PDT Coverage: Pharmacy or Medical Benefit?


Three doctors discuss whether PDTs should be covered as a pharmacy benefit or medical benefit.

John Fox, MD: There’s a lot of concern among the developers of these tools and among payers about where this gets paid out of and how it’s distributed. Is it a pharmacy benefit or a medical benefit? Medicare is thinking about developing a new benefit, a digital therapeutic [DTx] benefit. What’s the leading thinking on this? Scott, do you want to take that?

Scott Whittle, MD: From a payer perspective, either is fine. In fact, when we’ve written contracts in this space for prescription digital therapeutics [PDTs], what we use to make the decision is what’s deployable in a strategy that’s relatively easy to lift on the payer side, and then what feels most natural on the provider side for utilization. In terms of our internal decision-making, that’s the calculus we’re going through. How do we lift it up? How do the providers perceive the strategy? In that calculus, we lean largely toward prescription because prescription has a strategy that’s already deployed, so putting it in the prescription benefit works very well. It also fits the model that people have in their brains, so we face less resistance and there’s a great deal of convenience to it.

The primary concern behind all that is distinguishing between a therapeutic and software, because software typically lives within the administrative spending of a payer organization. The administrative spending doesn’t get reimbursed by other stakeholders. It comes directly out of a payer’s bottom line and is going to be entirely unattractive to a payer. The first discussion that somebody would have with a payer in a discussion like this would be how we ensure deployability. Then we make sure this comes out of either the medical benefit or the behavioral health benefit, tucked into a prescription benefit. But it can come out of administration dollars because then it doesn’t fit into the world in which it belongs.

John Fox, MD: Fair enough. Tim, any reactions to that?

Timothy Aungst, PharmD: The Academy of Managed Care Pharmacy has hosted several focus groups on this, and I’ve been participating with other DTx companies and across other payers. Scott, to your point, prescription is a natural fit because it follows a traditional mindset. It’s already established. Even saying PDT resounds with some people. If it resounds with patients, it’s going to resound with prescribers and such. It’s easy to segue into that.

But we’re still early in the game. We acknowledge that this is the Wild West. We don’t know what CMS [Centers for Medicare & Medicaid Services] and other organizations are going to do. We’re exploring worldwide what’s going to be taken on. It has to evolve at some point. This is a good stopgap [measure]. I don’t think it’s sustainable. If we’re going to talk about whole digitization of health care, if we’re going to talk about further integration across many other therapeutic areas with DTx or PDTs, we’re probably going to have to take a step back and say this works for now, but it isn’t going to work forever.

What do we have to do and evolve? Does that mean some separate? Maybe. But if we think about how health care changes overall, then how we embrace and do these types of things has to be addressed. That comes back to thinking about how we pay for it and why we should pay for it, and that’s going to be a new arm. It’s exciting, though.

Arwen Podesta, MD: As a prescriber, as the person who’s trying to help the patient get better and get it fulfilled, there are many barriers with all these specialty medicines with little specialty pharmacies that I deal with in substance use. If one payer has it as a medical benefit, another as a pharmacy benefit, and another as this new thing that might happen, then I’m not going to be able to manage it. My office isn’t going to be able to manage it. New prescribers aren’t going to do it. It’s a huge barrier when you have 1 product that’s in different MCOs [managed care organizations] under different payer strategies. For those of you who are on the payer committees, I request that we stick with 1 and do what your neighbor is doing. Let’s all go with pharmacy until the next phase happens.

John Fox, MD: This is fascinating. At the end of the day, what matters is that we can put this in patients’ hands. If we make it difficult for providers to execute, then it diminishes the likelihood that patients are going to benefit from this treatment if they can’t get it.

Transcript edited for clarity.

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