ESI Launches Digital Health Formulary

In December 2019, Express Scripts (ESI) announced the launch of their Digital Health Formulary, which went into effect January 1, 2020.  To develop the formulary and choose which products to include, ESI reviewed clinical research, evaluated member experience and product usability, and analyzed the financial value of each product.

ESI lists the following as their Digital Health Formulary:


As apparent in the chart above, the number of on-formulary products is limited.  Those included only treat a small range of diseases including diabetes, cardiovascular, pulmonary, and mental health conditions.  Noticeably absent from the formulary are several high-profile digital health products, specifically those mentioned on the Digital Therapeutics Alliance (DTA) website.

The DTA is a trade association with a mission to “broaden the understanding, adoption, and integration of clinically-evaluated digital therapeutics into healthcare through education, advocacy, and research.”  The organization established digital therapeutics foundational principals and Industry Core Principles.  DTA members include Bayer, American Association of Diabetes Educators, Boehringer Ingelheim, Headspace, Otsuka, Novartis, Sanofi, and other.  Members have developed products aligning with the Industry Core Principles, and case studies for these products are published on their website.  Products include WellDoc’s BlueStar, Voluntis’ Insulia, and Propeller Health’s Propeller.  Of these three digital therapeutic products, only one, Propeller Health, is included on the ESI Digital Health Formulary.  Other digital therapeutic products notably absent from the ESI formulary include Pear Therapeutics’ reSET and reSET-O, intended to treat Substance Use Disorder (SUD) and Opioid Use Disorder (OUD), respectively.

The publication of ESI’s Digital Health Formulary raises as many questions as it answers.

  • What were the specific reasons why the limited products were approved?
  • What other products were evaluated but not included?
  • If products were not placed on the formulary, were the reasons primarily clinical, humanistic, or financial?
  • Will ESI eventually publish a Digital Health Exclusion list similar to their Formulary Drug Exclusion List?
  • What is the expected growth rate of the Digital Health Formulary and how many products will be evaluated and/or added in 2020?
  • How will other PBMs react to this Digital Health Formulary and is this something we should expect to see from CVS Caremark and OptumRx in the future?

While the answers to these questions are not yet known, a major payer’s publication of a Digital Health Formulary clearly indicates a shifting industry mindset.  Obtaining formulary coverage for digital health products is just the first hurdle in the market.  With coverage now available for some digital therapeutic products, it is more important than ever that manufacturers have their products accurately listed in the drug compendia databases to enable physician e-prescribing and ordering through EMRs and EHRs.

PHSL offers a full range of drug compendia services and is experienced in evaluating digital health product labeling and assisting manufacturers with getting their products accurately listed in the drug compendia systems.  If payer coverage is the first hurdle, EHR listings and e-prescribing are the second hurdle in product uptake.  PHSL is well situated to address these hurdles and help providers of digital health products.  Let us know how we can assist your company in meeting your digital health goals!


Posted January 2020

Aspirin Knowledge Quiz

The National Community Pharmacists Association (NCPA) recently released a quiz assessing healthcare provider knowledge about the use of aspirin in primary and secondary prevention of heart disease.  For pennies a day, aspirin can lower the risk of a heart attack or stroke.  Test out your knowledge to see how much you know about the drug and its uses: Take the quiz!


Posted: December 2019

An Overview of Haven Healthcare

A healthcare partnership between Amazon, JPMorgan, and Berkshire Hathaway was first announced in January 2018 and formally named “Haven” in March 2019.   We have previously noted that with Amazon’s foray into healthcare, including the PillPack acquisition, Amazon could grow its business through a PBM acquisition (  The Haven model does not seem to include such an acquisition, but the “simplified medical plan” will include a prescription drug benefit with flat copays.  Cigna and Aetna will run the plans in Ohio and Arizona.

Knowing Amazon’s history in other market segments, Haven’s first health insurance plan offering could disrupt the current healthcare market.  The Haven Healthcare plan will be offered in 2020 to US employees.  Amazon will pilot the program with employees in CT, NC, UT, and WI, and JP Morgan Chase with employees in OH and AZ.  The joint venture may have clinical and technology employees based in both Boston and New York.

The plan features free preventive care, no coinsurance or deductibles, flat copays for visits to in-network providers (ranging from $15 to $110), and flat-fee fixed copays for medical services, procedures, and prescription drugs, along with annual out-of-pocket maximums.  Will these apparently rich benefits create an adverse selection amongst employees?

The goals include making primary care easier to access for employees, simplifying insurance benefits, making prescription drugs more affordable, and using data and technology to improve healthcare.

In addition to these stated goals and features, Amazon’s PillPack may benefit from being able to offer prescriptions directly to the employee members.  While these features and goals sound impressive, it remains to be seen whether Haven Healthcare can actually break into the complex health insurance market.


Posted December 2019

Unapproved Products and the Drug Pricing Compendia

Most medical foods, nutritional supplements, dietary supplements, probiotics, and multivitamins are considered unapproved products according to the Food and Drug Administration (FDA).  The FDA defines dietary supplements as “products taken by mouth that contain a ‘dietary ingredient’. Dietary ingredients include vitamins, minerals, amino acids, and herbs or botanicals, as well as other substances that can be used to supplement the diet.”  While the FDA requires prescription drugs to meet safety, efficacy, and quality standards, these same requirements are not in place for the aforementioned products.  Unlike prescription drugs, dietary supplements are not intended to treat, diagnose, cure, or alleviate the effects of diseases.

Knowing that the same rigorous standards are not applied to dietary supplements, many wonder how the drug compendia providers handle these products.  Drug compendia subscriptions are purchased by numerous stakeholders, including PBMs and health plans, who rely on this information to make formulary coverage decisions.  In an effort to provide their customers with the needed information, compendia publish specific fields to distinguish between prescription, OTC, and unapproved products.

First Databank (FDB) may mark these products as ‘Other’ in the “Rx/Non-Rx Indicator” field, while Wolters Kluwer’s Medi-Span has the “Marketing Category” field to specify whether a product is an “unapproved homeopathic”, “unapproved other”, “medical food”, or “dietary supplement”, among others.  Elsevier Gold Standard uses the “License Type Name” field to list some products as “dietary supplements” or “medical foods”.  Although Cerner Multum is not as granular in their identification, most unapproved products can be identified by searching the “nutritional products” or “alternative medicines” categories.

As payers focus on additional ways to reduce spend, eliminating coverage for unapproved products is an increasing area of focus.  In PHSL’s fall newsletter on 2020 Formulary Exclusion Lists, we found that CVS is making a strong push to exclude high cost dietary supplement agents, with 25 additional dietary supplements excluded in 2020.  To aid in identification of these unapproved products, FDB has announced the addition of a “Q” code to their existing Class value field.  The already existing Class values of “F” and “O” will remain.  “F” will designate prescription drugs and medical devices as defined in the Food Drug and Cosmetic Act, including bulk drug ingredients.  “O” drugs will include non-prescription drug or medical devices.  FDB will create a new “Q” Class value for “products that are neither drugs nor devices, such as dietary supplements (including prenatal and other vitamins), medical foods, herbal preparations, and bulk flavorings or colorants.”  This change will enable stakeholders to more easily identify unapproved products, but what to do with this information remains at the discretion of the FDB customer.  Medi-Span has not announced a corresponding update to their drug compendium, but PHSL will continue to monitor for new developments on this topic.  PHSL can assist manufacturer clients in assessing their current product portfolio and helping to determine potential impact.


Posted: December 2019

PHSI’s David Schuetz Named NCPDP Work Group 2 Product Review & Billing Unit Exception Task Group Co-Lead

PHSI’s Senior Consultant David Schuetz will be an NCPDP WG 2 Product Review & Billing Unit Exception Task Group Co-Lead.

Work Group 2 Product Identification

This work group deals with issues relating to the identification of drugs and health related products within NCPDP’s stated mission. Identification consists of how the product is billed (billing units, package size designations), product identification systems, and any type of descriptive data which serves to uniquely identify a product with the intent to establish standards for product identification such that there is no ambiguity in distinguishing one product from another.

Product Review and Billing Unit Exception Task Group

This task group will review and analyze all drugs that are exceptions to the Billing Unit Standard (BUS) to determine how each should be categorized for billing and document within the BUS. Package Size discrepancies among the compendia will also be addressed. They will request submission of QUIC forms when appropriate and will review all QUIC Forms received prior to the WG meetings.

Dave is one of the numerous volunteers that contribute each year to the development of NCPDP’s standards and provide direction to pharmaceutical manufacturers as they plan to launch new products.  We congratulate him and wish him well in this leadership role.


Posted November 2019

Payer/PBM Owned Specialty Pharmacies…The Next Frontier for 340B

340B eligible hospitals and health systems have realized that many of their patients are not allowed access to their specialty pharmacies, due to plan sponsors (employers/health plans/PBMs) having an exclusive arrangement with the plan sponsors’ specialty pharmacies. To resolve this issue, 340B covered entities are now partnering with the big PBM/payer-owned specialty pharmacies; in exchange, the 340B covered entity adds these specialty pharmacies as a contract pharmacy in their 340B network.

Due to the economic incentives provided to 340B covered entities to support underserved patients, specialty pharmacies within their 340B network stand to make more margin than they may from typical commercial plan reimbursements. The 340B covered entities obtain access to discounted specialty pharmaceuticals and increase pharmaceutical manufacturers’ exposure to 340B discounts. These arrangements have grown dramatically in the last three years.

While more commercial and Medicare Part D lives fall within the 340B program, pharmaceutical manufacturers are heavily discounting more medications AND paying formulary rebates.  This raises the question: how many commercial PBMs/payers are sending rebate claims for patients that are treated at pharmacies within the 340B covered entity network?  While most pharmaceutical manufacturer agreements require commercial payers to exclude 340B prescriptions from their rebate submissions, identifying these claims can be difficult.  If these claims are not identified correctly, pharma will be double dipped, providing discounted medications and paying rebates.

Pharmaceutical manufacturers’ 340B discounts are exploding.  The high cost of specialty drugs and the discounts required through the 340B program provide an incentive for the hospital, pharmacy, and PBM/payer to want more of these types of pharmacy claims.  As a result, pharmaceutical manufacturers are going to respond to declining revenue and specialty medication profitability by increasing prices on existing medications and factoring these increases into specialty medication launch prices.

The current NCPDP claim standard would allow PBMs and payers to require that the covered entity’s facility ID, prescriber’s NPI, and pharmacy’s NCPDP number be submitted during the claims adjudication process to triangulate whether a claim is associated with the 340B program. These same data elements should be included in the rebate claims submission files sent to pharmaceutical manufacturers.  Industry stakeholders should address the shortcomings of the 340B program to help ensure this program does not excessively enrich covered entities, pharmacies, and PBMs/payers, but rather supports patients who cannot afford adequate insurance coverage.


Posted: November 2019

October Drug Take-Back Day

Mark your calendars for the 18th National Prescription Drug Take-Back Day on October 26th, 2019 from 10am-2pm! In 2018, 9.9 million Americans misused prescription pain medications, most often taking medications from a family member. This event is an opportunity for people to safely and easily return unused or unwanted medications to help prevent these substances from getting into the wrong hands.

There are exceptions to what medications can be returned. Do not bring illicit drugs, such as marijuana, heroin, or LSD. Insulin syringes and inhalers are also not accepted at take back locations, due to an unintended puncture or possible explosion risk.

Accepted medications include prescription medications, over-the-counter medications, supplements, and herbals in tablet, capsule, ointment, or patch form. Liquid medications may not be accepted at all locations. Removing personally identifiable information on prescription bottles is recommended but is not required.

Visit to find a location site near you and learn more about Drug Take-Back Day.

If you cannot make it to the scheduled event, use the DEA’s collection site locator to find approved disposal locations in your area year-round.


Posted October 2019

New Medicaid Rebate Law

Excluding Authorized Generics from Brand Drug AMP Calculations Increasing Medicaid Rebate Costs for Pharma

The Fair and Accurate Medicaid Pricing Act has been signed into law and will impact Medicaid Rebates paid by pharmaceutical manufacturers.  The Act eliminates the inclusion of less expensive Authorized Generic pricing in the calculation of the Brand drugs Average Manufacturer Price (AMP), which is the basis for Medicaid Rebates.  Now, Brand drug manufacturers will not be able to lower the AMP price by including Authorized Generic sales.  The AMP for Brand drugs will be solely based on the Brand drug sales increasing the brand manufacturer’s rebate costs.

PHSI previously described the OIG report that identified this potential change here:

Brand Drugs without Authorized Generics will not see changes to the current Medicaid Rebates.  Future plans for Authorized Generic launches may be impacted by this regulatory change.


Posted October 2019

2019 World Pharmacists Day

According to the International Pharmaceutical Federation (FIP), September 25, 2019 is World Pharmacists Day and is themed, “Safe and effective medicines for all”.  As a pharmacist-led consulting firm, PHSI focuses on the business of pharmacy and sees both great challenges and great opportunities for the future of pharmacy.  We celebrate this World Pharmacists Day with pharmacists from across the world.


Posted: September 2019

A Comparison of Direct Patient Care Services in Large Chain Pharmacies

In an era of dwindling prescription reimbursements and high brand drug costs, community pharmacies nationwide are actively expanding their clinical and direct patient care services to both supplement traditional prescription revenue and to meet the ever-increasing demand for affordable, reliable, and easily accessible patient care.

Three key competitors in chain pharmacy, Rite Aid, CVS, and Walgreens have made significant investment into developing and integrating in-store clinical services. How do the clinical services offered, and accessibility compare between these clinics?  There is significant overlap in the services offered and the base services at all three clinics include:

  • Treatment for common conditions like flu, colds, strep throat, and earaches
  • Treatment of common digestive ailments
  • Point of care testing
  • Smoking cessation programs
  • Vaccinations (either in clinic or at the pharmacy)
  • Physicals

Rite Aid launched RediClinic in 2005 and has since expanded to more than 60 operating locations, mostly in Philadelphia Rite Aid locations and partnered H-E-B grocery stores in Texas. In addition to the base services offered, RediClinic offers medically supervised weight loss and lifestyle modification services certified by the American College of Preventive Medicine (ACPM). RediClinic also provides cosmetic consultations for Latisse, Lustra, and Vaniqa.

RediClinic is staffed by nurse practitioners and physicians assistants to serve patients. RediClinics have begun incorporating new virtual health care in the form of RediClinic Express.  RediClinic Express is a video kiosk with integrated testing devices, staffed by a trained medical assistant. RediClinic Express locations are open longer hours and can connect patients to licensed physicians within the InTouch health network.  Appointments may be scheduled online, but walk-in appointments are also welcome.  Most RediClinic services, excluding vaccinations and physicals, are offered through their Express locations. Resulting prescriptions can then be sent directly to Rite Aid Pharmacy or the patients’ pharmacy of choice. Telemedicine prescribing is limited to non-controlled substances.

CVS’s Minute Clinic boasts 1,100 operating clinics with similar base services. In addition to in-store visits, CVS offers telemedicine services via smart phone or computer.  Telemedicine appointments can be made at any time and done from a patient’s home, but telemedicine services are limited to minor conditions, as no direct testing can be performed; prescribing is limited to non-controlled substances.

CVS recently announced a planned expansion of their Minute Clinics in several U.S. cities to include a HealthHUB at 1,500 CVS Pharmacy locations by 2021.  These HealthHUBs will offer expanded services and include a full blood lab, licensed nutritionists, physicians, yoga studios, expanded pharmacy services, smoking cessation programs, women’s health services, and chronic disease state management for type II diabetes, hypertension, and high cholesterol.

Walgreens Healthcare Clinic provides the standard base walk-in services and several chronic disease state management services at 400 metropolitan locations nationwide. On-site clinics are generally staffed by physicians’ assistants and nurse practitioners.  Telemedicine services are offered 24/7 either over the phone or through video chat, with a similar range of services as CVS. No testing is available via telemedicine. Telemedicine services provide patients with access to licensed physicians, with prescribing being limited to non-controlled substances.

All three companies offer their services for a similar price point depending on insurance coverage. Most major insurers are accepted at all locations. CVS and Walgreens also offer flat-rate cash pricing of $59 for telemedicine services for those without medical coverage.

As the race to assert dominance in the community clinic market intensifies, these companies will continue to add unique specialties and services to attract more patients. The questions remain, how do these clinics compare in market standings, and how will they attract patients? CVS currently leads the competition due its vast number of operational facilities and ambitious plans for expansion tied to its recent Aetna acquisition, which would allow for in-network coverage at Minute Clinic facilities. Walgreens comes in second, having several hundred clinics currently operating and a partnership with Humana which could include a similar in-network coverage deal at Walgreens Healthcare Clinics. However, Rite Aid, though lacking a third-party health plan/health insurer affiliation, has potential to disrupt the niche marked for telemedicine with its novel RediClinic approach. This strategy is dependent upon gaining access to payer networks.  Change in access to healthcare is here and whether the pharmacy chains will be able to modify consumer behavior accessing medical services in their locations will ultimately determine the strategies success or failure.


Posted: August 2019