Drug-Plan Managers Wield ‘Potent Weapon’

via Wall Street Journal

CVS Health this week said it was removing a total of 26 drugs from its standard formulary for 2016, including Pfizer’s Viagra.

CVS Health Corp.’s decision to stop covering Pfizer Inc.’s anti-impotence pill Viagra for many of its drug-benefit plan members is the latest example of the tough tactics some health-care managers are using to control rising drug costs.

CVS and rival Express Scripts Holding Co., which together dominate the U.S. market for administering drug-benefit plans for employers and insurers, are excluding more drugs from coverage if there are viable alternatives in attempts to squeeze greater price discounts from manufacturers. The pharmacy-benefit managers, or PBMs, are steering patients to other drugs they say have equivalent safety and efficacy, but at lower costs.

A CVS spokeswoman declined to comment on the reasons for Viagra’s exclusion. She said the strategy of excluding drugs has resulted in “significant savings” for employers and other sponsors of benefit plans. The spokeswoman said “equally effective products with lower overall costs remain available within the formulary” as alternatives to excluded drugs..

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About thebenefitblog

Eric is a Producer at Lockton Insurance Brokers, Inc., the world’s largest privately held commercial broker. Eric has over 23 years of experience in the insurance industry and has spent the last 11 years with Lockton. Eric specializes in Health & Welfare Benefits, Retirement Planning, and Executive Benefits. Eric's clients utilize his expertise in the areas of Plan Due Diligence, Transaction Structure, Fiduciary Oversight, Investment Design, Compliance and Vendor negotiation to improve the operational & financial outcome for each client. The Benefit Blog is a place to share that expertise and industry news.
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