PBMs to limit availability of branded drugs on formularies

Express Scripts and CVS Caremark are expected to expand their list of non-covered drugs for the 2015 plan year, leading to challenging pricing negotiations between branded pharmaceutical companies and PBMs.

Given the Affordable Care Act (ACA) compliant pharmacy benefit offerings, industry watchers are not surprised.

“Narrowing pharmacy networks and limiting pharmacy risk exposure has become more important under ACA compliant benefit offerings,” according to F. Randy Vogenberg, PhD, RPh, principal, Institute for Integrated Healthcare, Greenville, S.C. “That creates obvious conflicts with select branded firms particularly in the traditional pharmaceuticals arena making contract negotiations high-pressured.”

For managed care and health-system decision-makers this could mean more pressure on balancing network issues between clinical performance and economic impact, according to Vogenberg.

“For example, limited drug choice for patient use or increased risk sharing from a PBM shifts cost exposure to the provider versus the payer,” he explained. “We had seen this before in the late 1990s with the HMO movement that ultimately led to the consumer backlash that insurers want to avoid.”

Vogenberg also expects more independence and autonomy being sought by health systems to better control their risk by establishing their own insurance program and/or alternative contracting methodologies with a health plan.

48 products no longer covered in 2014

Express Scripts moved 48 products to “not covered” status for its 2014 National Preferred Formulary, which is the selected formulary for approximately 30% of its members, according to David Whitrap, Express Scripts spokesman. In doing so, the company is able to save its clients more than $700 million this year.

“Patients still will be able to receive the medications they need,” Whitrap said. “In lieu of the excluded medications, our National Preferred Formulary [NPF] covers other options that have been deemed clinically equivalent by an external panel of physicians and pharmacists. We also understand that there may be rare instances when one of these alternatives may not be an option for a particular patient; for these situations, we have a standard exception process that physicians may pursue to have an off-formulary, ‘medically necessary’ drug covered for their patient.”

“The excluded medications represent about 1% of all of the products currently on our formulary,” Whitrap continued, “and nearly all of them have copay cards that drive up the overall cost of care.”

Today, drug choices in many therapy classes are larger than ever, with many products costing more with no additional health benefit, according to Whitrap. “In addition to the recent wave of generics, the drug market has seen an expansion of ‘me-too’ branded products that, for the vast majority of patients, deliver similar outcomes as do medications already on the market," he said.

“Our goal is to ensure that the country is getting the most out of its total prescription drug spend,” Whitrap said. “For those drugs that truly provide unique clinical profiles and superior outcomes, our patients to have access to them. But in the many instances when multiple products are clinically equivalent to one another, we . . . are all better off when we choose the more affordable options.”

In the same vein, the CVS Caremark Preferred Drug List (PDL) reflects the PBM’s recommendation for clients to adopt in order to provide comprehensive coverage to their plan members and reduce overall costs, according to CVS Caremark spokeswoman Christine Cramer.

Clinical acceptability of the drugs included in the PDL is among our primary considerations, enabling us to continue to provide plan members with access to high-quality products within all covered classes of drugs,” she said.

“In order to provide our clients with advance notice, we typically share the new formulary sometime in the third quarter for implementation the following January,” she explained. “A number of the drugs removed from the PDL for 2014 are high-cost, non-preferred drugs with very low utilization. For those drugs that are removed, equally effective products with lower overall costs, including many generics, remain available on the formulary.”