News & Events

Formulary Exclusion Lists for 2019

CVS Health, Express Scripts (ESI), and Optum Rx have published their formulary exclusion lists for 2019.  When comparing the number of new exclusions, PHSI has found slight variances between what PBMs announce, what outside entities report, and what PHSI research uncovers.  Numbers can vary based on whether multiple formulations of the same drug are counted as one or multiple additions (e.g. Vanatol S vs. Vanatol LQ).  While PHSI includes newly-excluded multi-source brands (brands that now have generics available), other reporting entities exclude these drugs from their totals.  With that disclaimer stated, PHSI has completed its annual analysis of the formulary exclusion lists.

PHSI calculates that ESI added an additional 59 items to their exclusion list, including both single-source and multi-source brands.  In an August Twitter post, CVS Health reported removing 23 drugs from the standard formulary for 2019, while other sources reported 26 removals.  When PHSI reviewed the January 2018 vs. January 2019 formulary drug removals, we noted 37 new exclusions.  Optum Rx will exclude 50 additional drugs in 2019.  The new 2019 exclusions, as researched by PHSI, are as follows.

PBM 2019 Exclusions Chart

During the analysis, PHSI observed the following highlights:

  • There are some interesting exclusions in the HIV and Hepatitis C treatments, such as Atripla for HIV (excluded by Express Scripts and Optum) and Mavyret for Hep C (excluded by CVS and Express Scripts).
  • There are new exclusions in hemophilia (Factor VIII products) as well, with Express Scripts excluding Eloctate, Recombinate, and Xyntha.
  • In the multiple sclerosis category, CVS, Express Scripts, and Optum will exclude Extavia. Optum also excludes Plegridy.  Optum notes that “existing utilizers of these medications will be allowed to continue on therapy.”
  • The PBMs also note other specialty product exclusions, such as the injectable Hyalgan (CVS), Saizen (Optum and CVS), and Berinert (ESI), as well as some fertility drugs.
  • PBMs also appear to be focusing on more cost-effective pain management therapies and some have excluded Lazanda and Sprix.
  • The introduction of Viagra generics in 2018 continues to shift coverage to lower cost products. In addition to the usual exclusions of brand products that have generic versions available, Stendra is now excluded on CVS and Optum lists (not mentioned on Express Scripts).
  • The new class of CGRP migraine prevention agents had not made it onto the exclusion list since the drugs are so new, but Express Scripts has announced that they will cover Aimovig and Emgality, excluding Ajovy.[i]

Express Scripts uses indication-based management for the drug class of “inflammatory conditions,” which addresses products with a variety of indications including psoriasis, psoriatic arthritis, ankylosing spondylitis, among others.[ii]  Express Scripts notes the following regarding this drug class:

ESI Indication Based Management Graphic

New for 2019 – PHSI has also analyzed Optum’s exclusion list.[iii]  While PHSI did not analyze Optum’s list in past years, PHSI notes that this list contains some updates from previous versions, including the addition of some new products such as Admelog and Sprix.

Interestingly, Optum has handled the “immunomodulator” class, as well as Hepatitis C and MS, using a “required prior authorization” approach.  This is akin to step therapy, though OptumRx does not use that term.  The following is an excerpt from Optum’s list on this topic:

Optum PAs Graphic

Optum’s list notes the following regarding these classes:

“All of the products listed above are currently subject to prior authorization.  Preferred medications are required prior to new requests for non-preferred medication(s).  Existing utilizers of non-preferred medication(s) within the therapeutic categories of Hepatitis C, Immunomodulators, and Multiple Sclerosis will be eligible to remain on current therapy if compliance and efficacy of therapy are demonstrated.  Exceptions will be granted for specific indications where the preferred agents do not have FDA-approval for use.”

The major PBMs have taken different approaches to managing drug spend in 2019, but formulary exclusions in general continue to play a large role in that management.

This article represents PHSI’s analysis of publicly available information regarding these three PBMs’ formulary exclusion lists for 2019; readers are encouraged to assess the lists themselves.  Links to the exclusion list source information are provided below.

[i] Available https://www.managedhealthcareconnect.com/content/express-scripts-covers-amgen-lilly-migraine-therapies-excludes-teva-drug?hmpid=bWtyYXVzZUBwaHNpcnguY29t.  Accessed October 23, 2018.

[ii] Express Scripts 2019 National Preferred Formulary Exclusions.  Available https://www.express-scripts.com/art/pdf/Preferred_Drug_List_Exclusions2019.pdf.  Accessed October 23, 2018.

[iii] Optum January 1, 2019 Premium Formulary Exclusion List.   https://hr.nd.edu/assets/291074/optumrx_premium_formulary_exclusions_jan.._1_2019_finalv4.pdf.  Accessed October 23, 2018.

 

2018 Fall Newsletter:

“What Happens When We Run Out of NDC Numbers?” – FDA Announces Public Hearing

ComputerTalk for the Pharmacist September/October 2018

PHSI Consultants Melissa Krause and Ann Johnson contributed to the September/October 2018 edition of ComputerTalk for the Pharmacist. In their Viewpoints article, Melissa and Ann discuss the impact of drug product listings in the drug compendia to various stakeholders.

Click here to read Melissa and Ann’s article entitled “Importance of Correct Data in Health IT”. You can read full versions of current and past ComputerTalk issues at https://www.computertalk.com/issue-archive/.

ComputerTalk for the Pharmacist July/August 2018

PHSI President Tim Kosty contributed to the July/August 2018 edition of ComputerTalk for the Pharmacist. In his Viewpoints article, Tim discusses the impact of the 21st Century Cures Act on electronically shared health information and the technology necessary to establish an interoperable system.

Click here to read Tim’s article entitled “Interoperability, FHIR, and Blockchain”. You can read full versions of current and past ComputerTalk issues at https://www.computertalk.com/issue-archive/.

Amazon Acquiring PillPack: Industry Perspectives

Pharmacy Practice News shares multiple perspectives on Amazon’s acquisition of PillPack.  PHSI President Tim Kosty contributes thoughts on the financial viability of multi-dose packaging by pharmacies.

Click here to read the entire article.

Single Source Biologics with Suffixes

Mepsevii (vestronidase alfa-vjbk) and Hemlibra (emicizumab-kxwh) are both single-source innovator products that have the 4-character, lowercase suffixes.  Neither have approved biosimilars.  With the introduction of Sandoz’s filgrastim-sndz in 2015, the FDA has added suffixes to generic names for biosimilars.  Between 2015 and 2018, the FDA provided additional guidance to the industry on biologics and biosimilars, including generic naming and suffixes.

The FDA uses suffixes to distinguish between biologic products with the same generic name, as they do not want to rely upon NDCs and branded names alone to determine the specific product utilized.  Their concern is pharmacovigilance and the ability to assign adverse events to specific manufacturers’ products.

The FDA will apply the suffix naming convention to all biosimilars and biologics, including both newly-licensed and existing products.  This will avoid adverse provider perceptions about product quality if only biosimilars included a suffix, while the originator was suffix-less.  In the future, all products approved with a BLA under 351(a) of the Public Health Service (PHS) Act will be assigned a suffix on the generic name.  Remicade (infliximab), Neupogen (filgrastim), and other originator biologics do not yet have suffixes, even though marketed biosimilars are available for these biologics.  This is still a work in progress for the FDA.  BLA applicants are requested to submit up to 10 proposed suffixes to the FDA.  These suffixes must follow the FDA-defined rules, which include having unique, four lowercase letter combinations that are devoid of meaning.  Be on the lookout for these updated naming conventions coming soon.

 

2018 Summer Newsletter:

The Challenges of Specialty Generics Competing with Orphan Brands

 

The Challenges of Specialty Generics Competing with Orphan Brands

Generic pharmaceutical manufacturers face several challenges when launching the first or second ANDA generic that competes with an orphan brand product.  Challenges include the following:

  • Will the brand manufacturer partner with another manufacturer (or subsidiary) to launch an authorized generic?
  • Should you contract with specialty pharmacy partners? If yes, do you approach the same specialty pharmacies that distribute the brand product?
  • Will the brand company increase rebates to the PBMs to influence their coverage decisions?
  • What requirements will the large PBM-owned specialty pharmacies demand to support your generic product, including price, support fees, and data fees they are receiving from the brand manufacturer?
  • What are the pros/cons of bypassing the wholesalers and direct contract with a handful of specialty pharmacies?
  • What, if any, financial assistance programs will the generic manufacturer consider? What experience does the generic manufacturer have working with patient support groups and/or offering copay cards?

These specialty products serve small patient populations and the brand price is often very high. Limited access to active pharmaceutical ingredient (API), a difficult manufacturing process, and a small patient population may limit the discounting the generic manufacturer is able to provide.

Generic manufacturers must understand the pharmacy landscape for the existing brand product (i.e.: more aligned with PBM owned, stand-alone, or health plan owned pharmacies) to determine its pricing and support strategies. Strategic questions include:

  • Are PBM incentives being addressed if all the discounts are given to the specialty pharmacy or vice versa?
  • Are health plans and their specialty pharmacies aligned to pursue lowest net cost regardless whether its via plan rebates or pharmacy discounts?
  • Will stand-alone specialty pharmacies have the payer coverage to provide adequate access to your product?

These questions should be addressed before finalizing a pharmacy and payer strategy. Specialty pharmacies and payers welcome the generic entrants to drive price competition in the marketplace.  The eventual marketing strategy must account for the influence these stakeholders exert on the payment and dispensing of the ANDA generic.

PHSI works with pharmaceutical manufacturers, PBMs/MCOs, and specialty pharmacies to help each stakeholder better understand market dynamics. Whether it is pipeline products or those where generics or biosimilars compete, PHSI has the expertise and resources to help our clients make informed business decisions to compete in a changing market.

 

2018 Summer Newsletter:

Single Source Biologics with Suffixes

Interoperability, FHIR, and Block-chain presented at ASAP 2018 Midyear by Tim Kosty

ASAP 2018 Midyear
 

PHSI President Tim Kosty presented “Interoperability, FHIR, and Blockchain: Where Do We Go from Here?” at the American Society for Automation in Pharmacy (ASAP) 2018 Midyear Conference. Tim’s presentation reviewed the challenges in developing and the progress in creating an interoperable health system, including the announcement from Apple that it will be creating a patient health record using the fast healthcare interoperability resources (FHIR) process. He explored the challenges for healthcare technology companies, healthcare providers, pharmacies, and patients, and discussed whether these efforts solve the right problem and whether technology such as blockchain will make these efforts obsolete.

Click here to view the presentation slides.

You can access all of the 2018 ASAP Midyear Conference presentations at http://www.asapnet.org.

ComputerTalk for the Pharmacist May/June 2018

PHSI President Tim Kosty and Vice President Don Dietz contributed to the May/June 2018 edition of ComputerTalk for the Pharmacist. In their Viewpoints article, Tim and Don discuss in detail four recent proposed mergers in the healthcare market and examine their impact on the pharmacy market.

Click here to read Tim and Don’s article entitled “Merger Mania Accelerates”. You can read full versions of current and past ComputerTalk issues at https://www.computertalk.com/issue-archive/.

PHSI to Attend NACDS Total Store Expo

PHSI President Tim Kosty, Vice President Don Dietz, and many of PHSI’s consultants will be attending the 2018 NACDS Total Store Expo in Denver, Colorado on August 25-27. PHSI will have an exhibit set up at booth number 2912. If you would like to schedule a meeting with a PHSI team member, please click here to send us a message.

To learn more about this conference, visit the Total Store Expo website at http://tse.nacds.org

New NCPDP Standards Up for CMS Approval

Expect Approval in 2018 or Early 2019 and Deadline for Implementation Before or During 2021

In the next couple of years, the versions of the NCPDP standards used for online claims adjudication and electronic prescriptions will be changing.  Under HIPAA, CMS has the authority to name the specific version of these two standards for use across the industry.  The version currently in use for adjudication is NCPDP Telecommunications Standard D.0, mandatory since January 1, 2012, and the version currently in use for e-prescribing is NCPDP SCRIPT Standard 10.6, mandatory since November 1, 2013.

NCPDP membership started the process to request that CMS create a new rule naming a current version of each standard for use throughout the industry.  The process has progressed further for the SCRIPT Standard for e-prescribing.  On November 28, 2017, CMS published a proposed rule in the Federal Register recommending the adoption of SCRIPT Version 2017071 to become effective on January 1, 2019, at which time SCRIPT Version 10.6 would be retired.  The industry is strongly in favor of moving to the new version, but many consider the proposed deadline to be too aggressive.  During the comment period, parties, such as Surescripts, expressed concern that the January 1, 2019 deadline does not allow participants enough time to develop new software code, test the code internally and with business partners, and implement the software in thousands of practice sites.  Most commenters recommend a deadline that is 24 months from the effective date of the final rule mandating a new version of the SCRIPT Standard.  The industry is waiting for CMS to respond to industry comments and publish the final rule.

The process for naming a new version of the Telecommunications Standard is moving much slower.  At its November 2017 Work Group Meetings, NCPDP membership approved a request proposing Telecommunications Standard F2 to be the next named standard.  NCPDP submits the request via the DSMO (Designated Standard Maintenance Organizations), which forwards the request to the NCVHS (National Committee on Vital and Health Statistics) to send to CMS.  The industry is waiting for NCVHS to hold the appropriate hearing, which is scheduled for 3/26/2018.  If the hearings result in the recommendation to adopt F2, NCVHS will send a letter to the Secretary of HHS, which could lead to CMS publishing a new proposed rule naming F2 as the new standard.  When that event occurs, the industry can offer comments prior to CMS finalizing the rule.  The process to adopt Telecommunications Standard F2 is at least six months behind the process to adopt SCRIPT Standard 2017071, which means the earliest F2 could be adopted is July 2019.

However, it is difficult to predict how long these final approval processes will take.  The industry should expect final approval sometime in 2018 or early 2019.  These developments mean the new standards could be mandatory by 2021.  Pharmacy system vendors, EMR/e-prescribing software vendors, and claims processors should be preparing for these changes.  NCPDP members have access to the documentation created by membership for both SCRIPT and Telecommunications Standards, allowing for preparation to begin now.

Even though each standard will likely follow their own timeline, the possibility exists that individual development, testing and implementation of the changes to the two standards will overlap.  Vendors will need to size up each change and make sure to allocate the proper resources to meet the deadlines CMS will define in the final rules. PHSI will provide an update once CMS acts and publishes the final rules.

 

 

Update on New Standard Versions May 2018

In the final rule issued in April 2018, CMS officially adopted the NCPDP SCRIPT Standard Version 2017071 beginning on January 1, 2020 to replace the prior version 10.6.  It is interesting that CMS established January 1, 2020 as the implementation due date, a mere 20 months from the issuance of the final rule. Typically, the industry asks for 30 to 36 months to implement a new version of a standard.  This rule feels like CMS is saying to the industry that that is not good enough and to find a faster way to implement the new version.  Come Summer of 2019, it will be interesting to see how many vendors come forward asking for an extension of the deadline and the CMS response to such a request will be equally interesting.

There is also movement toward a new version of the Telecommunication Standard.  On May 17th, NCVHS recommended the adoption of Version F2.  NCVHS asked the Secretary of HHS to expedite the rulemaking as feasible, but to also be sure to allow the industry sufficient time to comply.  Specifically, the committee asked HHS:

  • To the extent possible, publish the final rule by the end of 2019.
  • To provide a two year implementation timeline, using June as the compliance month.
  • To require that the updated version of the standard be used by the compliance date, but allow both versions of the standards to be used for a one-year period after the compliance date to enable an effective transition period that allows the use of version D.0 and the new version F2.
  • To require full compliance by the end of the third year, and only allow use of Version F2.

The Committee also asked that industry, specifically the Medicare and Medicaid programs, be given sufficient time and encouragement for thorough end-to-end testing before any go-live date.

The industry now awaits the proposed and final rule from CMS. There are probably many software vendors that are hoping the approval of a new telecommunications standard will be delayed so it doesn’t coincide with the new e-prescribing standard. The NCVHS recommendation to use June as the compliance month instead of January 1st is a step in the right direction.  There are also rumblings that telecommunications standard version F2 is already obsolete and that during the comment period after the new proposed rulemaking is published, the industry should push for a move to a newer version that includes some recently required attributes.

See more information from the NCVHS letter to the HHS Secretary via this link: https://ncvhs.hhs.gov/wp-content/uploads/2018/08/Letter-to-Secretary-NCVHS-Recommendations-on-NCPDP-Pharmacy-Standards-Update.pdf

Stay tuned for more information about this and the expected new proposed rulemaking with approval of the telecommunications standard.

 

 

2018 Spring Newsletter

New & Improved Medicare Cards to Arrive Starting April 2018

Welcome Kinley Ruthann Ellek