CVS Health—which runs the nation’s second-largest PBM, CVS Caremark—announced this week its formulary exclusions for 2016. Making news across media outlets was the exclusion of Viagra, the world’s first treatment for erectile dysfunction, which has annual sales of $1.8 billion. Lilly’s rival drug Cialis remains an approved treatment for ED on the formulary.

Also excluded from CVS' formulary is Johnson & Johnson’s Invokana and Invokamet, which posted $596 billion in combined sales for the first half of 2015.

CVS also will not cover Avonex and Plegridy, two interferon-based Biogen drugs for multiple sclerosis. Avonex is Biogen’s second-best selling drug, with sales of $1.3 billion in the first half of the year. Plegridy, a newer long-acting version of the drug, had sales of $136 million.

Express Scripts also released their drug exclusion list, although with less fanfare. The PBM dropped AstraZeneca’s Onglyza and Kombiglyze for 2016, citing a potentially higher risk of hospitalization due to heart failure. Like CVS, it also excluded Vivis’ closely watched obesity treatment Qsymia.

Our Take: PBM exclusion lists continue to grow, particularly for specialty pharma. Adam Fein notes:

There are 80 products on Express Scripts’ 2016 formulary exclusion list, compared with 66 on its 2015 list and 48 on its 2014 list. CVS Health’s new list has 124 products, compared with 95 products on its 2015 list. As far as I know, Caremark became the first PBM to publish an exclusion list, when it removed 34 drugs from 2012’s standard national formulary.

Being excluded from a national formulary isn’t necessarily a death sentence for drug marketers, as individual plans are often customized to meet the needs of large employers. But PBMs are becoming increasingly bold with the categories they are willing to entertain preferential therapies. 

Just ask Biogen about Avonex—it’s doubtful that anyone in Cambridge would have predicted that their popular multiple sclerosis treatment would be dropped from coverage. 

A lesser-known example is UnitedHealthcare’s recent restrictions on enzyme replacement therapies for Gaucher’s disease, finalized in September 2014. Not surprisingly, their decision drew the ire of the National Gaucher Foundation:

We firmly believe that treatment for Gaucher disease should not only be evidence-driven but also personalized based on patient history and unique disease characteristics. Premature assignment of preferential placement of one ERT for Gaucher disease (as exemplified by the new United Healthcare policy) undermines the value of expert physician judgment, unnecessarily interferes with the physician-patient relationship and limits our ability to comprehensively understand the effect of treatment on long-term clinical outcomes.

Gaucher’s is a rare but debilitating and disfiguring disease, affecting about 10,000 people worldwide. The impact it has on children and their families cannot be understated. Why UnitedHealthcare chose to focus on these particular specialty drugs last year is puzzling. More interesting is the little media attention that their new treatment guidelines received.

Drug makers should not underestimate PBMs and their increasingly aggressive approach to formulary management, even for drugs that treat serious and sometimes rare conditions.

Source: Darwin Research Group, adapted from http://www.cvshealth.com/sites/default/files/FDR0116_31140_fmt_sec.pdf

Source: Darwin Research Group, adapted from https://www.express-scripts.com/art/pdf/Preferred_Drug_List_Exclusions2016.pdf

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