It’s that time of year again. It’s August, the summer is winding down and people are taking their last vacations before the kids go back to school. Football players are in training camp and baseball pennant races are coming down to the wire. And most importantly to all of us at AdverseEvents, Prescription Benefit Managers (PBMs) are telling the world which drugs they are excluding from their preferred drug formulary coverage in 2015.
Last week, we found out that Express Scripts and CVS Caremark will be excluding two drugs from their respective formularies, Vimovo (naproxen/esomeprazole) and Duexis (ibuprofen/famotidine). The news was not so good for the maker of those drugs, Horizon Pharma, whose stock is down more than 30% since the announcement was made. Horizon stated in their 8-K that these formulary deletions could cost them 30% of their revenue and the market reacted accordingly. These drugs both combine an anti-inflammatory agent with an anti-ulcer agent, seemingly a very logical and safer combination since heavy anti-inflammatory use can sometimes cause ulcers. However, each individual component of these drugs is available much cheaper if they were prescribed separately. Based on this, Express Scripts and CVS decided the combination drug was a waste of money (namely theirs) and they weren’t going to tolerate it anymore. Now, everybody is speculating whether other combination drugs that combine cheap generic individual components are next on the PBMs’ chopping block.
Related Read: Did Express Scripts Make the Right Formulary Exclusions?
This week, Express Scripts released the rest of their exclusion list which added 23 more names of drugs that it will be excluding from their formulary next year. The most notable new exclusions were Amgen’s Aranesp and Epogen. Although not as impactful to Amgen as the Vimovo/Duexis losses for Horizon, when drugs totaling $2.7 Billion in annual US sales are dropped from a PBM’s formulary coverage, the news is still nonetheless eye opening. In this instance, there was once again a similarly effective alternative with JNJ’s Procrit, which has been on the market since 1989. Although the price of the drugs appears to be similar in 2013, price once again must have been the determining factor to make Express Scripts drop Epogen/Aranesp from the preferred formulary list and keep Procrit on it.
The first lesson that I learned from these formulary changes is that PBMs have a large and growing amount of pricing power. The thought of being put on this exclusion list scares pharma companies to death, and they will do what it takes from a pricing standpoint to stay off of it. This year, only 25 drugs were added to ES’s exclusion list compared to 44 drugs last year. That tells me that more companies played ball this year on pricing with ES to keep their drugs off of the list. In addition, pharma companies managed to get eight drugs back on the preferred list in 2015, namely Advair, Stelara, Micardis/Micardis HCT, Exalgo, Avinza, Rhinocort Aqua, Auvi-Q and Maxair HFA. It was reported on Tuesday of this week in FiercePharma that GSK dropped their price aggressively to get Advair’s name off of the exclusion list. The exclusion in 2014 cost GSK a lot of Advair market share and they took a big step to get some of that market share back by dropping their price.
The second lesson is these changes aren’t always about cost. Sometimes, efficacy is a factor. Stelara, a psoriasis treatment from JNJ, was excluded last year presumably because it costs more than the preferred tnf-Alpha inhibitor treatments Enbrel and Humira. This year, Express Scripts took Stelara off of the excluded list and actually added it as a preferred alternative treatment list, presumably because the drug has a different mechanism of action than Enbrel/Humira and provides an additional health benefit for psoriasis patients. Stelara was the only one of the eight drugs mentioned to make this jump from excluded to a preferred alternative treatment. Another example of an efficacy drop was Incivek, where Sovaldi, despite being more expensive, has become the standard of treatment because of vastly superior cure rates in Hepatitis C.
The third lesson and most important from our perspective is that post-market drug safety is starting to become a factor in these formulary decisions and will become an even larger factor over the next several years. When drugs have a similar therapeutic benefit but a markedly different safety profile, PBMs and other payers should keep the more dangerous drug on the excluded list and the safer alternative on the preferred list. This concept should apply even when the more dangerous drug is cheaper. In AdverseEvents’ last white paper on Diabetes, my colleague Dr. Keith Hoffman analyzed our data on DPP-IV drugs, and found that Nesina is the most dangerous drug in the class while Onglyza is the safest. In the 2015 Express Scripts list, Nesina remains on the excluded list while Onglyza remains on the preferred list. This lines up well with our safety assessment for the class. As a comparison, according to Fierce Pharma, CVS Caremark continues to keep Onglyza on their excluded list in 2015 despite being the safest of the DPP-IV inhibitor class. We obviously still have a long way to go to convince PBMs and other payers about the importance of post-market safety in making these formulary decisions.
In our latest paper on Statins, published this week, we highlight the excellent safety profile of Simcor, a drug which combines generic Zocor (Simvastatin) with Niacin. Interestingly enough, this statin combination product has a much better safety profile compared to the stand-alone statins like Crestor, Lipitor and even Zocor by itself. We also analyze the laundry list of adverse events that have been blamed on statins, like diabetes, muscle conditions, cognitive effects, cancer and others to try to separate fact from fiction on whether statins actually cause these things. We also compared every drug in the statin class to see which scored the worst and best for each of these individual risks. One of the interesting things that we found was that Simcor has the better profile for muscle conditions (myalgia, rhabdomyolysis, muscle weakness) and cognitive/mental impairment compared to others in the class. This is another example of the type of information that we think should be an important factor for P&T committees in making formulary decisions.
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Chief Product Officer