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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