Wednesday, September 19, 2018

Experts Are Split on CVS's New Approach to Manage Specialty Drugs



At the time of year when PBMs are rolling out their 2019 strategies, CVS Health has unveiled a bold new approach to managing certain specialty drugs based on data from the Institute for Clinical and Economic Review (ICER). However, industry experts are divided on how much of an impact it truly will have on drug prices.

In a white paper out last month, CVS revealed that it's starting a program focused on bringing down launch prices of pricey me-too drugs. The approach allows clients to exclude those medications that come onto the market with a price more than $100,000 per quality-adjusted life year (QALY) as determined by publicly available ICER analyses. Drugs to which the FDA has given breakthrough therapy status will not be eligible for exclusion.

CVS’s approach is "another example of how payers and PBMs are looking at opportunities to manage drug costs by tying access to competitive cost-effectiveness," according to Ami Gopalan, Pharm.D., vice president at Precision for Value. "As therapeutic classes become more competitive, encompassing multiple products with similar efficacy and safety, programs like the one promoted by CVS provide another option for formulary management."

Yet Lisa Kennedy, Ph.D., chief economist at Epiphany, is more skeptical. "Already 'me-too' drugs are subject to negotiation such that they can be excluded from formularies — I'm not sure if this is going to have such a material effect on them," she says. "The question is how this will affect innovative drugs where there are fewer alternatives for patients.…I can't see a lot of benefits to this approach."

"I'm not sure how this will affect products at launch, but it could function to put pressure on manufacturers not to raise their prices over time — this combined with competitive pressure," Kennedy adds.

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