The Big Three PBMs’ 2023 Formulary Exclusions: Observations on Insulin, Humira, and Biosimilars
Author: Adam J. Fein, PhD
For 2023, the three largest pharmacy benefit managers (PBMs)—Caremark (CVS Health), Express Scripts (Cigna), and OptumRx (United Health Group)—have again increased the number of drugs they exclude from their standard formularies.
Each exclusion list now contains about 600 products. Growth in the number of excluded drugs slowed for the second year, due partly to the fact that so many drugs have already been dropped from PBMs’ formularies.
Below, I highlight four takeaways from this year’s lists, including a look at biosimilar insulin and the forthcoming biosimilar competition for Humira. I also note some troubling research on the patient impact of exclusions—although much remains unknown.
As always, I welcome your comments below or on social media.
Formulary exclusions have emerged as a powerful tool for PBMs to gain additional negotiating leverage against manufacturers. The prospect of exclusion leads manufacturers to offer deeper rebates to avoid being cut from the formulary. Exclusions are one of the key factors behind the large gap between list and net prices for brand-name drugs. (See Brand-Name Drug Prices Fell for the Fifth Consecutive Year—And Plummeted After Adjusting for Inflation.) They can also affect a patient’s out-of-pocket costs and access to a particular therapy.
Formulary exclusions block access to specific products on a PBM’s recommended national formulary. These are suggestions, not mandates. Thus, a drug’s appearance on an exclusion list does not guarantee that all patients will lose access. Plan sponsors—the PBM's clients—can choose not to adopt their PBM’s standard formulary. However, they would then face reduced rebates and/or higher plan costs.
Here are the 2023 formulary updates for commercial clients of the three largest PBMs:
CVS Caremark: Formulary Drug Removals (January 2023) and Advanced Control Specialty Formulary (January 2023)a>
Express Scripts: 2023 National Preferred Formulary (NPF) Exclusion (12/15/22)
OptumRx: 2022 Premium Standard Formulary and Jan. 1, 2023 Premium Formulary Exclusions
These links are current as of this article’s publication date. However, the lists can change during the benefit year, so the links and product lists may change.
PBMs target both traditional and specialty products for formulary exclusion. The excluded products typically fall into one or more of the following categories:
Brand-name products with generic equivalents or therapeutic alternatives
Biosimilars and reference biologics with biosimilar alternatives
Non-preferred (tier 3) drugs with very low utilization
Heavily promoted drugs in therapeutic classes with multiple generic alternatives
Medicines treating chronic conditions
These criteria have led many single-source, brand-name drugs—those without a generic equivalent or biosimilar alternative—to be excluded from one or more of the PBMs’ formularies. From 2014 through 2022, a total of 1,357 unique medications faced exclusion for at least one year from one PBM. Of this total, 654 (48%) were single-source, brand-name drugs. (See Xcenda’s excellent Skyrocketing growth in PBM formulary exclusions continues to raise concerns about patient access.)
WELCOME TO 2023
Here are five takeaways from the 2023 exclusions.
1. Exclusions continue to expand.
The practice of formulary exclusion began in 2012. Since then, the number of unique products excluded from the formularies of the three largest PBMs—Caremark (CVS Health), Express Scripts (Cigna), and OptumRx (UnitedHealth Group)—has grown dramatically. The chart below tracks the growth at each company. As you can see, the rate of growth has slowed in the past two years, due partly to the large number of products that have already been dropped. The growth in excluded products shows how competitive many therapy categories have become—and the undisclosed but presumably significant rebates generated by these products.
We counted the number of unique products on each company’s 2023 list. (We counted multiple formulations of a drug as a single exclusion.) Here’s what we found:
The CVS Caremark list increased to an estimated 598 products.
Express Scripts expanded its exclusion list to an estimated 623 products.
OptumRx increased its exclusion list to an estimated 615 products.
Note that the 2023 figures and growth rates may not correlate perfectly with growth from the 2022 figures, due to mid-year formulary changes. The PBMs sometimes—but not always—exclude many of the same medications.
2. Exclusions continue to slow biosimilar insulin adoption rates.
Exclusions are a key factor driving gross-to-net differences for all insulin products. Xcenda found that one in five single-source formulary exclusions from 2014 to 2022 has been for diabetes treatments. (source) Consider rapid-acting insulins. Consistent with previous year’s lists, Express Scripts and OptumRx are aligned with Eli Lilly’s Humalog and Humulin, but exclude Novo Nordisk’s NovoLog and Novolin. By contrast, CVS Health’s formulary excludes Lilly’s insulins in favor of Novo Nordisk’s products. No major formulary prefers the low list-price versions of the branded products. The strange tale of long-acting insulin biosimilars illustrates why biosimilar adoption will remain challenging in U.S. commercial markets—even as net, post-rebate costs for the category decline. As I discussed during last month’s Drug Channels Outlook 2023 webinar, many commercial payers are not adopting the interchangeable biosimilars of Lantus, Sanofi’s long-acting insulin product. (For background, see Why PBMs and Payers Are Embracing Insulin Biosimilars with Higher Prices—And What That Means for Humira.) As a reminder, Viatris has launched two identical versions of its interchangeable biosimilar for Lantus:
Semglee (insulin glargine-yfgn) injection, a branded interchangeable product with a high list price
Insulin Glargine (insulin glargine-yfgn) injection, an unbranded, authorized interchangeable biosimilar with a low list price
As of October 2022, only 19% of new-to-brand commercial prescriptions were for the unbranded interchangeable biosimilar, while 29% were for the high-list/high-rebate branded version. A majority of new-to-brand commercial prescriptions remained with the branded Lantus product. Consequently, Lantus retained nearly 80% of total prescriptions. Presumably, Sanofi’s rebating practices have slowed biosimilar adoption.
The big three PBMs’ formularies have quite different strategies for this category:
CVS Caremark prefers Basaglar, a non-interchangeable follow-on biologic, and blocks Lantus. Neither Semglee nor its unbranded version is listed on the Caremark formulary.
Express Scripts prefers the high-list price Semglee and excludes both Lantus and the low-priced, unbranded interchangeable biosimilar.
OptumRx prefers the Lantus reference product and excludes Semglee and the unbranded biosimilar.
Two months ago, the U.S. Food and Drug Administration (FDA) approved Lilly’s Rezvoglar (insulin glargine-aglr), the second interchangeable biosimilar for Lantus. None of the PBMs’ formularies even bother to mention this product. Hmm.
3. Provider-administered biosimilar exclusions remain baffling.
PBMs’ management of provider-administered biosimilars on their pharmacy benefit formularies shows further complexities. The PBMs’ pharmacy benefit formularies vary significantly among payers and products. These strategies limit distribution channel incentives and provider choices. Adoption of provider-administered biosimilars has soared. Check out Amgen’s excellent 2022 Biosimilars Trend Report. These products are marketed as brand alternatives rather than as interchangeable generics. Each branded biosimilar therefore establishes its own position on the formularies of commercial third-party payers, which often favor one biosimilar over another. These products are typically reimbursed under the medical (not pharmacy) benefit, so PBMs play a limited role in managing these categories. However, the growth of white bagging has increased the importance of PBM formularies—and PBMs’ specialty pharmacies—for provider-administered drugs, per White Bagging Update 2022: Hospitals Battle to Boost Buy-and-Bill. Manufacturers of the reference products have pursued one of two general strategies:
Defend their unit market share by offering rebates and discounts to payers and providers, or
Lose substantial share to lower-priced biosimilar products
These approaches are reflected in the PBMs’ 2023 coverage decisions, which echo their 2022 formularies. Consider Remicade (infliximab) and its biosimilars. For 2023, the Express Scripts NPF prefers the Inflectra biosimilar, and excludes Remicade, the unbranded (and lower priced) infliximab, and two biosimilars (Avsola and Renflexis). OptumRx prefers Avsola and Inflectra, but excludes Remicade, Renflexis, and unbranded infliximab. Or consider Avastin and its biosimilars. CVS Caremark and Express Scripts both exclude the reference product and prefer Zirabev. Meanwhile, OptumRx’s formulary doesn’t even mention the category. Over the past few years, medical benefit plans have begun to alter their strategies to favor biosimilars and remove restrictions on provider choices. This is giving prescribers more flexibility in product selection and increasing channel profits. See How the Biosimilar Boom Boosts Drug Wholesalers’ Profits .
4. PBMs’ 2023 formularies are positioned for Humira biosimilars—but adoption rates are still uncertain.
This year, Humira will face at least eight biosimilar competitors—some of which will be fully interchangeable with Humira. There will also differences in concentration and formulation. As we noted last year, PBMs’ formulary exclusions are ready for these launches. For instance, Express Scripts and CVS Caremark both use an indication-specific formulary for the inflammatory conditions drug class. They each list preferred and excluded options by condition. At Express Scripts, Simponi and Xeljanz are preferred for the ulcerative colitis indication—but only after patients step through Humira. At CVS Caremark, Stelara, Rinvoq (a 2023 addition), Xeljanz, and Zeposia are preferred only after patients step through Humira. Humira’s position as first-line treatment reflects both AbbVie’s formulary negotiations as well as the PBMs’ positioning for the 2023 launches. As far as I can tell, OptumRx’s formulary doesn’t distinguish products and conditions. However, OptumRx’s Premium Standard formulary shifted Humira’s branded competitor Enbrel from Tier 3 in 2022 to Tier 2 in 2023. The Semglee story reminds us just how weird 2023 and 2024 could become. Both Express Scripts and OptumRx have announced that multiple Humira biosimilars will be placed at parity with the reference product. Will this lack of favoritism drive adoption—or will physicians and patients stick with the original? When I covered Humira during last month’s Drug Channels Outlook 2023 webinar, I speculated on the novel pricing and contracting strategies that will drive PBM formularies and payer adoption rates. Will biosimilars launch with list prices that are comparable to or slightly lower than the reference product’s list price? Or will one or more companies launch with a deep list price discount?
UNDERSTANDING THE PATIENT IMPACT
I want to reiterate a point that I made last year: These formularies have important real-world consequences for patients.
An individual patient’s access to a particular therapy and out-of-pocket costs is determined by formulary exclusions established by their plan’s PBM. Patients who change plans (or employers) can unknowingly lose access to their physician’s preferred therapy—unless they file a successful appeal. Exclusion lists also impact patients’ out-of-pocket costs, especially when low list price products are excluded in favor of equivalent products with higher prices.
Exclusions also raise the prospect of non-medical switching—altering a patient’s drug therapy for reasons other than a drug’s efficacy, side effects, or clinical outcome.
CVS has stated that only 0.28% of its members will be affected by its 2023 exclusions, which is slightly lower than the 2022 figures. Express Scripts has stopped reporting the share of its members affected by exclusions. Unfortunately, that non-reporting is consistent with its drift toward reduced transparency, as evidenced by the termination of its long-running and valuable annual drug trend reports. (For the first time in at least 15 years, Express Scripts did not release an annual drug trend report in 2022.)
The ever-growing presence of exclusions—and differences between PBMs’ lists—raises important but rarely studied issues about patient care. One exception: Analysis of Drug Formulary Exclusions from the Patient's Perspective. According to this review of Express Scripts’ 2022 formulary, almost half of the exclusions “had questionable clinical or financial benefits to patients, requiring prescribers to choose treatments that may have adverse financial or medical outcomes for their patients.” Yikes!
I hope that 2023 brings additional research on how exclusions affect physicians’ prescribing decisions, patients’ ability to access therapies, and clinical outcomes.