manatt.com Danyel re: how do you know how much $ to put in the rate -- Medicaid Coverage of Pharmaceuticals: Trends in Access and Reimbursement 4