This week, I’m rerunning some popular posts while I attend Asembia’s 2019 Specialty Pharmacy Summit.
This is an especially timely rerun. Believe it or not, Express Scripts' 2019 formulary prefers Eli Lilly's high-list/high-rebate Humalog insulin over the authorized generic version that is being sold at a 50% lower list price. The authorized generic will be preferred only on Express Scripts' Flex Formulary, which has very low adoption.
Bottom line: Many plans still crave rebate dollars. Sorry, patients with deductibles and coinsurance. The gross-to-net bubble lives on!
Click here to see the original post and comments from November 2018.
Express Scripts has just announced its National Preferred Flex Formulary, a new option that favors drugs with lower list prices over the high-list/high-rebate versions of these products. Click here to read the press release.
This new formulary signals that Express Scripts is trying to prepare its plan sponsor clients for a world without rebates. The formulary also provides a way for Express Scripts to prepare itself for such a world.
As I explain below, many plan sponsors embrace the warped incentives of the gross-to-net bubble—the ever-growing pile of money between a manufacturer’s list price for a drug and the net price after rebates and other reductions. I outline two crucial payer and PBM factors that make it difficult for manufacturers to cut list prices and pop the gross-to-net bubble.
Express Scripts’ new formulary challenges plan sponsors that are addicted to rebate dollars. Let’s see how many plan sponsors will prefer a low list-price over a high-list/high-rebate product—and how many more manufacturers will respond with lower list prices.
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