Out in the cold

How PBMs are adding excluded drugs lists as cost control tools

New excluded drugs lists devised by pharmacy benefits managers are raising the hurdle for reimbursement of drugs the PBMs' pharmacy and therapeutics committees consider to be clinically equivalent to cheaper drugs. Drugs that are not sufficiently differentiated will not receive low reimbursement - they will receive none at all.

PBMs have always made decisions about what drugs will be included in formularies with higher cost-sharing and which will be available with lower cost-sharing. But excluded drugs lists take this one step further by not providing any cost-sharing for some drugs.

Excluded drugs lists are a response to the growth in the number of approved specialty drugs, co-pay coupons used by drug companies to lower costs for patients, and requirements for drug coverage under the Affordable Care Act that are increasing pressure on PBMs to contain drug outlays for their clients.

PBMs control the drug spend for large private payers as well as large and small self-funded employer plans. Between them, Express Scripts Holding Co., CVS Caremark LLC, UnitedHealth Group's OptumRx Inc., Catamaran Corp. and Prime Therapeutics LLC manage more than 95% of pharmacy benefits for employers in the U.S.

CVS Caremark was the first to institute an excluded drugs list in plan year 2012. This October, Express Scripts announced its first excluded drugs list, which will take effect in January (see "Missing the Cut," A6).

The two lists had 11 of the same drug classes, but each PBM also targeted a handful of drug classes that the other did not.

Within the 11 classes both PBMs targeted, they excluded 19 of the same drugs, but each PBM also excluded about a dozen drugs that the other did not.

CVS would not provide details on how its list was devised, but the drugs on the excluded list "are high-cost, non-preferred drugs with very low utilization," said Troyen Brennan, EVP and CMO.

Express Scripts told BioCentury it used a two-step process based first on clinical equivalency as determined by the P&T committee, and then on cost.

More specifically, drugs the P&T committee concluded did not offer a meaningful benefit over other treatments - in some cases regardless of MOA - were determined to be "clinically optional" and put out to bid. The lowest one or two bidders were placed on formulary, and all others were excluded.

There is an appeals process for cases when a patient is not adequately served by covered drugs, which Express Scripts expects to happen rarely, and the PBM said it would re-evaluate excluded drugs if manufacturers can provide additional data

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