Tuesday, August 05, 2014

The 2015 PBM Formulary Exclusion Lists are Here!

CVS Caremark and Express Scripts have just released their 2015 formulary exclusion lists.

As expected, the two PBMs’ lists keep getting longer, although there are relatively few overlaps. The lists offer some surprises, including Express Scripts’ decision to drop Amgen’s anemia products and both companies’ handling of the testosterone category.

Read on for our exclusive Guardians of the Galaxy commentary and links to the complete exclusion lists.


Over the past few years, formulary restrictions emerged to block access to specific products. The restrictions affect a PBM’s national formulary. Here are the 2015 lists:


A few insights, inspired by the Guardians of the Galaxy: Awesome Mix Vol.1:
  • Ain’t No Mountain High Enough. The lists keep growing. Express Scripts has 66 products on its 2015 formulary exclusion list, compared with 48 in 2014. CVS Caremark’s 2015 list has 95 products, including 72 carryovers from the 2014 edition. Nostalgic readers will recall that CVS Caremark removed a mere 34 drugs from its 2012 standard national formulary. I guess there ain't no valley low enough, either.
  • Escape (The Piña Colada Song). Drugs that are targeted for formulary exclusion usually fall into one or more of these categories: (1) Non-preferred, tier 3 drugs with very low utilization, (2) heavily promoted drugs in therapeutic classes with multiple generic alternatives, and/or (3) brand-name products with generic equivalents. Here’s what Express Scripts told me: “We only exclude products from our formulary that represent a significant amount of wasteful drug spend, and only when clinically appropriate alternatives exist.” So if you like getting caught in the rain...
  • Ch-Ch-Ch-Cherry Bomb. This year, CVS Caremark increased its focus on “new to market” products, which it defines as “line extensions, new strengths, or new molecular entities.” New products that are “clinically significant” (the company’s words) will get an expedited formulary review. Express Scripts puts more emphasis on specialty drugs, such as the exclusion of Amgen’s Aranesp and Epogen.
  • Come and Get Your Love. Plan sponsors that adopt the more restricted formulary will gain higher rebates and/or lower plan costs. For example, Express Scripts estimates that its 2015 exclusions affect less than than 0.2% of its members, but will come and get more than $1 billion for its clients and patients in 2015.
  • Hooked on a Feeling. While nearly all exclusions are brand-name drugs, both PBMs have targeted brand and generic products in the newly complicated testosterone category. You know, it's the authorized generics and ooga-chaka, ooga ooga ooga chaka stuff.
As I noted last year, manufacturers shouldn't be surprised by this inevitable consequence of the generic wave. Brand-name drugs in highly generic therapeutic classes will continue to face enormous pressure for price and rebate concessions. A tier 3 formulary position no longer guarantees cost-effective patient access.

We are groot. ‘Nuff said.

P.S. Yes, go see GotG. Right away.

P.S.2 In anticipation of the 2014-15 edition (due in late September), our 2013-14 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors is on sale until the end of August.


  1. It is amazing what Adam can dig up while being sequestered in a multiplex theater for the summer.
    Two interesting observations:
    1. There are some non-preferred, non-blocked products such as Advair on the ESI formulary. A reversal of last year.
    2. CVS Caremark has made the call on Invokana over Farxiga early. One of one? Even before the BI/Lilly drug has been approved. ESI didn't make that call yet.

  2. i haven't seen anyone address the rebates involved. Specifically did Symbicort offer a higher rebate to get Advair excluded, or Fortesta vs. Angrogel. Are the plan sponsors aware of the payola going on here? Are they getting their share of the payoff? If the plan sposnor's rebate contract language is "per claim" or "per rebateable claim" my guess is they are not (similar to what happened with the Lipitor rebate fiasco). With that language, those deals are designed to benfeit the PBM only and not the plan sponsor

  3. Don't mix fair contract language and rebates. Rebates make formularies work and lower costs. Contract language makes sure appropriate savings are passed through. No business negotiates with their net cost on the table.

  4. Who decides what is "fair" and "appropriate"? Since the contract is drafted by the PBM attorneys (AFTER winning the RFP), the contract is tilted to the benefit of the plan sponsor. "Pass Through" is the ubiquitous term used to mislead plan sponsors into thinking they are getting true transparent pricing and rebates (when they are not). All of this is at the hand of the "consultant" who is often either blissfully ignorant of contract vagaries...or even worse is a known participant in it.

  5. The key element, which is rarely, of ever addressed, is that formulary rebates primarily benefit the net income of the PBM. If a client has a fixed ($/brand or other metric) rebate yield, improving overall rebate yield (often limiting choice of lower cost drugs) solely benefits the PBM. If a client has a “transparent” or “pass-through” rebate contract, besides needing a new consultant, they have no gauge or control over rebate yield.

    Regardless of the above, increasing rebate yield by limiting other drugs does not benefit the client. In addition, having this area be the focus of discussion of PBM value avoids the primary area where a plan sponsor (and member) can save money through reducing or eliminating spread pricing on generic drugs.

    Plan sponsors should focus on high yield (high reduction) areas such as generic and specialty drug pricing and not allow rebate yield to be a focus. $10/Rx reduction in spread is much better than a $1/Rx increase in rebate yield, if my math is correct.