Will Specialty Drug Exclusions by PBM Giants Bring Down Drug Spending for 2019?

Formulary drug exclusion is a well-known utilization tool used by the largest pharmacy benefit managers to control rising drug costs. Besides providing payers and PBMs greater negotiating power with drug manufacturers, formulary exclusion can impact sales revenue of key brands and could force patients to switch their prescription drugs. PBMs Express Scripts and CVS Caremark are excluding 50 and 23 drugs, respectively, from their largest formularies for 2019. Express Scripts and CVS Caremark annually release the list of excluded drugs from their largest national formularies. Some of key things to note from the PBM formulary exclusion for 2019 are discussed below.

Express Scripts excludes 50 drugs from its national preferred formulary beginning January 2019

Express Scripts continues to take an aggressive approach in formulary exclusion and has excluded some drugs in the specialty categories. The PBM is focusing on lowering drug costs by using generics, biosimilars, or low-cost branded drugs. As a result, 10 multisourced branded drugs having direct generic equivalents, 11 specialty drugs, 24 single-source branded drugs with generic alternatives, and 12 branded drugs with a high net cost have been excluded from the PBM’s formulary.

For drugs used to treat hepatitis C, the PBM is excluding AbbVie’s Mavyret and adding back Merck’s Zepatier as a preferred alternative in its 2019 formulary. Mavyret’s exclusion could really impact patient access and could lead to switching to a higher cost therapy, as the drug was a pan-genomic treatment option compared with Zepatier (genotype 1 and 4). The reason for Zepatier’s preferred status could be its recent 60 percent price cut by Merck.

In the HIV category, Express Scripts is replacing Gilead’s Atripla with Triumeq, Symfi, and Symfi Lo due to the lower price of the new combination pills. In addition, Novartis’ multiple sclerosis drug Extavia, similar to Bayer’s Betaseron, is excluded from the PBM’s 2019 formulary.

ESI became the first PBM to exclude Berinert, one of the four drugs available to treat hereditary angioedema. The PBM is also excluding recombinant factor VIII products Eloctate, Recombinate, Xyntha, and Solofuse from its 2019 formulary.

Additionally, ESI is including the two new calcitonin gene-related peptide migraine drugs—Amgen’s Aimovig and Eli Lilly’s Emgality—on its preferred formulary as a part of its SafeGuardRx Migraine Care Value program and has chosen not to cover Teva’s Ajovy.

CVS excludes 23 drugs from its standard formulary for 2019 and introduces cost-effective benchmarking

CVS has been selective with its exclusions by excluding 23 drugs from its formulary and adding back four drugs for 2019 compared with 17 drug exclusions from 10 classes in 2018. CVS has not taken into consideration the presence or absence of generic equivalents in excluding branded drugs for 2019.

The PBM has been willing to change its mind for its 2019 formulary by adding back three type 2 diabetes drugs in the class SGLT2 inhibitors and SGLT2 inhibitors/biguanide combinations—Jardiance, Synjardy, and Synjardy XR—and excluding Invokana, Invokamet, and Invokamet XR, which were preferred in 2018. CVS has also switched Novo Nordisk’s Norditropin, which was preferred in 2018, for Pfizer’s growth hormone drug Genotropin.

In the diabetes test strip category, CVS has replaced the brand One-Touch in its preferred list with Accu-Check for 2019.

In the autoimmune category, CVS has added back Pfizer’s Xeljanz and Xeljanz XR, which could be an advantage as these drugs are non-injectable therapeutic options for treating autoimmune conditions. For hemophilia, the PBM has chosen to exclude two drugs—Eloctate and Alprolix—and add two drugs, Adynovate and Jivi, in their place. CVS has also excluded two drugs, Prolastin-C and Zemaira, from its pulmonary enzyme deficiency class.

CVS launched a new program that provides clients an opportunity to exclude any drug launched at a price greater than $100,000 per quality-adjusted life year (QALY). This can be done using the QALY ratio determined by comparative analyses produced by the Institute for Clinical and Economic Review.

Authorized alternatives and cost-effectiveness benchmarking poised to change PBMs’ exclusion strategy in 2020.

In their formulary exclusions, ESI and CVS both have done some exclusions in their specialty categories. This marks the first time ESI has excluded drugs in the HIV and recombinant factor VIII categories. Within the traditional products, CVS has made many changes in its diabetes category. Although ESI has excluded the low-cost HIV option from its formulary, the PBM’s introduction of authorized low-cost alternatives though its newly launched National Preferred Flex formulary could be an advantage for its clients. Express Scripts estimates that its NPF, which covers 3,886 drugs, will save approximately $3.2 billion in 2019, or $10.6 billion cumulatively from 2014, on prescription drugs for payers.

These new tools and techniques introduced by PBMs could change the exclusion strategy going forward. We may see an increase in the number of exclusions if more payers or plan sponsors adopt these techniques.

Alekhya Manne is a research associate for Market Access.