Evofem (EVFM) Stock: ACA Coverage Of Phexxi Is A Game Changer

Let’s start with the big news. On January 12th, 2022, the Health Resources and Services Administration and the US Department of Labor mutually updated their websites and policies in ways that are extremely beneficial to Evofem Biosciences (NASDAQ:EVFM).

Consider first the new guidelines from the HRSA (with my emphasis):

The Affordable Care Act (ACA) – the health insurance reform legislation passed by Congress and signed into law by President Obama on March 23, 2010 – helps make prevention services affordable and accessible for all Americans by requiring most health insurance plans to provide coverage without cost sharing for certain recommended preventive services. Preventive services that have strong scientific evidence of their health benefits must be covered and plans can no longer charge a patient a copayment, coinsurance or deductible for these services when they are delivered by a network provider.

The new 2023 Guidelines make the recommendations for contraception much clearer:

WPSI recommends that the full range of U.S. Food and Drug Administration (FDA)- approved, -granted, or -cleared contraceptives, effective family planning practices, and sterilization procedures be available as part of contraceptive care.

(Note: WPSI stands for Women’s Preventive Services Initiative.)

Second and perhaps much more importantly, the Department of Labor has issued a FAQ in which it explains how it will enforce the HRSA guidelines, see in particular question 9. The language is quite strong and the content very important, so I’m reproducing a substantial portion of it here (with my emphasis):

The Departments have received a number of complaints and reports that participants, beneficiaries, and enrollees are being denied contraceptive coverage in violation of the requirements under PHS Act section 2713. Examples include plans and issuers, as well as their pharmacy benefits managers:[…]• Requiring individuals to fail first using other services or FDA-approved, cleared, or granted contraceptive products in other contraceptive methods before the plan or issuer will approve coverage for a service or FDA-approved, cleared, or granted contraceptive product in the contraceptive method that is medically appropriate for the individual, as determined by the individual’s attending health care provider;[…]

The Departments have also received stakeholder feedback that while the current 2019 version of the HRSA Guidelines recommends coverage of the full range of female-controlled FDA approved contraceptive methods, the current FDA Birth Control Guide referenced in the Departments’ prior guidance may not identify all and/or newer contraceptive products approved, cleared, or granted by FDA, such as mobile apps for contraception based on fertility awareness.40 As a result, plans and issuers may not be providing coverage for the full range of FDA-approved, cleared, or granted contraceptive products in accordance with the current 2019 HRSA Guidelines.

Plans and issuers subject to these requirements are reminded of their responsibility to fully comply with the requirements under PHS Act section 2713 and the HRSA…