CVS shucking more drugs from its coverage list
Beginning in January, the list of drugs CVS Caremark's ($CVS) pharmacy-benefit business will refuse to cover will grow to about 50.
The company is adding 17 drugs to nearly three dozen it already blacklisted, The Wall Street Journal reports. They include Abbott Laboratories' ($ABT) testosterone treatment AndroGel, Allergan's ($AGN) glaucoma drug Lumigan, Pfizer's ($PFE) human growth hormone Genotropin and Bristol-Myers Squibb ($BMY) and AstraZeneca's ($AZN) diabetes drug Onglyza.
The company put the kibosh on coverage of 34 drugs this year, mostly on those for which companies offer co-pay coupons to entice consumers to stick with higher-priced branded drugs instead of moving to generics. Others included drugs it didn't get the discounts on from companies that it wanted. It is reinstating some of the drugs it blocked this year.
Abbott and Pfizer told the newspaper that they were unconcerned about the move, but the CVS pharmacy-benefits business has clout because it manages the drug plans for corporations and health plans. Only Express Scripts Holding Co. ($ESRX) has more clients. There are no blockbusters on the list, but there are some that bring in hundreds of millions of dollars a year, the newspaper said.
The entire pharmacy-benefits management industry has been looking for ways to fight drug company coupons, which give consumers a break on their co-pay but allow the companies to collect the full, higher margin on their drugs. A study sponsored by the industry estimated that co-pay discounts would boost drug spending by $32 billion over 10 years. Some health plans even sued drugmakers, suggesting that co-pay coupons are essentially bribes.
CVS said in a statement that consumers still have plenty of satisfactory drug choices. "For those drugs that are removed, equally effective products with lower overall costs, including many generics, remain available on the formulary."
- read The Wall Street Journal story (sub. req.)