The Impact of Express Scripts’ 2019 Formulary Exclusion List

Earlier this month, Express Scripts announced its 2019 National Preferred Formulary (NPF), which added an additional 48 brands to its exclusion list. Among those now excluded from their NPF are: Gilead Sciences’ HIV treatment Atripla (efavirenz/emtricitabine/tenofovir disoproxil fumarate) and AbbVie’s Hep C treatment Mavyret (glecaprevir/pibrentasvir).

In all, Express Scripts says that it is excluding 22 drugs that have low-cost generic alternatives; 12 instances of brand-to-brand competition where the drugs have the same active ingredient, but the excluded drug has a higher net cost; 11 specialty drugs that have a lower-cost brand or biosimilar alternative with a lower list price; 10 drugs that are multisource brands with direct generic equivalent; and nine short-term therapies, such a topical creams and ophthalmic treatments.

PM360 spoke with Jeremy Schafer, SVP at Precision for Value, to learn about what trends he sees in Express Scripts’ latest exclusions, what this means for the brands left off of the NPF, and how brands may need to address how they deal with payers.

Jeremy Schafer, SVP at Precision for Value

PM360: What brands or therapeutic areas in general do you think will be impacted the most from Express Scripts’ recently announced formulary exclusions?

Jeremy Schafer: Categories where there is no grandfathering and where generic options are available will probably be under the most risk as patients will be required to change and patients will also see value in the lower cost share. The rare disease and specialty categories that are grandfathered will likely see the least change since only new members will be impacted and the rarity of the conditions means fewer new patients present each year.

Why do you think the list contains more therapies for rare and/or highly sensitive disease categories including hemophilia, hereditary angioedema, and HIV?

Competition in these classes has increased with more drugs available that have similar mechanisms of action and safety/efficacy. Despite the diseases being more sensitive or less common, the cost to payers can be significant. Finally, payers may feel that management in more common and less sensitive categories has been maximized and that it is time to generate savings in categories that previously were untouched. It may also signal a shift in the opinion of payers and employers that no category can be off limits in managing.

Express Scripts typically excludes drugs if they believe they are including a cheaper alternative on their formulary list. Is that the case for all of the rare and/or highly sensitive disease therapeutics excluded from this year’s list?

That is difficult to tell. All the drugs on the Express Scripts list, both preferred and excluded, for HIV, hereditary angioedema, and hemophilia are brand products. Since brand products within a class tend to have WAC prices somewhat similar to each other, the exclusions versus preferred decisions may have been based on a mix of rebates, clinical value, and real-world cost based on Express Scripts claims data. Since rebate contracts are confidential, it is difficult to know if every excluded drug was truly more expensive than the preferred product for the PBM, the payer, and the patient. In addition, for conditions such as hereditary angioedema and hemophilia, in which products are dosed variably on condition severity and/or weight, it may be hard to determine definitively which products were more expensive than others.

How can companies with drugs excluded from this year’s list still make sure patients are able to get access to the medications?

A multipronged approach is best. The manufacturer should message providers on whether Express Scripts will grandfather existing users and how to pursue an appeal for coverage if not. In addition, the manufacturer should ensure that information regarding the patient assistance program is available to providers, specialty pharmacies, and patients so that those on excluded drugs may continue to stay on treatment. Finally, the manufacturer should re-engage the PBM and explore ways to restore a drug’s covered status, including detailing on the product’s value proposition as well as potential contracting.

What impact will this year’s list have on companies with rare disease treatments moving forward?

Rare disease companies will watch this development closely. If Express Scripts is successful in shifting market share toward preferred therapies, rare disease companies impacted by the exclusion list may be compelled to provide more financial value to the PBM to maintain a covered status. For those rare disease categories not yet impacted by an exclusion list, these companies will need to consider doing a risk assessment on whether their category(ies) could be next and how to respond if that occurs. It is also important to note that payers and PBMs tend to watch what their competitors do and then pursue similar strategies if the first movers are successful. What is happening in Express Scripts now could be the future for more payers and PBMs.

Do companies with treatments for rare diseases now need to change how they communicate with payers to better demonstrate their value?

The payer and PBM marketplace is increasingly integrated and reimbursement is shifting to a focus on overall value to patient health and cost. Rare disease companies need to tell payers compelling value stories on how a drug impacts the patient’s overall health, what costs or health resource use is avoided, and the long-term benefits. A rare disease manufacturer can no longer assume that because the disease is rare that payers will ignore it.


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