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By Alekhya Manne – Associate Analyst, Shania Sarabhai – Research Associate

From potential shortages of generic drugs to a brand new COVID-19 pipeline, this pandemic is undoubtedly impacting pharmacy benefits. Payers are constantly trying to salvage the financial impact of the COVID-19 pandemic on drug access by leveraging formulary exclusion to achieve deep discounts and provide medication access. Express Scripts, CVS Caremark and OptumRx, which dominate the PBM market, have excluded dozens of new drugs from their largest formularies for 2021.

Express Scripts

Express Scripts added 70 new drug exclusions under its National Preferred Formulary bringing their total excluded drugs to 422 out of 3,977. About 14 specialty drugs have been ruled out and 11 drugs are demoted from preferred to non-preferred status.

Diabetes, a major driver for healthcare spending, sees decreased utilization of its type 2 diabetes drugs. Januvia and its combination products will be the only DPP4 inhibitor drugs to be covered resulting in the exclusion of Tradjenta.

The PBM also made notable exclusions in specialty categories such as autoimmune disorders, oncology and lipid-lowering therapies.

Under the oncology category, Express Scripts excluded AstraZeneca’s BTK inhibitor Calquence and replaced it with AbbVie and Johnson & Johnson’s rival drug Imbruvica. The PBM further incorporated lower-cost generics as preferred agents for 53 of the 70 drug exclusions swapping biosimilars for cancer drugs such as Fulphila and Ziextenzo, with Neulasta.

Express Scripts excluded Novartis’ psoriasis drug Cosentyx, which previously enjoyed Tier 2 placement and swapped it with Eli Lilly’s rival Taltz, which was on the PBMs exclusion list in 2020.

Amgen’s Repatha replaced Regeneron and Sanofi’s anti-cholesterol drug Praluent. Notably, CVS prefers Praluent and removed Repatha from its formulary. Express Script’s opposite decision indicates that both players are now going single-source, resulting in a significant drop in price point for PCSK9 inhibitors to $3,000 from $14,000 a year.

CVS Caremark

CVS Caremark excluded 57 drugs from its standard formulary in 2021 compared to 100 drugs in 2020. The PBM states that only 0.4 percent of members will experience any changes in 2021.

CVS also excluded drugs from new categories such as acromegaly, oncology, gastrointestinal, ophthalmic, Parkinson’s disease, cardiovascular and so on.

For oncology, CVS Caremark excluded Bortezomib and Kyprolis instead preferring Ninlaro and Velcade. It also excluded, Neulasta but will provide coverage for its biosimilar, Ziextenzo.

Sandostatin LAR Depot, Signifor LAR, and Somavert are excluded while Somatuline Depot was given the preferred status for acromegaly. Out of the three drugs CVS Caremark excluded for 2021, Somavert enjoyed a favorable Tier 2 status for 2020.

On the other hand, CVS added back six drugs into its formulary in drug classes such as anticonvulsants, diabetes, growth hormones, ophthalmic and osteoarthritis. Anticonvulsant drug, Lamictal and growth hormone drug, Norditropin previously not covered in 2020 are now back on the formulary.

The PBM’s diabetes test strips category changes are expected to save more than 10 percent in 2021. It excluded ACCU-CHEK products which previously enjoyed a favorable Tier 2 placement and newly added Onetouch products with a preferred status.

Implications:

The number of drugs excluded by the top PBMs have increased when compared to previous years. This can raise a concern for medication accessibility and adherence in patients with chronic conditions as such categories are most frequently targeted. For instance, these PBMs have done some notable exclusions in specialty categories, including oncology. With an increase in biosimilars in the market, PBMs substituting brands with biosimilars can drive savings. Express Scripts swapping Cosentyx (psoriasis) marks a first case of annual switching for better pricing in the antibody market. This suggests that the prices in the immunology market, especially on dermatology side, will continue to be under pressure. As COVID-19 has shaken up the healthcare industry, it will be difficult to predict how formulary exclusion will impact drug accessibility as additions and deletions from the formulary may be needed on a more frequent basis in case of drug shortage.

*As per DRG Data