In 2017, Express Scripts Holding Co. (NASDAQ:ESRX) plans to add a minimal number of drugs in its formulary for the treatment of arthritis and psoriasis. On the other hand, the Pharmacy Benefit Management (PBM) will exclude a number of blockbuster drugs from the list next year.
The drug exclusion has been in process since 2014 due to the price hike and extra burden on patients’ pocket. The PBM is in favor to include generics and biosimilars due to their cost effectiveness, safety profile, and efficacy. According to the company, approximately 85 molecules will be excluded from the formulary in 2017.
This is the consecutive third year that PBM has implemented the drug exclusion plan, which includes molecules of big names in the sector. The drugs in the exclusion list include Novo Nordisk molecule Victoza and two insulin formulations. Moreover, to patch up the Victoza space, the PBM has preferred Eli Lilly’s diabetes franchise due to its price and benefits. Simulteanously, Gilead’s blockbuster hepatitis C virus (HCV) drugs are out of the formulary and AbbVie’s combo formulation Viekira Pak and Technivie will remain a part of the list in 2017.
The PBM aims to make its position more robust in order to negotiate with pharmaceutical companies pertaining to price factor and benefits to the patients and authorities itself. The company expects to save $1.8 billion in 2017 compared to $1.3 billion this year.
According to the pharmacy benefit manager, Express Scripts is expected to cover more than 25 million people in the US. The pharmacy benefit manager has maintained its position giving a tough time to other companies. Its operations have mail-order system and run the second-largest specialty pharmacy with an overall sale of $2.5 billion in 2015.
Moreover, CVS Health has also started the main technique of exclusion of the drugs from the last few years. According to the PBM, kicking off the drugs saved handsome amount for the patients, increasing pressure on the drugmakers to offer benefits and price compensation.
Express Scripts and its biggest pharmacy benefits rival, CVS Health, started the exclusionary formulary trend a few years ago by kicking off a handful of meds that were found costly and can be easily replaced. The list of exclusions grew year by year as the PBM got a more aggressive approach about pitting drugmakers against one another for discounts. Drug classes with many rivals such as diabetes and hep C, have been particularly vulnerable to exclusions.
On the other end, Eli Lilly is going through a setback as its latest anti-inflammatory molecule Taltz has failed to make its place in the 2017 formulary, as Express Script preferred Novartis’ Cosentyx. Eli Lilly’s GLP-1 drug Trulicity has been inducted and replaced Victoza, while GlaxoSmithKline’s Tanzeum could not make to 2017 list.
Furthermore, Merck’s Zepatier, Bristol-Myers Squibb Daklinza and Gilead’s blockbuster HCV Sovaldi also failed to make it to the formulary. Valeant pharmaceutical’s Zyclara has also been excluded from the list due to its high price. The molecule is indicated for the management and treatment of actinic keratosis covering a big population.
Express Script has also excluded the recently-modified gout drugs, which is an improved version of colchicine. In addition, Horizon Pharmaceuticals’ combo drug Vimovo and Duexis was also excluded from the formulary in 2015 and since then the drug has failed to get registered in the formulary due to its price factor.
Morgan Stanly has given an Underweight rating on the company’s stock. Bernstein has also given an Underperform rating to its shares.
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