No Clinical Studies for Some PBM Drug Exclusions
An analysis of pharmacy benefit manager (PBM) drug formulary exclusions by the Tufts Center for the Study of Drug Development says that no comparative clinical and cost-effectiveness studies were conducted for 10 of 16 drugs excluded by both CVS Caremark and Express Scripts. “Lack of evidence of comparative clinical and cost effectiveness adds to PBM or payer uncertainty regarding a drug’s value, which in turn increases likelihood that the drug will be excluded,” Tufts says in its latest Impact Report (subscription required).
The report finds that PBM drug exclusions are important because health system payers are responding to rising drug costs with new, more restrictive formulary management policies, including the drug exclusion list. The analysis says that such exclusion lists of drugs that are not eligible for reimbursement and recommended alternatives in the same therapeutic class are posing challenges for drug developers. “Going forward,” the report says, “PBMs and payers will continue to respond to rising drug costs by embracing novel approaches to formulary management, which will challenge the biopharmaceutical industry to provide more concrete evidence of clinical superiority and cost-effectiveness of their products.
After a decade of declining growth rates due in part to patent expiration, Tufts says prescription drug costs have grown, partly due to new hepatitis C treatments and other specialty drugs. Future drivers of cost growth rates are seen as new-generation lipid-lowering agents and new classes of oncology drugs.
The report describes steps taken by CVS Caremark in excluding 124 drugs for 2016 and Express Scripts in excluding 80 drugs. “Both PBMs claim that the majority of drugs removed from their formularies are higher cost, clinically inferior drugs,” it says. “In addition to exclusion lists, formulary management tools used to temper cost growth include tiered formularies, prior authorization, step therapy, and off- and on-label indication restrictions.”
Tufts found that drug manufacturer patient discount coupon or co-pay offset provisions appear to play a key role in determining exclusion decisions.
The researchers also found that PBMs do not always recommend the more cost-effective brand drug. When comparing one brand name drug to another in the same therapeutic class, the report says, in some cases the more cost-effective brand is selected as the recommended alternative, while in other cases it is excluded. At least one drug, Novo Nordisk’s diabetes drug Victoza (liraglutide), was excluded by one PBM despite having demonstrated superior cost effectiveness.