In the past several weeks Express Scripts and CVS Healthcare have announced exclusivity deals with Abbvie and Gilead respectively, for their Hepatitis C medications. The deals offer access to the extremely costly medications that have been previously denied formulary inclusion by these massive PBMs. 

At first glance, this is extremely good news; Express Scripts alone covers 25 million lives with their national preferred formulary. By their own estimates, the incidence of hepatitis C in their client plans range from 0.3 to 0.7%, with a rare client seeing 1%. So, using the 0.7% that would be about 175,000 hepatitis C sufferers who now have access to Viekira Pak, a ground breaking treatment. CVS’s deal with Gilead’s Harvoni offers roughly the same. 

Express Scripts would like the good news to continue as well. Chief Medical Officer Steve Miller recently told the WSJ Pharmalot Blog that they’d like to extend the exclusivity approach to other therapeutic categories. 

Getting patients access to life saving medications is not just a good thing, it’s a great thing. However, we also believe that these exclusive deals are setting a dangerous precedent because they: 

  1. Take treatment decisions out of the hands of provider and patient
  2. Create an environment where product cost is the main determinant of a treatment, rather than clinical guidelines (new guidelines favor Gilead’s Harvoni over Abbvie’s Viekira Pak, which is more cumbersome and may require additional medications such as ribavirin that have additional side effects)
  3. Emphasize immediate cost savings rather than total costs of care 

Although much can be written on points 1 and 2, we think the focus is our third point. In May 2014, advisory firm EY found that payers are highly focused on immediate cost containment rather than the longer-view approach that emphasizes outcomes and lowering total costs. While the price of drugs definitely play a role in rising healthcare costs, it is impossible (at least in my mind) to discount the effect of outcomes. 

In all of the quotes from Express Script and CVS management, justifying their deals to the public, nowhere did I find mention of the health economic outcome research (HEOR) that played into their decision. PBM’s pay for drugs, not medical benefits. It’s easy for them to say that if efficacy is equivalent, go with the drug you can get the cheapest. If they pay less for drugs, their margin is wider, regardless of say, a patient having to go to the hospital as a result of a side effect from a drug. That cost is assumed by the medical benefit.

 

Related Read: The Cost of Drug Safety

 

Express Scripts’ and CVS’ clients, as well as anyone who is concerned with rising healthcare costs should be particularly interested in seeing the justification behind these arrangements. They should be asking questions and gathering data to ensure they are comfortable with the decisions that are being made for them, by two organizations (PBM and pharma) that have drastically different incentives than their clients.

 

Related Read: Drug Safety Advocate Call to Action

 

If Express Scripts has their way, exclusivity deals will become common practice, immediate cost savings will remain the single most important factor in formulary decisions, and the minutiae of factors that contribute to overall downstream medical costs like adverse drug events will take a back seat resulting in potentially higher final medical costs and poorer patient outcomes.

Very soon we will be releasing a Drug Safety Monitor via AdverseEvents Explorer comparing the safety of Viekira Pak to Sovaldi and Harvoni.

 

Related Read: Did Express Scripts Choose the Right Hepatitis C Drug?

 

 

If you would like to see a copy of this analysis, please register for a complimentary trial of AdverseEvents Explorer.

 

 

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Jim Davis

Jim Davis

Executive Vice President

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Topics: Managed Care

Jim Davis

Written by Jim Davis

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