Belviq Still Lacking Coverage At The Top, But Could Recover In The Exchanges

| About: Arena Pharmaceuticals, (ARNA)
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Summary

Only 3 of the 25 largest U.S. health insurance companies cover Belviq under Obamacare, and just 9 allow access to Belviq, with most requiring prior authorization requests and high copays.

This frustrating situation is also an opportunity to substantially increase script counts. An influential government agency is making more plans that cover Belviq available in the marketplace.

Based on this agency's goals, coverage of Belviq would be available in 40 or more states' marketplaces next year. If so, patients will take advantage.

As Arena (ARNA) approaches the 18th month of launching Belviq, patients have filled around half a million total prescriptions from 60,000 prescribers, a slower uptake than investors have wanted. Week to week sales the past quarter have more or less plateaued during months weight loss products have historically stagnated, and also coinciding with the launch of rival drug Contrave from Orexigen (OREX) and Takeda (OTCPK:TKPHF). Eisai (OTCPK:ESALY), Arena's marketing and supply partner, is continuing to build up awareness for Belviq by increasing its sales force from 200 to 600 and direct-to-consumer advertising to 10,000-25,000 ads per month, including on television. Eisai also has 50 people working at expanding insurance reimbursement, which has grown to 70% of covered lives. This report looks at coverage from the top 25 U.S. health insurers as ranked by market share.

Table 1. Status of Belviq at the Largest U.S. Insurers

MEDICARE

Excluded

Health Insurance Marketplace

8

Highmark Healthcare Reform

Tier 3 PA

10

Independence Blue Cross

Tier 3 PA

19

Health Net Private Exchange

Tier 3 PA

Private Commercial Insurance

1

UnitedHealthcare

2

Kaiser Permanente

3

Wellpoint

4

Aetna Value, Value Plus, Commercial #2 plans only

Limited Access

5

Humana, Rx3 EHB Plan only

Tier 3

6

Health Care Service Corporation

7

Cigna HealthCare

8

Highmark

Tier 3 PA

9

Blue Shield of California, Plus plan only

PA

10

Independence Blue Cross

Tier 3 PA

11

Centene

12

Health Insurance Plan of New York

13

Horizon Blue Cross Blue Shield (BCBS) New Jersey

Tier 3

14

BCBS Michigan

15

Florida Blue

17

WellCare

18

CareFirst BCBS

19

Health Net, 3-Tier plan only

Specialty PA

20

Molina Healthcare

22

Excellus BCBS

Tier 3 PA

23

BCBS Massachusetts 4-tier

Tier 4 PA

25

Cambia Health Solutions

Blank = Not listed/not covered/non-formulary

PA = Requires prior authorization

By law, Medicare excludes weight loss drugs. The Treat and Reduce Obesity Act of 2013 (TROA), which seeks to amend title XVIII (Medicare) of the Social Security Act to include medication for treatment coverage under Medicare part D, has been mired since June 2013 at the congressional committee level, from which only 11% of referred bills advance to voting by Congress. The outlook for Belviq in the health insurance marketplace (HIM) is much brighter. Only a few top companies offer exchange plans that cover Belviq under the Affordable Care Act (ACA). However, the ACA created a Multi-State Plan (MSP) Program to bring competition to the HIM, with a goal of at least two MSP options in the HIM available in every State and the District of Columbia (D.C.). For 2014, the U.S. Office of Personnel Management (OPM) certified more than 150 MSP options in 30 States and D.C. In recruiting for applications and recertification submissions for the 2015 term, the OPM directed prospective and current MSP issuers that specifically exclude coverage for weight management interventions to review the clinical rationale for those exclusions. The OPM, which also oversees the Federal Employees Health Benefits (FEHB) Program, subsequently banned FEHB carriers from excluding weight loss drugs on the basis that obesity is a "lifestyle" condition or that obesity treatment is "cosmetic". A letter from 49 members of congress cited the OPM's actions and urged the Department of Health and Human Services (DHHS) to provide similar federal guidance to health plans participating in the marketplaces to have obesity treatment coverage in time for 2016. The good news is that even with inaction from the DHHS, the OPM is staying busy, and there may be at least 10 additional MSP options in the HIM that cover Belviq next year.

In the private sector, non-ACA plans are also still limited, and the ones available list Belviq as a non-preferred brand or even at a specialty drug status (highest tier), which translates to higher copays for members. There is much room to grow, but initial coverage by any one of these companies will lead to a large influx of new patients on Belviq. Formulary changes could happen at any time, but usually quarterly, although events that significantly impact healthcare practice (such as new drug approvals or expansions to labelled indications, updates to clinical practice guidelines, remarkable clinical trial results, or even large enough shifts in public demand) have led to quicker revisions. The bears of the weight loss sector have reason to think they have time on their side. TROA is moving too slowly through the legislative process. Insurers appear to be in no hurry to act either, not because they don't recognize the long-term costs of obesity, but they may be thinking of passing those burdens on to Medicare once their members get old enough. To summarize, increasing prescription growth may come down to the people most affected taking action. No, not the longs lobbying the government, though that can't hurt. It's up the patients! If high quality, affordable insurance becomes available in the exchanges, there's nothing to stop smart employees from leaving their commercial plan for one that actually covers their meds.

Disclosure: The author is long ARNA, OREX.

The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.