On the heels of Express Scripts’ announcement of its 2016 Exclusion list, CVS Health has followed suit and released their list with a surprise announcement as well. In our recent blog post, Did Express Scripts Just Save the Healthcare System an Additional $107.8 Million?, we posed a relatively simple question-- does the downstream medical cost of the side effects of excluded drugs outweigh the downstream medical costs of the preferred drugs? We determined through some back of the envelope math that as a whole Express Scripts made choices that not only benefited their clients’ bottom line, but most importantly, patient safety.

With CVS’ 2016 Exclusion List, we took our analysis a step further, and demonstrated that there are not only acquisition cost gains and losses to be seen with these decisions, but that slight differences in safety profiles between drugs of the same class can affect large populations of patients. Subsequently, these resulting downstream medical costs can also change a ROI proposition for inclusion.

The example we’ll use is in Type 2 Diabetes with the Sodium-Glucose Transporter 2 Inhibitor (SGLT-2) class of drugs. CVS ruled in favor of Farxiga over Invokana. While I’m sure CVS was able to negotiate a great deal with AstraZeneca, data obtained via AdverseEvents Explorer* shows Farxiga to be a less safe option, with a much higher downstream cost of drug adverse event (RxCost®) per prescription than Invokana, with an RxCost of $19.86 vs. $3.98 respectively. Based on some quick estimations, if all of CVS’ members that were prescribed a SGLT-2 were prescribed Farxiga instead of Invokana, it translates into an additional $170 million in downstream medical costs that CVS clients foot the bill for.

Here’s the math:

CVS Members 65,000,000 Source
% of Americans with Diabetes 13% Source
CVS Diabetes 8,125,000.00  
SGLT-2 % in 2020 11% Source: Evaluate Pharma
CVS SGLT-2 893,750.00  
Avg. # of Scripts/Year 12 Daily dose, 30 day fills
CVS SGLT-2 Scripts 10,725,000.00  
RxCost Difference $15.88

Farxiga RxCost = $19.86

Invokana RxCost = $3.98

 

Total RxCost Added by Excluding Invokana for Farxiga

 

$170,313,000

 

 

 

To CVS’ credit, we have no idea if the short-term acquisition cost offsets this additional, long term burden. If the deal they negotiated brought Farxiga’s cost to $15.88 less than Invokana’s, then the total cost burden would be equal.

However, if I were CVS’ client, I’d be asking questions and looking for transparency into not only the discount that the PBM received, but the evidence that brought them to conclude this exclusion was in the client’s best interest.

More importantly, if I was one of the approximately 900,000 patients covered by a CVS plan that have been prescribed a SGLT-2, I’d be asking questions to better understand the additional risk that Farxiga presents. As we have stated, short term savings cannot undermine patient safety.

To see more data on Type 2 Diabetes Medications, please download our recent report: GLP-1, DPP-4, and SGLT-2 Drugs for Type 2 Diabetes: An Analysis Utilizing AdverseEvents Explorer.

 

*AdverseEvents Explorer – Learn more

 

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Jim Davis

Jim Davis

Executive Vice President

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Jim Davis

Written by Jim Davis

As Executive Vice President, Jim is responsible for the commercialization strategy for Advera Health Analytics.