PHSL Newsletters

Federal Trade Commission Eyeing Drug Patents in Orange Book

The Federal Trade Commission (FTC) has taken the position that certain drug-device patents are not legitimate.  Asthma and COPD inhalers, obesity and type-2 diabetes injectables, glucagon nasal spray, epinephrine autoinjectors, and other drug-device combinations have recently been in the crosshairs of the FTC.   This has created controversy regarding hundreds of patent listings within the Food and Drug Administration’s “Approved Drug Products with Therapeutic Equivalence Evaluations,” commonly known as the Orange Book.

The FTC has long been dedicated to creating a free and fair marketplace.  The commission argues that the “illegitimate” patents block the FDA from approving a generic product for 30 months, due to legitimate patent holders’ ability to block such entry into the market through the FDA.  This is accomplished by filing an infringement lawsuit.  The regulatory commission has issued two rounds of letters to various manufacturers questioning the accuracy of their patents in an effort to promote fair competition in the marketplace.

In November of 2023, the FTC identified over 100 patents in the Orange Book, which are held by manufacturers of brand-name drug-device products. The commission then sent out warning letters to inform the respective manufacturers that it had submitted patent listing dispute communications to the FDA.  The FTC did not provide manufacturers with an extensive list of all patents the commission believed to be inaccurately filed, so it was then up to the manufacturers to verify the accuracy of each of their patents.  Some manufacturers complied with the letters and delisted patents.  Others chose to proceed with the other options in the FDA’s process, which gives the patent holder 30 days to either amend the patent listing or certify under penalty of perjury that the listing complies will all applicable regulatory and statutory obligations.  As of May 2024, the FTC has not taken further action against companies who refused to remove patents after receiving warning letters in November of 2023.

In April of 2024, the FTC again sent out warning letters to drug manufacturers whose patents are listed in the Orange Book.  This time, over 300 patents are being targeted by the FTC and are having their accuracy disputed.  It appears that the manufacturers who received letters are taking time to review them and determine a course of action.  The FTC is challenging the patents through the FDA’s process, despite explicitly stating that it reserves the right to escalate the situation and challenge the patents through Section 5 of the Federal Trade Commission Act.

A challenge through Section 5 of the Federal Trade Commission Act would be difficult for the FTC to execute.  First, the commission would have to develop a case to substantiate its claim that “only patents that claim active ingredients should be listed in the Orange Book.”  This will prove to be especially arduous, as the FDA has remained silent despite requests from the industry to provide guidance relating to listing drug-device patents.  Since the FDA is considered the expert arbiter when it comes to matters of the Orange Book, the FTC’s opinions of which type of patents are permissible in the Orange Book may be irrelevant.  Even in the event that drug-device patents are determined not to be listable, the patents still may not violate antitrust laws.  Case law in re Lantus Direct Purchaser Antitrust Litigation, Case No. 18-2086, held that pharmaceutical companies that wrongfully list patents in FDA’s Orange Book must prove that they acted in good faith in order to avoid any antitrust liability.  This means that any drug-device patents listed in the Orange Book in good faith would not be subject to consequences of violating antitrust regulations.

Despite the uphill battle for the FTC to prove antitrust violations, the commission is determined to continue its fight against patents it views as improperly listed and remains committed to identifying more patents that it believes are inappropriately listed in the Orange Book.  The FTC may even review patents that cover manufacturing processes, packaging, and Risk Evaluation and Mitigation Strategies (REMS).

The FTC’s public denunciation of these patents appears to be one of the biggest threats to patent holders.  The negative publicity is costing manufacturers valuable goodwill.  Even if the FTC escalates to the point of litigation, the outcome of the litigation could be secondary to damage done to the reputation of the manufacturer.  For this reason, pharmaceutical companies should be extraordinarily cautious to ensure that they are filing patents in good faith.  Filing of infringement action on an existing patent that clearly violates the FDA’s guidelines for filing in the Orange Book will likely be subject to a myriad of legal obstacles from multiple stakeholders including the FTC, generic applicants, and purchasers.

How the FTC will choose to handle patent holders who do not respond to their warnings is yet to be seen.  Its efforts have been successful in garnering some voluntary compliance from its subjects.  While further escalation appears unlikely, it cannot be ruled out.  Patent holders should operate under the assumption that their actions will be viewed under extreme scrutiny by the FTC.  PHSL will continue to follow the actions of the FTC.  What do you think the FTC will do to patent holders who do not delist their patents?  Should drug-device patents be listed in the Orange Book?  How could a future ruling against drug-device patents impact the industry?


Posted June 10, 2024

Spring 2024 Newsletter:

Is a New Pathway for OTC Coverage Coming?

PHSL to Attend 2024 NACDS Total Store Expo

Is a New Pathway for OTC Coverage Coming?

What do the IRS (Internal Revenue Service) and OTC products have in common? Let us fill you in on their new relationship. On October 4, 2023, the IRS published a Request for Information (RFI) in the Federal Register. The IRS was seeking information regarding insurance coverage of OTC preventative items and services without cost sharing and without a prescription.

Key Takeaways for Stakeholders

  • Three of the top federal agencies (Department of the Treasury, Department of Labor, and Department of Health and Human Services) are interested in the expansion of health insurance OTC benefits.
  • At first glance, the scope of coverage appears to be limited to OTC contraceptives, smoking cessation agents, and diagnostic tests (like COVID-19 tests); however, the proposal uses broad language to allow for expanded coverage of other OTC products that have not yet been identified.
  • Stakeholders who need to track the final ruling and prepare for implementation include:
    • OTC manufacturers whose products have potential to be seen as preventive products. This would include manufacturers of vitamins, OTC contraception products (foam, condoms, OTC oral contraceptives), baby aspirin, OTC acid reflux products, and OTC topical antibiotics, as examples.
    • Payers and PBMs who need to prepare for the expectation of covering these OTC products.
    • Pharmacies that may see an increase in OTC product requests.
    • Compendia providers who may receive more OTC listing requests. In order for pharmacies to process the OTC coverage, the products must be listed with the major drug pricing compendia who provide NDC (National Drug Code), UDI (Unique Device Identifiers), and pricing information, which would be required for a pharmacy to bill a payer.


The proposed rule was jointly issued by the IRS (Treasury Department), The Employee Benefits Security Administration (Department of Labor), and the Department of Health and Human Services (HHS). The RFI seeks insights regarding the application of the preventive services requirements under Section 2713 of the Public Health Service Act (PHS Act) for OTC preventive items and services available without a prescription by a health care provider.

Public comments were accepted until December 4, 2023. Approximately 391 comments were received and can be found at If passed, new regulations will require insurance and health plans to cover certain OTC products ordered with or without a prescription and with limited or no-cost sharing for the patient.

The impact of the proposed rule will affect more than just payers responsible for the new insurance coverage. If approved, the processing of OTC products will impact every player in the current prescription processing model. OTC manufacturers, payers, PBMs, EHRs, pharmacies, and the pricing compendia will all be required to enhance systems to enable the ordering, dispensing, and adjudication of the mandated OTC products.

Included OTCs

Each of the past and current initiatives described in the RFI contains one or more specific preventive OTC products (e.g., folate) or a preventive category (e.g., contraception). All of the following are mentioned in at least one or more initiatives.

  • Certain types of tobacco cessation pharmacotherapy, which are currently recommended by the USPSTF (United States Preventive Services Taskforce) with an A-rating for nonpregnant adults who use tobacco.
  • Folic acid supplements, which are recommended by the USPSTF with an A-rating to prevent neural tube defects for all persons planning to or who could become pregnant.
  • The guidelines for women’s preventive health services adopted and released by the Health Resources and Services Administration (HRSA Guidelines) include recommendations for:
    • OTC preventive products, such as breastfeeding supplies (for example, breast pumps and breast milk storage supplies)
    • Certain contraceptives
    • Coverage of the OTC progestin-only daily oral contraceptive recently approved by the Food and Drug Administration.

Expansion of OTCs

The RFI appears to leave two doors open so expansion of covered products may occur. First is the statement containing the verbiage “….including other OTC preventive products as they might become available on the market.” Second, Section 11-A Solicitation of Comments, uses the term “preventive products” but does not define the term.

“When coverage is offered for OTC preventive products that are prescribed by a health care provider, do cost sharing or other aspects of coverage vary by type of OTC preventive product? For example, are different cost-sharing requirements or medical management techniques imposed for OTC tobacco cessation products than for OTC breast pumps? Do coverage requirements or medical management techniques differ across different types of OTC contraceptives, such as between emergency contraception and condoms, or between medications and devices? What medical management techniques do plans and issuers commonly apply to OTC preventive products when the items are prescribed?”

Scope expansion can easily occur beyond the products specifically mentioned in the RFI. Does aspirin qualify as a preventive medication for heart attacks? Melatonin to prevent sleep deprivation? Topical antibiotics to prevent a topical skin or wound infection? Fish oil for heart health or other vitamin formulations, particularly if a health care practitioner provides a prescription?

Most of the 391 comments requested expansion of these types of OTC products and asked to address the aging population and why this group was not identified as one of the specific populations who have additional or disproportionately burdensome challenges to access OTC preventive products. Commonly mentioned products for this population included vitamins for bone strength, hearing and vision aids, and incontinence products.


PHSL recommends OTC manufacturers pay close attention as this RFI moves through the regulatory process. Three large federal agencies are involved, which significantly increases the possibility of this initiative becoming a law. OTC products have been in the spotlight lately on a variety of fronts – the FDA has already approved an OTC oral contraceptive. Health plans are expanding their focus to provide healthcare in underserved populations and communities, which is a major component of the proposal. Technical standard organizations are reviewing the current prescription adjudication electronic system for necessary modifications to seamlessly integrate OTC processing.

PHSL is poised to help OTC manufacturers list their products within the leading pricing compendia and will continue to monitor and report as information becomes available. Contact us if you’d like to learn more.


Posted June 10, 2024

Spring 2024 Newsletter:

Federal Trade Commission Eyeing Drug Patents in Orange Book

PHSL to Attend 2024 NACDS Total Store Expo

Florida Medication Importation Approved by FDA

On January 5th, the Food and Drug Administration (FDA) announced approval for the state of Florida to purchase and import medications in bulk from a Canadian wholesaler. This approval limits the import use to Florida’s Medicaid program, government clinics, and state prisons.

FDA Importation History

In 2020, the FDA approved plans to allow states to establish prescription drug import programs with the intended goal of reducing drug prices for US citizens. Florida was the first state to apply for approval in 2020. The federal court issued a January 5, 2024 deadline for the agency to rule on the state’s application after Florida sued the agency for “reckless delay.” Florida estimates the state would save approximately 150 million dollars on drugs to treat HIV, AIDS, diabetes, hepatitis C, and certain psychiatric conditions. As of January 2, 2024, Colorado, New Hampshire, Texas, and Vermont have applications in various stages of the approval process.


Per Dr. Robert Califf, FDA commissioner, the agency will perform a serious vetting of applications for public health protection. States will be required to provide importation details to ensure the drug’s potency, how the state’s program will prevent counterfeit products from entering the United States, and what drugs the state seeks to import. The Canadian seller who purchases the drug directly from the manufacturer must be identified. In addition, the proposal must demonstrate where and how significant cost savings for consumers would occur. US product labeling must be approved and put on the medications. The FDA will be monitoring the state for adherence to federal regulations, especially mandatory reporting of adverse drug events.

Certain drugs are excluded for importation.

  • Controlled substances (all)
  • Biological products including insulin
  • Infused or intravenously injected drugs
  • Inhaled drugs used during surgery
  • Any drugs assigned a REMS (risk evaluation and mitigation strategies)

PHSL assumes the focus of importation will be single-source brand drugs that are available in both the US and Canada in the same active ingredient, strength/concentration, route of administration, and dosage form. This would likely include oral maintenance therapies for chronic conditions that are frequently prescribed and dispensed to maximize the program impact. While there may be instances of multisource generic drugs that are less expensive in Canada, the general knowledge has been that US generics are competitive or less expensive at the pharmacy.

Even with FDA approval, importation is complex, with additional requirements for states who want to participate. After the 2020 ruling, Canada enacted a law to prevent manufacturers and wholesalers from exporting drugs which are in short supply. Some pharmaceutical companies have contractual arrangements with drug-shipping companies prohibiting deliveries to the US. Additional lawsuits are expected to be filed. PhRMA, Pharmaceutical Research and Manufacturers of America, has announced it will “consider all options” to prevent importation, including taking legal action.

Mandatory State Requirements for the FDA

  • What drugs does the state seek to import?
  • Who is the Canadian seller and does this Canadian seller purchase the drug directly from its manufacturer?
  • Who is the importer in the U.S. that would buy the drug directly from the foreign seller in Canada?
  • Who is the relabeler responsible for meeting U.S. labeling requirements?
  • Who is the qualifying lab that would conduct testing of the drug for authenticity and degradation?
  • How is the supply chain secured against counterfeit products? (remember, DSCSA is in place in the US and includes 2D barcode requirements)
  • SIP (Section 804 Importation Programs) would initially be authorized for 2-year periods with the possibility of 2-year extensions.
  • Post-importation requirements for each drug include:
    • Consumer cost savings reports
    • Adverse Event Reporting on Canadian products

Imported Prescription Operations and Billing

The importation ruling creates unanswered questions for pharmacies, regardless of location or type of pharmacy, in addition to PBMs (prescription benefit mangers), wholesalers, payers, and government agencies other than the FDA. Clarification is particularly needed around digital data requirements. The scope of potential system enhancements is unknown. Canadian imports will need to conform to current standards for electronic prescribing, product tracking, dispensing, labeling, and billing, or systems will need enhancements if the data is not in compliance with current US industry standards.

Examples of digital integrity issues may include:

  1. Are new NDCs (National Drug Code) assigned to imported products? (this was the case for varenicline during the shortage where the FDA permitted Canadian product to be sold in the US)
  2. Will the NDC be identified as an “imported repackaged NDC” by the compendia NDC databases?
  3. Will the FDA provide an electronic identifier that would flag imported products? If not, what data will be used to identify imported products in the electronic prescription ecosystem?
  4. Is the process for ADR reporting the same as domestic products?
  5. Will there be new pricing benchmarks?
  6. Will or how will CMS (Centers for Medicare and Medicaid Services) include imports in calculating NADAC (National Average Drug Acquisition Cost)?
  7. Can organizations “force” patients to use imported products or can a patient opt-out of using a Canadian product?

Other unresolved issues remain.

  1. How to calculate the FDA-required “consumer savings”
    • How will savings be passed to the consumer? Florida’s Medicaid program, government clinics, and state prisons are less like commercial and Medicare Part D plans where tiers and copays influence patient costs and options. This requirement to pass, document, and report savings to the consumers will become a more relevant requirement if imported drugs are allowed for commercial use in non-government owned pharmacies open to the public. If general use is permitted, the state will be required to calculate and report savings to the consumers.
  2. Industry guidance on product returns and reverse logistics processes including recalls.

Importation has periodically been proposed as a viable method of lowering drug costs going back to the early 2000s, but it remains to be proven if the obstacles can be overcome on both sides of the border. Will consumers actually see a reduction in prescription costs? More to come!


Posted January 26, 2024

Winter 2024 Newsletter:

Pharmacy Network Strategy

Pharmacy Network Strategy

As the pharmacy benefits management (PBM) industry has become increasingly consolidated, entering into a pharmacy network agreement becomes increasingly challenging for pharmacies, especially independent pharmacies that lack the volume of their large chain competitors. The top three PBMs – Caremark (CVS Health), Evernorth/Express Scripts (Cigna), and OptumRx (United Healthcare) control 79% of total prescription claims managed. The next top three PBMs – Humana Pharmacy Solutions, Prime Therapeutics/Magellan Rx, and MedImpact control 17% of total prescription claims managed. This leaves just 4% of the market share managed by all other independent PBMs (and cash pay).1 While challenging, there are still inroads to PBM networks, and this article discusses these considerations.

Approximately half of all states in the United States have some variation of Any Willing Provider (AWP) regulations for fully insured plan sponsors/payers. It is important to understand that AWP laws require fully insured/ managed care plans to accept any qualified provider who is willing to accept the terms and conditions of that pharmacy benefit plan. The pharmacy, particularly an independent or small chain with relatively low volumes, will typically not have the opportunity to negotiate more favorable terms and conditions or drug reimbursement levels.

PSAOs are the typical option for retail pharmacy PBM network inclusion; however, the contract terms can be disadvantageous from a reimbursement or preferred status standpoint. Specialty pharmacies are not typically included in PSAO-negotiated PBM arrangements.

One way to potentially tip the scale in a pharmacy’s favor is to differentiate as a specialty pharmacy, specifically if the pharmacy can focus on value-added clinical programs (e.g. utilization management, outcomes based, etc.). Hospital pharmacies that service the specialty prescription needs of outpatients of 340B covered entities may find it worthwhile to gain entry to PBM networks, instead of contracting this function out.

Entering Medicaid networks requires a state-by-state approach. Just because your pharmacy may contract with a PBM that services managed Medicaid or Fee-For-Service (FFS) Medicaid plans, your pharmacy will not automatically gain entry into these networks.

With so many considerations that can impact a pharmacy’s network strategy, it is helpful to start with a clear understanding of your pharmacy’s product and payer mix. With this in mind, the pharmacy is positioned to consider focusing their efforts on certain products and/or payers (e.g., commercial vs. government).

PHSL can serve as your resource, assisting with opportunity identification or helping to develop a specific network entry strategy.

1 Drug Channels, May 23, 2023.


Posted January 26, 2024

Winter 2024 Newsletter:

Florida Medication Import Approved by FDA

Get Ready: Medicare Model Guidelines Version 9 Are Coming

Medicare Part D coverage for prescription drugs is a federal program that is administered via private entities.  Each approved Medicare Part D plan must offer at least a standard level of coverage.  The list of covered drugs, or formulary, must include at least 2 drugs in the most commonly prescribed categories and classes.  United States Pharmacopeia (USP) works in concert with the Centers for Medicare and Medicaid Services (CMS) to provide and regularly update the specific set of drug categories and classes, known as the Medicare Model Guidelines (MMG).  This provides Medicare Part D plans one option to follow to determine the required covered classes to offer to Medicare beneficiaries.  Medicare Part D plan sponsors also have the option to create their own drug classification listing that must be approved by CMS prior to implementing.

The previous version of the drug categories and classes, called the Medicare Model Guidelines version 8 (MMG v8.0), was published in 2020.  USP released a draft of the updated version 9 document in June 2023.  The draft Medicare Model Guidelines version 9 (MMG v9.0) are intended for use September 15, 2023. The new version includes additions, changes, and removals that have been made to the guidelines.

Class Additions:

Version 9 saw several class additions, with one new class being “Calcitonin Gene-Related Peptide (CGRP) Receptor Antagonists,” which is under the “Antimigraine Agents” category. Under the category “Cardiovascular Agents,” USP added the classes “Mineralocorticoid Receptor Antagonist” and “Sodium-Glucose Co-Transporter 2 Inhibitors (SGLT2i).”  Assuming no changes when the final version is revealed, plans will be required to cover two drugs from each of these classes moving forward.

Along with the changes mentioned above, many new drugs have been FDA approved since the release of MMG v8.0. Twenty new FDA approved drugs were added into the class “Molecular Target Inhibitors.” This number of additions to an already highly populated class is unique, but due to the use in oncology, plans will likely not limit coverage for most of these drugs. Two of the new classes added in this version, “Mineralocorticoid Receptor Antagonist” and “Sodium-Glucose Co-Transporter 2 Inhibitors (SGLT2i)” only contain 3-4 example drugs.  Plans could seize this new opportunity to limit coverage to two drugs in each of the classes, generating competition for formulary position.

Some newly approved drugs have been placed into more general classes that are described as “Other.”  There is the possibility of USP adding additional classes to offer more specificity for these new drugs in the final guidelines.  If additional classes are added, certain drugs may benefit by being the only product or a pair of products in the class.  In this potential scenario, these drugs would likely gain broad coverage from Medicare Part D plans without offering the level of rebates found in highly competitive classes. In contrast, if these drugs remain in the general “Other” class, they may not gain coverage as broadly among Medicare Part D plans.

Class Changes:

The class known in version 8 as “Gamma-aminobutyric Acid (GABA) Augmenting Agents” had a verbiage change to “Gamma-aminobutyric Acid (GABA) Modulating Agents” for version 9. Changing these terms depicts the agents as having a controlling influence on GABA, which more closely fits the actions of the example drugs.

In draft version 9, two previous categories, “Hormonal Agents, Suppressant (Adrenal)” and “Hormonal Agents, Suppressant (Pituitary),” were combined by USP into one category named “Hormonal Agents, Suppressant (Adrenal or Pituitary).” This change would combine more drugs into a single category, allowing plans more discretion to make formulary coverage decisions.

Drug Recategorization:

Along with updating drug categories and classes, USP also adjusted the placement of certain drugs within the existing structure and are shared in the following table.

Medicare Model Guidelines Chart

Watch for the official final release of the Medicare Model Guidelines version 9 in September 2023.  These changes impact manufacturers and Medicare Part D plans regarding formulary coverage and competition.


Posted August 30, 2023

Fall 2023 Newsletter:

FDA Novel Drug Approval Trends

FDA Novel Drug Approval Trends

Prescription drugs must be approved by the United States Food and Drug Administration (FDA) before entering the market. Each year, the FDA’s Center for Drug Evaluation and Research (CDER) and Center for Biologics Evaluation and Research (CBER) approve a wide range of new drugs and biologics. These products can either be drugs that have never been used in clinical practice before or drugs that are similar to previously approved products. As of 8/25/2023, the FDA has approved 35 drugs. This is almost the same number of drugs approved in all of 2022!

Although it seems there is a recent increase in drug approvals this year compared to 2022, the current trend of 2023 is on par with the past five years, excluding 2022. The table below shows data from the past five years of novel drug approvals from the FDA.

FDA Approval Chart

There is not a clear reason why there were significantly fewer approvals in 2022. However, there is speculation that it has to do with 2021 controversies that led to a more stringent approval process. When a drug is rejected, the FDA does not publish the complete response letter (CRL) and leaves the disclosure of the FDA’s response up to the applicant. The FDA does not publish figures for rejected applications. Theoretically, the decrease in approvals in 2022 could be due to more drug application rejections than normal.

Even with fewer drug approvals in 2022, the percentage of drugs approved using an expedited development pathway is similar to previous years. The four main pathways to expedite a drug’s review and/or approval are as follows:

  • Fast Track – Facilitates the development and expedites the review for drugs treating serious conditions with an unmet medical need.
  • Breakthrough Therapy – FDA expedites the review process for drugs that demonstrate substantial improvements over available therapies.
  • Priority Review – FDA implements a goal to review and take action on the application within 6 months vs. 10 months for a standard review.
  • Accelerate Approval – Drug approvals serious conditions with an unmet medical need may be approved based on a surrogate endpoint.

The manufacturer of a single product may request review/approval via multiple pathways above. Until the complete counts are shared, it is difficult to assess the FDA approval trends based on these pathways.  With that being said, the products that have been approved do not focus on one disease state or area of practice. The drugs approved in 2023 treat a variety of diseases ranging from common diagnoses like migraines to rare diseases like Fabry disease. However, rare diseases are becoming a growing target for drug development.

How do you think these trends will continue or change over the next five years?


Posted August 30, 2023

Fall 2023 Newsletter:

Get Ready: Medicare Model Guidelines Version 9 Are Coming

Insulin Price Cuts – What’s Included and What’s Not

In March 2023, Lilly, Sanofi, and Novo Nordisk all announced that they will be lowering prices for several of their key insulin products.  To accomplish these price reductions, the three manufacturers have announced list price cuts ranging anywhere from 65% to 78%.  This news comes on the heels of the January 2023 introduction of the Inflation Reduction Act, which capped insulin out-of-pocket costs at $35 for Medicare beneficiaries.  This news also comes two years before the Medicare drug price negotiation program, which is slated to begin in 2026 and where insulins have the potential to be a drug included in negotiations. Another driving force for this change could be the American Rescue Plan Act of 2021, which removed the cap on rebates that manufacturers pay to Medicaid.  By proactively lowering prices now, insulin manufacturers may eliminate the risk of paying greater than 100% of AMP for Medicaid patients.

What Insulins are Included in the Price Cuts?

Based on a Novo Nordisk press release, “cutting the list price” seems to be equated with lowering the products’ Wholesale Acquisition Cost (WAC).  Using the publicly released price reduction percentages from each of the three manufacturers, PHSL predicts that the new WAC prices for key insulins will be as illustrated in the following table; however, PHSL notes that these newly anticipated WAC values are based on the current WAC values, and do not take into account any manufacturer price changes that could occur prior to the implementation.

Anticipated Insulin Costs

Who Decides Which Insulin Prices to Cut?

While there have been various legislative and policy changes driving this concept, as with all drugs, it is ultimately up to the individual manufacturer to decide how to price their products. The insulin products noted in PHSL’s table are those that have been publicly stated as having price reductions applied. The manufacturers included in this list may or may not choose to reduce prices of their other insulin products. Other manufacturers may choose to reduce prices of their insulin products in the future.

Out-Of-Pocket Costs

The Inflation Reduction Act had already capped insulin out-of-pocket costs at $35 for patients with Medicare.  However, in addition to reducing the list price of their insulin products, Lilly has also announced that they will cap insulin out-of-pocket costs for commercially insured patients at $35, when prescriptions are filled at participating retail pharmacies.  Sanofi has pledged to do the same for Lantus.  Since manufacturers cannot dictate how payers set their patient copay amounts, how this will be operationally implemented for commercially insured patients has not yet been determined.  PHSL suspects that manufacturers may use e-vouchers to accomplish this.

The Improving Needed Safeguards for Users of Lifesaving Insulin Now (INSULIN) Act of 2023 was recently introduced in the U.S. Senate on April 20, 2023.  If passed, the bill would require health plans to cap out-of-pocket insulin costs at $35 for commercially insured patients in 2024.  In 2025, out-of-pocket costs would be calculated as the lesser of $35 or 25% of the list price for a 30-day supply.  With the newly lowered list prices from Lilly, Sanofi, and Novo Nordisk, 25% of the list price would often fall below the $35 threshold.  The bill indicates that pricing would need to apply “for at least one insulin of each type,” but how an insulin type is defined (i.e., long acting vs. short acting, unique active ingredient, etc.) is unknown.

Price Cut Implications

With most of the price cuts going into effect in 2024, PHSL would expect that manufacturers reduce or eliminate rebates for these insulin products.  For payers who have a large population of patients with diabetes and who rely heavily on rebates, a decrease in rebate dollars should be planned for and expected in the 2024 plan year (although the decrease in rebates is likely to be at least partially offset by lower plan paid costs upfront).

From a patient perspective, those with high prescription deductibles will benefit the most.  Once deductibles are met, commercially insured patients likely have copays at or below $35 today, and copay cards are prevalent for the above-mentioned insulin products.  For uninsured patients, Lilly, Novo Nordisk, and Sanofi all offer patient assistance programs or savings programs.  Thus, PHSL does not expect that the new price changes will have a significant impact on patient costs, except for those with high deductibles.  What are your thoughts on the newly announced insulin price reductions?  How will the price decreases impact industry stakeholders?


Posted May 16, 2023

Spring 2023 Newsletter:

Cutting Through the Online Noise – Social Listening: What Is It and How Can Pharma Benefit?

Cutting Through the Online Noise – Social Listening: What Is It and How Can Pharma Benefit?

Have you been noticing the recent online chatter about weight loss drugs?  It is difficult to ignore!  That online chatter and the power of social media influencers have created unexpected market upheaval, including regional drug shortages and patients unable to secure their needed medication. Whether it is social media sites, apps, a favorite online influencer, or your trusted health site, someone is providing information, accurate or otherwise, or opinions about your product.

PHSL recently assisted a major pharmaceutical company in performing a robust dive to identify and monitor sites that present that manufacturer’s product information to healthcare professionals and consumers.  This is social monitoring. PHSL analyzed this information to determine why it was being presented to healthcare professionals and consumers. This is social listening. Monitoring is what is being said and where. Listening is analyzing to determine the why.

Social media has become an untapped wealth of information that should be monitored and analyzed.  It provides vital information, such as opinions and promotions of consumers online, which cannot be found in traditional data sources. Social listing can allow for the discovery of inaccurate, missing, and potentially dangerous product information in these sources.


Manufacturers can use social listening to better understand the opinions of their products, address any negative opinions, and stay ahead of the curve by being the first to recognize trends in the industry, which may drive unanticipated financial and regulatory issues.

It is common for people to consult social media whenever they are faced with a health issue. A recent study published in the Journal of Medical Internet Research looked at inflammatory bowel disease (IBD) social media posts; over 55% of the posts included in the study were related to medication advice, beliefs about safety of IBD medications, personal experiences with medication use, or fears or anxieties about the safety of IBD therapies.  Manufacturers who are aware of specific concerns would be able to set themselves apart by addressing such concerns.

Manufacturers who utilize social listening would also be able to understand and respond to some of the buzz surrounding their products.  Take metformin, for example; nearly all healthcare professionals think of diabetes whenever metformin is mentioned, yet there is intrigue coming from Americans consumers concerning off-label uses of the drug, none of which have anything to do with diabetes.  This interest is fueled by information shared on Tik-Tok, Instagram, and health-focused blogs. Social media influence has created an enormous demand for drugs that are commonly used for the treatment of diabetes or obesity, in an effort to lose weight. Hashtags of various drug names have blown up on social media. One drug hashtag has over 600 million views and counting.

FDA and Social Media

Did you know even the FDA performs widespread social monitoring and listening?  One way the FDA is harnessing the power of social listening is to monitor and track drugs of concern.  Paula Rausch, the Associate Director of Research and Risk Communications in CDER’s Office of Communications, says the “CDER has begun to use nontraditional sources to explore the social contexts in which substances are being used, as well as to identify potential drugs of concern that may be emerging. These data can provide clues about the dynamics of use, misuse, and abuse, and potentially identify changing patterns.”  The FDA is currently monitoring more than 95 million online and social media sites.

More information on the FDA’s process can be found here.  FDA has issued guidance on social media content and a summary can be found here.

Pharmaceutical Social Monitoring and Listening

Actionable market insights are expanded through the inclusion of social monitoring analytics. Evaluation of current and future marketing strategies should incorporate the potential market dynamics of social media. Product information presented on professional, industry, and consumer-driven sites may have an effect on production and product availability planning. Off-label claims and other regulatory or legal issues may be identified as having the potential to skew current market analysis.

What exactly is the role of social listening in the pharmaceutical industry?  It seems prudent for a manufacturer to identify and monitor high-priority web sites that may publish incorrect or incomplete information about their product, especially as the FDA is also monitoring these sites.  This is important so that healthcare professionals and patients have access to the most complete and accurate product information. The results of a social listening analysis provide manufacturers with the knowledge to understand the opinions, both positive and negative, around their products on professional and patient healthcare locations.

Getting Started

The exponential growth of social media, relevant websites, and healthcare apps will only continue. Social listening can uncover invaluable information, but it is often difficult to know where to start and what to do with the findings. The different types of information retrieved must be efficiently and accurately categorized into insightful information, which can be analyzed to ultimately create the greatest benefit.  PHSL can assist in the identification and selection of online listening sites in alignment with your company’s strategy, followed by the analysis and recommendations for mitigation if necessary. Trend analysis can be performed over time for newly launched products, high-priority, or high-risk products. PHSL can focus on disease-specific or professional practice sites.

PHSL has experience helping manufacturers engage in social listening and providing strategic recommendations based on our findings.  Let us know if we can help!


Posted May 16, 2023

Spring 2023 Newsletter:

Insulin Price Cuts – What’s Included and What’s Not

2023 Formulary Exclusions Lists: A Review of Express Scripts, CVS Caremark, and OptumRx

It’s back…PHSL’s annual review of the big 3 PBM formulary exclusion list updates! Express Scripts (ESI), CVS Caremark, and OptumRx published their formulary exclusions for January 2023. Based on PHSL’s review, OptumRx leads the way with over 77 new formulary exclusions. ESI added 36 new exclusions, while CVS Caremark only excluded an additional 26 drugs. Although CVS Caremark excluded nearly 30 new drugs, they anticipate that 99.72% of their clients will not be impacted by any medication changes because of these formulary removals. The January 2023 exclusions, as researched by PHSL, are as follows:

ESI 2023 Formulary Exclusions

CVS Caremark 2023 Formulary Exclusions

OptumRx 2023 Formulary Exclusions

During the review, PHSL made the following observations:

  • ESI focused more attention on anticonvulsant agents. Examples of exclusions in this category include Banzel, Onfi, Klonopin, and Vimpat.
  • CVS Caremark’s focus was on chemotherapy agents, such as Rubraca, Sutent, and Alimta.
  • OptumRx focused on autonomic and central nervous system agents. Specific agents excluded by OptumRx are Daytrana, Ponvory, and Quillichew ER.
  • All three PBMs excluded numerous respiratory products. CVS Caremark excluded Flovent Diskus, instead preferring Flovent HFA or Pulmicort Flexhaler. OptumRx excluded generic fluticasone-salmeterol products in favor of Advair Diskus, likely due to rebates.  OptumRx also excluded Dulera, Incruse Ellipta, Tudorza, Bevespi, and QVAR Redihaler.  Like OptumRx, ESI excluded Incruse Ellipta and Tudorza Pressair in favor of Spiriva.  Although many of these changes are likely rebate driven, from a clinical perspective, the Global Initiative for Asthma (GINA) guidelines were also updated in 2022 and now seem to generally prefer the combination of formoterol paired with an inhaled corticosteroid when an inhaled corticosteroid is prescribed.
  • Both OptumRx and ESI excluded the Glucagen Hypokit for 2023, while the product was already excluded by CVS Caremark in 2022.The Glucagon Emergency Kit manufactured by Eli Lilly is the preferred alternative for each of these PBMs. ESI specifically notes that the Fresenius brand of the Glucagon Emergency Kit is also excluded, with only the Eli Lilly Glucagon Emergency Kit being a preferred alternative.
  • As CVS Caremark did in 2022, ESI greatly restricted coverage of diabetic supplies and needles. Any insulin needle or syringe that is not BD Diabetes brand is excluded by ESI in 2023. PHSL suspects that this change is largely rebate driven.
  • OptumRx still requires prior authorization for Hepatitis C, Multiple Sclerosis, and Immunomodulator treatments. In 2022, OptumRx changed many of their preferred agents by replacing Simponi Aria and Renflexis with Avsola as a preferred immunomodulator. Kesimpta and dimethyl fumarate DR replaced Tecfidera for multiple sclerosis preferred treatments. There was no change in preferred Hepatitis C medications. For 2023, no additional changes are expected.
  • CVS Caremark excluded brand Narcan after previously covering the opioid reversal agent. Although no alternative agent was listed, PHSL suspects that the change is due to the introduction of numerous generic agents.
  • As mentioned in our 2022 Exclusion List Review, ESI continues to use indication-based management for the “inflammatory conditions” drug class. There are no additional excluded medications this year.

Each of the major PBMs have taken a different approach to managing drug expenditure in 2023, with formulary exclusions continuing to play a significant role. PBMs exclude products because of clinical, financial, and humanistic reasons. Each PBM makes value judgements and determines what coverage is no longer warranted. This article represents PHSL’s analysis of publicly available information regarding the three PBM’s formulary exclusion for 2023. Readers are encouraged to assess the lists for themselves, using the formulary and exclusion list source information provided in the links below.


Posted January 11, 2023

Winter 2023 Newsletter:

Dispenser Track and Trace: Applicability to Patients

Dispenser Track and Trace: Applicability to Patients

The Drug Supply Chain Security Act, also known as the Track-and-Trace Law, has been a topic of discussion for almost a decade. The FDA announced their 10-year plan in November of 2013 with the goal that each drug product would be traceable from the moment it was manufactured to the moment it was dispensed to the patient. The end of this 10-year roll out is in sight. The FDA set a compliance deadline of November 27, 2023, with pharmacies being the last stop in this journey.

The FDA implemented multiple staged deadlines throughout the past 10 years, with the first step in 2017 being manufacturers’ development of a 2D barcode that records the product NDC, serial number, lot number, and expiration date. Since then, repackers, wholesalers, and pharmacies have adapted their systems and workflow to comply with the new 2D barcode and tracking regulations. The goal is to directly identify recalled or suspect products and those who directly handled and received them.

The focus is now on the dispenser, i.e., pharmacy or healthcare facility. Review of the regulations is generating discussion around patient level tracking and potential best practices. Currently, the FDA only requires pharmacists to:

  1. Confirm that the entities you do business with are licensed and registered.
  2. Receive, store, and provide transaction history, transaction information, and transactions statements (3Ts). The 3Ts must be stored for at least 6 years. When dispensing to another entity instead of to an individual patient, such as dispensing to an ambulance service, the 3Ts must be provided to first responders or the other pharmacy. If a pharmacy transfers a product to another pharmacy that is not for a specific patient, the pharmacy may need to register as a wholesaler in the future.
  3. Investigate and handle any suspect or illegitimate products.
  4. In the event of a recall, upon request by the FDA or other appropriate Federal or State official, the pharmacy must provide the 3Ts for that product within two business days.

Each of these requirements are not cut and dried. Pharmacies must upgrade their software and modify their workflow to meet these standards. In addition, new guidance has been published by the FDA exempting certain products from this Act, including naloxone and some COVID-19 treatment and prevention products.

Many large chain pharmacies and hospital networks already have barcode scanning and inventory systems implemented into their workflow, but some of these systems only work with linear barcodes. Third-party tech companies have jumped into action offering new technology to fill this need. For large companies, the financial commitment is understood, but for small independent pharmacies, the financial burden of meeting these requirements could be substantial.

The DSCSA 10-year plan ends with the dispenser, but industry leaders question the process being implemented by certain pharmacies. The purpose of this law is to improve the safety of the patient, so why not extend this practice to the patient level? Extending to the patient level comes with numerous benefits, but also many concerns. In terms of patient safety, those affected by a recall or illegitimate product could be directly identified and notified sooner, avoiding the need for a patient to make a trip into the pharmacy or an unnecessary phone call. This allows the pharmacist to focus on the patients truly at risk.  Patients not at risk could still be a part of the notification for peace of mind, removing any patient uncertainty. If the tracing system is automated, time pharmacy personnel previously spent checking the shelves for recalled products would be alleviated. That time can be focused on other areas of demand, like point-of-care testing.

So, how would pharmacies extend this to the patient level? Pharmacy leaders first need to ensure that their technology and software can scan 2D barcodes and link the product information to a patient profile. Ideally, the system would be able to generate a report listing each patient that received a certain NDC, lot #, and expiration date. In the pharmacy workflow, pharmacy personnel would queue a prescription to be dispensed and added to a patient profile, scan the 2D barcode, and fill the prescription just as they do now. All the changes would occur behind the computer screen. The software would generate an inventory of all products received and the 3Ts for each product. Hypothetically, if a recall is issued, the system would identify if the pharmacy even received the product and then determine who the pharmacy dispensed the product to and generate a report. The next question is how does the pharmacy notify the affected patients? Just as many systems now notify the patient via phone call, text message, or email that their prescription is ready for pick-up, the pharmacy systems would do the same with recall information.

This idea sounds great in theory, but the costs required to develop, test, and implement new software may be prohibitive.  Additional resources would also be needed to retrain employees. The accuracy of the information within a patient profile is a key component, since this would be how the patient is notified. It would be vital for pharmacy leaders to discuss and formulate a plan before extending to the patient level.

The Drug Supply Chain Security Act has reshaped the pharmacy industry to ensure patient safety. Pharmacy leaders have overcome many challenges throughout this journey, but a lot of work is still needed to meet the November 27, 2023 deadline and before pharmacies can implement tracking at the patient level. The FDA has yet to budge on the November 2023 deadline, so PHSL encourages organizations to talk with their software vendors or IT support to ensure necessary steps are being taken to meet the requirements before this deadline. PHSL also encourages pharmacy personnel to be prepared to demonstrate their ability to access the 3Ts data upon an FDA or Board of Pharmacy inspection.

PHSL has written about Track-and-Trace since President Obama signed this Act in 2013. Please see the below publications for more information:


Posted January 11, 2023

Winter 2023 Newsletter:

2023 Formulary Exclusions Lists: A Review of Express Scripts, CVS Caremark, and OptumRx