A 51-year-old female patient has been taking Forteo (teriparatide) for osteoporosis for the past year. Her insurance company notifies her that the drug is no longer on its formulary. Her health plan, following the national preferred formulary (NPF) developed by Express Scripts, switches her to Tymlos (abaloparatide), a new drug for osteoporosis and new to the NPF for 2018. The reason is that Tymlos has a lower overall wholesale acquisition cost (WAC) than Forteo with clinical equivalency and similar outcomes.
This scenario has played out across the country as health insurers and PBMs exclude certain drugs on their formularies to decrease drug costs.
Express Scripts excluded 64 drugs in 2018, bringing its total since 2014 to 159 out of more than 3,791 available drugs. According to the St. Louis-based PBM, as many as 99.22% of patients will not receive any changes to their drug coverage. If a patient needs a drug not on formulary, the PBM says it will provide exceptions to cover the medication.
From 2014 to 2018, Express Scripts’ exclusions are expected to save participating NPF clients and patients $7.4 billion, with $2.5 billion this year.
CVS Caremark anticipates savings of $13.4 billion from 2012 to 2018 for its PBM clients due to lower cost brands and increased use of generics, according to the PBM’s August 1, 2017, issue of Insightscommentary. The publication also reports that during 2018, the PBM removed 17 products in 10 drug classes from its standard control formulary while adding back others. CVS estimates that 99.76% of its members will stay on their current therapy.
Ken Majkowski, PharmD, chief pharmacy officer at Bethlehem, Pennsylvania-based FamilyWize, a community-based organization that offers a free prescriptions savings program, says PBMs seem to be excluding more drugs than in the past. He says that’s because most drugs being approved are expensive, specialty drugs, and that there might be viable, less-expensive therapeutic alternatives available.
The exclusion process
Adam Kautzner, PharmD, vice president of supply chain strategy for Express Scripts, says medication decisions are based primarily on clinical appropriateness and effectiveness, followed by comparing WAC to net cost. “If net cost is not where it should be, we will exclude a drug and try to negotiate on behalf of employers,” he says.
Express Scripts’ Pharmacy and Therapeutics (P&T) Committee analyzes new drugs, FDA-approved indications for existing drugs, clinical line extensions, and published trends that might affect previous formulary placement decisions.
“Because of our clinical-first approach, we need to ensure there are clinically appropriate options for patients in each therapy class,” Kautzner says. “Simply put, if there isn’t competition within a specific class, we cannot exclude a drug—except if our P&T committee determines it’s unsafe and clinical benefits don’t outweigh the risks. Alternatively, the more options within a therapy class, the more opportunities we have to drive down the cost of the medications while still preserving choice for members.”
David Lassen, PharmD, chief clinical officer of Prime Therapeutics, explains that in making formulary recommendations to its clients—including which drugs to exclude—the PBM helps ensure members will have access to the right mix of drugs needed for the best health outcomes, while driving toward generic and preferred brands that are equally as effective and safe for members.
“The formulary development process is always changing based on both new-to-market brands and generics. We look at safety, efficacy, and availability of other treatments for a given condition,” Lassen says. “As more high-cost drugs come to market, the number of exclusions may go up if other equivalent therapies are available.”
Each quarter, Prime reviews NetResults, one of its standard formularies first introduced in early 2017, so that it reflects current market offerings.
Like Kautzner, Lassen says Prime believes that the clinical merits of a drug should be at the forefront of formulary decision making and that once clinically supported products are determined, cost can be a final deciding factor.
In its first year, NetResults delivered a decrease in net drug trend of 11% compared to its non-NetResults population. To date, Prime has seen an $8 to $14 per member per month average savings range through the first year post implementation of the formulary. In a cohort analysis of continuously enrolled members in NetResults and non-members, there was an 8% point decrease for members.