although so far the PBM has only dropped five drugs, targets could appear on the backs of other highly expensive drugs as reviews of products continues. (Photo: Getty)
Drugmakers, beware: if you boost the price on your products too much, a pharmacy benefit manager may just kick it off its list of approved formularies as the default option for doctors to prescribe.
That's what CVS Caremark has started to do, according to Fierce Healthcare, to save its PBM clients bucks. In fact, CVS Caremark estimates that it has saved its PBM clients an average of $15 per 30-day supply on drugs, with clients on its new formulary model paying an average of $88.30 for a 30-day drug supply, compared to $102.58 for other formulary designs.
In 2017, the program began to weed out "hyperinflated" drugs that have much cheaper equivalents and don't have the quality metrics to back up those high prices. And although so far the PBM has only dropped five drugs—leading to a 99 percent drop in use by members—targets could appear on the backs of other highly expensive drugs as reviews of products continues.
One drug thus targeted is the muscle relaxant chlorzoxazone in 250-mg tablets. Its cost averages $2,902 for a 30-day supply. The lower-cost option is cyclobenzaphrene, which weighs in at a considerably lower average of $1.76 for a 30-day supply. The removal of chlorzoxazone, CVS estimates, could save clients $34,812 on a patient's yearly supply.
"We continually review and identify drugs that are seeing high price increases and those that are outliers based on price including new market entrants," wrote Derica Rice, CVS Health executive vice president and president of Caremark. "This flexible approach of ongoing reviews and removals—rather than annual—helps ensure that clients can stay ahead of rapidly changing market trends, rather than simply reacting to market changes."
The other four drugs Caremark has already dropped include the diabetes extended release 1000-mg Metformin ER tablet, which averages $617 for a 30-day supply. Regular Metformin only costs $3.80 for a 30-day supply.
Then there's the nonsteroidal anti-inflammatory drug Femoprofen in 200-mg caplets, which averages $3,001 for a 30-day supply. Its alternative, diclofenac sodium, only runs $6.62 for a month's supply.
The topical anesthetic cream lidocaine tetracaine costs $731 per 30-day supply, but its cheaper alternative lidocaine prilocaine is only $22 for a 30-day supply.
And last but certainly not least are the folic acid and vitamin D supplement Ortho DF 3,775 Unit-1 mg tablets, which cost $2,858 for a 30-day supply. A regular folic acid supplement alone only runs $1.50 for a 30-day supply.
"Our focus continues to be on developing — and evolving — strategies that help our pharmacy benefit management clients stay ahead of the changes," Rice wrote. "In 2018, we were able to keep the impact of price growth to 3.1 percent despite drug price inflation of more than 25 percent."
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
