News & Events

PHSI President Tim Kosty and Vice President Don Dietz contributed to the November/December 2019 edition of ComputerTalk for the Pharmacist. In their Viewpoints article, Tim and Don discuss how the oversupply of pharmacists along with evolving technology may lead to new offerings of innovative clinical services.

Click here to read Tim and Don’s article entitled “2020: Clinical Services Out of Necessity?” You can read full versions of current and past ComputerTalk issues at https://www.computertalk.com/issue-archive/.

On December 1, 2019, changes will go into effect that impact pharmacies, pharmaceutical manufacturers, and wholesalers. The United States Pharmacopeia (USP) introduced its new chapter <800> on handling hazardous drugs. Regulatory agencies worldwide will begin enforcement on December 1, 2019.

The USP initially announced a June 1, 2019 rollout for chapter <800>, but a six-month extension has provided pharmacies, long-term care facilities, and other affected entities increased time to bring their facilities and standard operating procedures up to code.

Several important considerations exist for pharmacies and other entities that handle hazardous drugs:

• New requirement for externally vented, negative pressure labs for manipulations (other than counting or repackaging) of hazard drugs (HDs)
  • Splitting/crushing (HD) tablets no longer allowed in regular workspace
• New requirements for designated areas for receipt, unpacking, and storage of HD

For more information on compounding and handling hazardous drugs, full chapters are available for free download at: https://www.usp.org/compounding.

While facilities dedicate significant energy, time, and resources into finalizing compliance, new regulations on hazardous waste (HW) disposal from the Environmental Protection Agency (EPA) have already gone into effect. August 21, 2019 marked the federal effective date of EPA’s Resource Conservation and Recovery Act (RCRA) Part 266 Subpart P policy on hazardous waste pharmaceuticals.

New requirements for HW management under Subpart P may prove costly for both pharmacies that produce over 220 lb. of hazardous waste in one calendar month and for manufacturers that function as reverse distributors.  Key takeaways include:

• Sewer prohibition: HW pharmaceuticals may not be disposed of down the drains or flushed
• Requirements for EPA-approved HW transporters for shipment of non-creditable HW pharmaceuticals
  • Non-creditable HW pharmaceuticals —defined as pharmaceuticals that do not have a reasonable expectation to be used/reused or reclaimed—must be shipped using an EPA-approved HW transporter
  • Potentially creditable HW pharmaceuticals—those in original packaging, undispensed, and expired less than one year–have a reasonable expectation to receive manufacturer credit. Potentially creditable products can be shipped from healthcare facilities using common carriers (e.g., UPS, USPS, FedEx)
• New standards for residues remaining in “empty” containers:
  • “Empty” containers are defined as empty vials, syringes, unit-dose, and stock/dispensing bottles smaller than 1 liter or 10,000 pills
  • Residues of empty containers are not regulated as HW, but containers larger than these sizes are deemed as HW.

PHSI’s view is that manufacturers and distributors of bulk package-sized hazardous drugs, such as warfarin and spironolactone, should take a closer look at the new EPA and USP <800> regulations. Buyers may become more hesitant to purchase large quantities of hazardous pharmaceuticals. Hazardous drugs deemed broken/leaking, repackaged, dispensed, and expired past 1 year automatically become classified as non-creditable HW. An increase in generated hazardous waste each month may result in a healthcare facility becoming required to abide by all sections of Subpart P.  Subpart P went into effect on Aug 21, 2019 in Iowa, Alaska, Indian Country, and some U.S. territories. Remaining states have until July 21, 2021 to adopt the new regulations. Check with your state for specifics.

PHSI would like to thank our student, Carissa Dolan, LECOM Pharm.D. Candidate, for her contributions to this article.

Posted November 2019

2019 Fall Newsletter:

2020 Formulary Exclusion Lists

2020 Formulary Exclusion Lists:

A Review of Express Scripts, CVS Caremark, and OptumRx

It’s that time of year again, PHSI’s annual review of the PBM formulary exclusion list updates!  Express Scripts (ESI), CVS Caremark, and OptumRx have published their formulary exclusion lists for 2020.  Based on PHSI’s calculations, OptumRx leads the way with 246 new formulary exclusions.  Of those 246 exclusions, 169 (69%) were for brands that have covered generic equivalents.  CVS Caremark added 100 new exclusions; 32 of those 100 exclusions (32%) were for brands with available generics.  ESI will exclude an additional 35 drugs, 13 (37%) of which are multisource brands.  The new 2020 exclusions, as researched by PHSI, are as follows:

Excluded multisource brands with available generics are as follows:

During the review, PHSI made the following observations:

• OptumRx seemed to pay more attention to the topical corticosteroids class this year, excluding an additional 13 agents that may not have specific generic equivalents. Examples of excluded agents include Psorcon cream, Ultravate lotion, and Cloderm cream.
• With the 2020 additions, OptumRx more than tripled the number of drugs on its list of excluded brand-name medications with generic equivalents. The total number of drugs on OptumRx’s list of excluded brand-name medications with generic equivalents is now approximately double that of ESI’s list.  Optum indicates that “these brand-name medications have been identified as having available generic equivalents covered at Tier 1 on the formulary.”  This change may signal OptumRx’s increased commitment to reduce unnecessary drug spend.
• ESI seemed to focus on the hematological class for 2020, with approximately 14% of the new exclusions coming from this category. ESI’s list of agents excluded for 2020 includes Jadenu, Jadenu Sprinkle, Nuwiq, Granix, and Mulpleta.  PHSI believes that ESI may be leading the PBM charge as it relates to hematological agent exclusion.  With many new hematological products expected to launch, we anticipate that this will become a more tightly controlled category in subsequent years.
• CVS focused heavily on the dermatological category for 2020 exclusions, with an additional 19 dermatology agents being added to the exclusion list. Examples of excluded agents include mupirocin cream, Acanya, Finacea Gel, and fluocinonide cream 0.1%.
• CVS is making a strong push to exclude high cost dietary supplement agents. Twenty-five dietary supplements were added to the exclusion list for 2020, with folic acid being the preferred on-formulary alternative.  Because these products are not FDA-approved and often have high costs, this can be an effective way to manage plan drug spend.  Examples of excluded dietary supplements include Xyzbac, Mebolic, Dexifol, and Vasculera.
• CVS Caremark is becoming manufacturer-specific in their formulary exclusions; they note five products where specific NDCs are excluded. For example, CVS’s formulary excludes benzonatate NDCs 69336-0126-15 and 69499-0329-15.  Excluded NDC 69336-0126-15 has a per-unit WAC of $71.42, while pharmaceutically equivalent GPI competitors have WAC pricing of $2.20 per unit.  For a product that may be reimbursed at a non-MAC rate, choosing the correct manufacturer’s product can have impactful reimbursement consequences for payers.
• With the launch of lower cost generic tadalafil, all three major PBMs have chosen to exclude brand Cialis in 2020.
• As mentioned in our 2019 Exclusion List Review, ESI continues to use indication-based management for the “inflammatory conditions” drug class. Reviewing the updates to that category, Inflectra and Renflexis are no longer preferred agents for 2020.

Each of the major PBMs has taken a different approach to managing drug spend in 2020 and formulary exclusions continue to play a major role.  PBMs exclude products because of clinical, financial, and humanistic reasons.  They are making value judgments and have decided covering these products is no longer warranted.  This article represents PHSI’s analysis of publicly available information regarding the three PBMs’ formulary exclusion lists for 2020.  Readers are encouraged to assess the lists for themselves.  Links to the exclusion list source information are provided below.

• CVS Health 2020 Exclusion List
• Express Scripts 2020 Exclusion List
• OptumRx 2020 Exclusion List

Posted November 2019

2019 Fall Newsletter:

Last Call for USP Chapter <800>

PHSI Consultant Ashley Ellek contributed to the September/October 2019 edition of ComputerTalk for the Pharmacist. In the Viewpoints article, Ashley discusses upcoming Drug Supply Chain Security Act (DSCSA) deadlines for wholesalers and the impact on manufacturers and pharmacies. The article also outlines requirements for pharmacies coming in November 2020.

Click here to read Ashley’s article entitled “Pharmacy Requirements for DSCSA Deadlines”.  You can read full versions of current and past ComputerTalk issues at https://www.computertalk.com/issue-archive/.

PHSI Consultant and Partner Ann Johnson contributed to the July/August 2019 edition of ComputerTalk for the Pharmacist. In the Viewpoints article, Ann discusses the biosimilar four-character suffix assignments and the impact of these suffixes on product appearance in EHRs, pharmacy management systems, and wholesaler ordering systems.

Click here to read Ann’s article entitled “Impact of Biologic and Biosimilar Naming Suffixes.”  You can read full versions of current and past ComputerTalk issues at https://www.computertalk.com/issue-archive/.

PHSI Consultant, Partner Ann Johnson presented at the American Society for Automation in Pharmacy (ASAP) 2019 Midyear Conference. Along with a background on digital therapeutics, Ann discussed the FDA’s Proposed Framework for “Prescription Drug-Use-Related Software” and opportunities for adherence initiatives, data available from digital therapeutics, and the role that pharmacists can play. Click here to view Ann’s presentation slides.

Digital Therapeutics and the Role of the Pharmacist

You can access all of the 2019 ASAP Midyear Conference presentations at http://www.asapnet.org.

Fred Gebhart writes about pharmacy technology maintenance in Drug Topics.  PHSI Consultant and Partner, Melissa Krause, was quoted in the June 2019 issue of the publication.  To see the entire article, “Why Technology Upkeep is Up to You,” visit https://www.drugtopics.com/technology/why-technology-upkeep-you/.

PHSI Consultant Dave Schuetz contributed to the May/June 2019 edition of ComputerTalk for the Pharmacist. In the Viewpoints article, Dave discusses the importance of regularly scheduled reviews of pharmacy invoices to ensure that wholesaler contractual terms are being met or exceeded.

Click here to read Dave’s article entitled “Wholesaler Agreements: Pricing Caveats”. You can read full versions of current and past ComputerTalk issues at https://www.computertalk.com/issue-archive/.

One of the biggest responsibilities of health plans and self-insured employer groups is selecting a PBM partner.  When that selection is being made, health plans and large self-insured employers frequently undertake an RFP (request for proposal) process, narrow down the candidates, and then perform a diligent review of the finalists.  Once a PBM is chosen, the health plan or employer group reviews and negotiates contract terms to finalize an agreement.

Health plans or employer groups enter into PBM contracts that make several guarantees, specifically as it relates to rebates, PBM operational performance (guarantees), and reimbursement rates.  Although a diligent review should be performed before the agreement is signed, what steps are health plans and employer groups taking after the agreement is in place to ensure that the contract terms are being met?  When dealing with PBM contracts, it is imperative that guarantee language is clearly defined.  A regularly scheduled review of the data is critical to ensuring contract obligations and guarantees are being met or exceeded.

When rebates are being calculated, the contract should clearly specify which claims are eligible for rebates.  Will rebates be paid on specialty drugs, and if so, how is a specialty drug defined?  Does the site of dispensing (retail vs. mail) impact the rebate?  How does the contract define a brand vs. generic drug?  Are there different rebate guarantees for 30-day vs. 90-day retail prescriptions? These are only some of the questions that should be answered in the contract language, but having well-defined terms is half the battle.  Once the contract is in place, an ongoing assessment is critical to ensure the plan performance meets the expectations.  For one of our employer group clients, this means a quarterly review of claims data and a comparison of the data against the rebate guarantee information provided by the PBM.  By monitoring the data, we proactively identify any discrepancies, estimate rebate dollars based on historical trends, and better negotiate future PBM contract extensions.  Whether the assessment is performed in-house or outsourced to consultants may depend on the individual health plan or employer group.

When evaluating reimbursement rates and effective rate guarantees, health plans and employer groups need to ensure that brand and generic drug definitions are clear.  The contract language should also include verbiage around different reimbursement scenarios.  Contracts should list what reimbursement rates will apply to single-source generics and prescriptions dispensed with different DAW (dispense as written) codes, such as DAW 5, brand dispensed as a generic.  Using the defined definitions, claims data is used to audit and ensure that the claims are being reimbursed appropriately and rate guarantees are being met or exceeded.  A review of the data can also identify scenarios that are negatively affecting the health plan or employer group, including identifying specific drugs that are having a negative financial effect.  Although some situations may be allowed under the current contract, a review can pinpoint problematic areas for future contract renegotiation discussions.

Negotiating PBM contracts with well-defined terms is crucial.  Concise contract language makes it easier to conduct post-contract audits and ensure that the PBM is meeting or exceeding the contractual terms.  Health plans and employer groups should have programs to monitor rebate guarantees, proactively identify discrepancies, and bring them to their PBM’s attention for resolution.  These reviews also assess other factors and provide insight into the PBM operations, enabling the health plan or employer group to negotiate better terms in future agreements.  PHSI has extensive experience helping health plans and employer groups evaluate PBM contracts and analyze data.  Let us know if we can help!

Posted May 2019

2019 Spring Newsletter:

Biologic Naming Update

The FDA has released “Nonproprietary Naming of Biological Products Guidance for Industry.”  This document includes guidance for both 351(a) products (original biologics) and 351(k) products (biosimilars).  Biosimilar suffixes have four letters and are devoid of meaning.  These suffixes are designed for tracking, adverse event reporting, and to aid in prescribing. Related biological products and biosimilars may have different indications for use, but pharmacists do not typically receive information on a patient’s disease state to know which manufacturers’ product to pick.  The biologic suffixes help by allowing prescribers to issue prescriptions using the correct suffix to cover the exact indication needed for the patient.

Reactions to the FDA’s guidance have been mixed.  Originally, the FDA proposed to apply the suffixes retroactively to existing biologic products.  On March 7, 2019, FDA released additional guidance on naming conventions for biologics.  The full guidance is available at: https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm632870.htm.

There are several important considerations for pharmaceutical manufacturers, pharmacies, and payers.

• Existing biologic products that are currently FDA approved will not be assigned four-character suffixes – this is a reversal of the FDA’s previous guidance on this topic
  • Any new biologic or biosimilar introduced in the future would receive a four-character suffix.
• New biologic products, including insulins and growth hormones (among others), will receive a four-character suffix.

PHSI’s view is that “nothing” will be sorted before “something”, so products that do not have a suffix may be listed before/above products that do have a suffix.  This means that the non-suffix originator products will likely appear before biosimilars in pharmacy systems and EMRs when showing chemical names, which may lead prescribers and pharmacists to see them before/above the biosimilar products for product selection purposes.

Beyond the chemical name field, there are EHR implications due to the RxNorm[1] listings for biologic products.  Biosimilars do not link to the original brand product in RxNorm and subsequently in electronic transactions that rely on RxCUI.  For example, each of the three available infliximab products (brand and two biosimilars) have different Generic RxCUIs[2] because of the 4 letter suffixes added to the “generic” name of the biosimilars.  So those biosimilar versions of infliximab do not link to the originator brand for product selection purposes.

From the compendia perspective, it will be interesting to see how product selection options are displayed for biologic products in the future.  Wolters Kluwer has announced that they are offering a file to help their customers determine potential substitution groups for biologic products.  Currently, compendia listings for biosimilar products do not directly link those products with the original biologic product of the same molecule.  In other words, originator biologics and biosimilars do not share a GPI or GCN.  Offerings like a substitution grouping file would provide additional insights to pharmacies, payers, prescribers, and EHRs regarding product selection options for biologics.

As biologic and biosimilar products evolve, more discussions will occur around how to properly identify specific biologic product selection options for prescribers.  For more information on the pharmacy, payer, and prescriber implications, contact PHSI.

[1] RxNorm, from the National Library of Medicine, “provides normalized names for clinical drugs and links its names to many of the drug vocabularies commonly used in pharmacy management and drug interaction software, including those of First Databank, Micromedex, Gold Standard Drug Database, and Multum. By providing links between these vocabularies, RxNorm can mediate messages between systems not using the same software and vocabulary.”  More information available at https://www.nlm.nih.gov/research/umls/rxnorm/.

[2] RxCUI stands for “RxNorm concept unique identifier.”  “Everything in RxNorm receives an RXCUI, which is unique to that concept. An RXCUI is essentially the “name” of a concept that computers read and understand.”  More information available at https://www.nlm.nih.gov/research/umls/rxnorm/overview.html.

Posted May 2019

2019 Spring Newsletter:

The Importance of PBM Contract Review Post Implementation