CVS Health bars Valeant, Concordia drugs for 'egregious' price hikes, and it's on the lookout for more

Note to price-hiking drugmakers: CVS Health is targeting you.

The pharmacy benefits manager slapped aside 35 more drugs in its aggressive 2017 formulary, bringing its list of barred meds to 131. Almost one-third of those additions are meds whose prices went up dramatically in recent months.

And CVS Health ($CVS) isn’t stopping with those deletions. It plans to revisit its coverage list quarterly, on a sharp lookout for meds “with egregious cost inflation.” If those drugs with big price hikes have effective, appropriate and less costly alternatives, they’ll be cut off.

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The 10 “hyperinflationary drugs” knocked off the formulary this time include products from serial price-hike offender Valeant Pharmaceuticals ($VRX) and its fellow Canadian drugmaker, Concordia Healthcare ($CXRX), which has also come under fire for large price hikes.

“CVS Health is taking a stand against egregious drug price increases that unnecessarily add costs for clients and their members,” the PBM said.

CVS targeted drugs whose prices had increased by more than 200% over three years, EVP Jonathan Roberts said during the company’s Q2 earnings call with analysts.

CVS pushed off Valeant’s Zegerid, a heartburn drug acquired along with Salix Pharmaceuticals, and DexPak, which is the steroid drug dexamethasone in taper-off dosage packaging. Zegerid combines the generic ingredient omeprazole with sodium bicarbonate--otherwise known as baking soda--and dexamethasone is available as a generic.

Concordia saw two drugs nixed from the CVS list: Its Nilandron treatment for prostate cancer, which it acquired in its $3.5 billion deal for Amdipharm Mercury last year; and Dutoprol, a combination med for high blood pressure.

Meanwhile, Novum Pharma had three drugs kicked off the formulary, including Alcortin External Gel, a dermatology drug that CVS called out specifically in its announcement. The price of that treatment went up by more than 2,800% over the past three years, CVS said. That’s an increase of almost thirty-fold.

The two other Novum drugs considered “hyperinflationary” were Novacort, which treats infectious dermatoses; and Aloquin, another infectious dermatoses treatment that Novum is promoting with a “$0 copay” assistance program.

CVS took a range of other steps that one analyst called “audacious.” It kicked off branded meds to replace them with their biosimilars--namely Amgen’s ($AMGN) Neupogen, which lost out to Novartis’ ($NVS) Zarxio biosim, and Sanofi’s ($SNY) Lantus, which will be replaced by the Eli Lilly ($LLY) and Boehringer Ingelheim knockoff set to launch in the U.S. in December.

It also nixed a couple of blockbuster cancer drugs--Novartis’ Tasigna, a follow-up to the Swiss drugmaker’s Gleevec, which faces some limited generic competition; and Medivation’s ($MDVN) Xtandi, with no such equivalent. And it edged off two rare disease drugs, including Actelion’s Opsumit, the intended follow-up to that company’s pulmonary arterial hypertension remedy Tracleer.

- see the CVS Health exclusions

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