A Review of the Express Script (ESI) Flex Formulary


Last month, Express Scripts announced that they will be introducing a new Flex Formulary, which is expected to mirror the Express Scripts National Preferred Formulary (NPF) as a starting point.  The new Flex formulary will allow ESI to easily add new, lower cost products in the middle of a plan year as they are introduced into the market.  The Flex formulary will be adjusted when authorized generic products or lower cost brand NDCs launch.

ESI states that they will evaluate the lower-cost alternatives and determine whether they obtain preferred or non-preferred status.  If added, ESI can adjust the formulary to exclude the corresponding brand or other brand products within that therapy class.  Authorized generics (AGs) of hepatitis C treatments Epclusa and Harvoni recently launched, and these AGs are expected to be the first products evaluated under the new formulary.  Likewise, a new, lower-cost NDC of Repatha recently become available; it will likely be evaluated for inclusion as well.  With the Flex formulary, employers can choose to cover the new, lower-priced option or continue to cover the original brand formulary product, which would likely have a rebate yield impact.  This provides flexibility for those who favor a lower net cost or those who are rebate driven.


The Flex Formulary creates more opportunity for authorized generics in brand-only categories and maybe a viable option for pharmaceutical manufacturers launching into a crowded market when their product doesn’t offer clinical superiority.  It may also usher in more Repatha-like strategies where brand manufacturers launch a new, lower-priced NDC of the same branded product.  In the past, brand manufacturers could feel safe when they had achieved formulary placement for a given calendar year.  With the Flex formulary, there will be volatility for brand manufacturers competing in crowded brand-only categories.  Having a drug covered at the beginning of the year does not guarantee coverage throughout the plan year; the brand’s coverage may be re-evaluated, should a competitor choose to launch a lower cost NDC or an authorized generic. Although not expressly noted in press releases, PHSI anticipates the formulary could also be evaluated if an ANDA generic is approved and introduced

The Flex formulary may be most beneficial for patients in high deductible or coinsurance-based health plans, as they will see the most savings from new, lower priced products.  The Flex formulary could create disruption for patients throughout the plan year, as a medication covered at the start of a plan year could become non-formulary in the same calendar year.   This will require more vigilance on the part of the healthcare providers to understand which products are covered/preferred at any given time.  If ESI’s Flex Formulary is successful, we may see other PBMs adopting this methodology in the future, changing the way we think about drug coverage, manufacturer contracting and product marketing strategies.


Posted December 2018

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