Rising Drug Costs Could Increase Exclusion Lists

Recent analysis finds that increasing drug prices in the United States could lead to payers and pharmacy benefit managers (PBMs) further reducing the amount of drugs eligible for reimbursement. Researchers believe this could challenge drug manufacturers to establish more concrete support of clinical superiority and cost-effectiveness for their drugs.

"Payers are responding to rising drug costs with new, more restrictive formulary management policies," said Joshua Cohen, PhD, associate professor at Tufts Center for the Study of Drug Development. "With prescription drug spending in the US having grown more than 8.5% in 2015, and projected to continue rising, PBMs are likely to expand their exclusion lists."

According to the analysis from the Tufts Center for the Study of Drug Development, PBMs and payers will respond to rising costs by increasing traditional approaches to formulary management, such as tiered formularies, prior authorization, step therapy, and off- and on-label indication restrictions.

Exclusion lists contain drugs that will not be reimbursable, but offer an alternative covered drug. Drugs that offer no additional benefit over alternative treatments are said to be excluded.

Researchers found that 2 of the largest PBMs in the United States increased their exclusion lists by approximately 65% from 2014 to 2016.

Rebates from drug manufacturers play a significant role in PBM exclusion decisions, as do coupons or copay offset provisions offered to patients by manufacturers.

Researchers interestingly found that cost-effectiveness does not seem to correlate with whether or not a drug is covered, while more cost-effective drugs are not always recommended over other less cost-effective drugs in the same class.