During a yearslong examination of drug prices, there’s been no shortage of criticism for growing list prices, and in recent months, some companies have heard the talk and lowered their prices. Now, top PBM Express Scripts is rolling out a new formulary to help support the moves—and the plan could heap more pressure on players in competitive drug classes.
Express Scripts’ National Preferred Flex Formulary will be available Jan. 1 and is designed to allow the implementation of lower list prices without disrupting the supply chain that counts on rebates and discounts. For instance, if a drug company launches a lower-cost alternative to one of its brands, Express Scripts will add the new option to its Flex formulary and then exclude the innovator and potentially other competing drugs in the class.
The new formulary allows the PBM giant to assist drugmakers with lowering list prices “in a way that will not destabilize the drug supply chain," Express Scripts chief medical officer Steve Miller said in a statement. The company noted that immediate list price reductions can disrupt plans that have designed their benefits for future years “based on existing economics.”
In recent years, list prices have climbed significantly, as have the rebates that drugmakers serve up for favorable formulary placement. The growing "gross-to-net" bubble has made it tougher for patients to afford their drugs because they pay costs based off of list prices.
Express Scripts' move follows Gilead’s unprecedented decision in September to roll out generics to its own hep C drugs Harvoni and Epclusa amid intense competition in the field. The authorized generics carry list prices of $24,000 per course, compared with Epclusa's $74,760 sticker price and Harvoni's $94,500. Gilead's authorized generics will be the first discounted products available on its new formulary, Express Scripts said.
After Gilead’s decision to reduce list prices, Express Scripts praised the move and and took partial credit, saying it suggested such an approach in its response to the Trump administration’s drug pricing blueprint, released in May.
All of the developments come as Congress and the administration continue to scrutinize pharmaceutical pricing, resulting in several cost-saving initiatives and proposals under consideration. After the midterms, industry watchers expect continued interest in the field.
Gilead hasn't been the only company to lower list prices in recent months. Amgen recently cut the price of its PCSK9 drug Repatha by 60%, even after demonstrating the drug’s real-world benefits in an outcomes study. Amgen executives said the move is aimed at allowing patients to better afford their share of the costs.
Sanofi and Regeneron, for their part, market rival PCSK9 drug Praluent and have slashed the medication’s net price to a similar level without touching its list price. Praluent remains the preferred option on Express Scripts’ main formulary through 2019, but Miller told Reuters Amgen’s discounted option could secure a winning position on the new formulary.