A peer reviewed paper published in Health Science Journal from the Global Healthy Living Foundation evaluating the 2022 national formulary of the second-largest PBM in the US found that nearly half (46%) of their 563 exclusions had questionable clinical or financial benefits to patients, meaning that prescribers are forced to select treatments that may have adverse financial or medical outcomes for their patients. The study also found that in some cases, the exclusions violate the core principle of a “formulary,” where lower-priced generics, authorized generics, or biosimilar should be preferred over equivalent brand name medicines.
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“The original intent of formularies was to incentivize the use of the least costly medication that was also safe and effective for a particular medical condition. However, the consolidations of PBMs and their subsequent purchase by large health insurance companies allows three major companies to collectively process more than 75 percent of prescriptions and what we now have is warped system driven by profits that stem from rebates coordinated in secret negotiations between PBMs, payers, and drug manufacturers,” said Dr. Robert Popovian, Pharm.D., MS, Chief Science Policy Officer at the Global Healthy Living Foundation, Senior Health Policy Fellow at the Progressive Policy Institute and Visiting Health Policy Fellow at the Pioneer Institute and lead author of the study. “Excluding a drug means that the insurer will not cover any portion of the cost and the patient must cover the full cost, which presents an insurmountable financial barrier for many patients.”
Exclusions Based on Contracts Not Patient Outcomes
The study evaluated the Express Scripts (ESI) 2022 National Preferred formulary as ESI provides a publicly available national preferred formulary exclusion list annually. For each of the 563 exclusions, the research team categorized the therapeutic into one of three categories. An equivalent substitution (68.6%) meant a brand, generic or biosimilar medicine is excluded in favor of a preferred brand, generic or biosimilar medication containing the same active ingredient. A therapeutic substitution (29.8%) excluded a brand, biosimilar, or generic medicine in favor of another brand or generic drug that does not contain the same active ingredient, and a complete exclusion (1.6%) meant that a therapeutic was excluded with no recommended alternative. The study found that all of the therapeutic substitutions were of questionable medical benefit because the excluded formulation is not the same as the alternatives covered by the PBM.