Drugs left off PBM lists can lead to worse patient outcomes, higher costs

The top three PBMs each excluded roughly 600 drugs from their 2023 formularies.
article cover

Jeffrey Hamilton/Getty Images

· 5 min read

Pharmacy benefit managers (PBMs) are leaving more drugs off their formularies, which may prompt doctors to prescribe drugs that aren’t as effective or are more costly.

PBMs are companies that work on behalf of insurers and negotiate with drug manufacturers to create formularies, which are lists of drugs the insurers cover. PBMs also create lists of the drugs they exclude from their formularies, and these drugs therefore don’t get covered.

When drugs are left off formularies, patients have to pay more out of pocket to get the drugs they need. For those who can’t afford it, that can mean worse health outcomes and higher overall healthcare costs.

Exclusion lists have gotten longer every year, and these most often affect drugs for chronic illnesses, according to research from Xcenda, a pharmaceutical consulting firm owned by drug wholesaler AmerisourceBergen (which is expected to rebrand as Cencora in 2023).

“Who bears the consequences is really the prescriber, from a liability standpoint and also from a patient care standpoint. The patient can potentially have poor outcomes,” Robert Popovian, chief science policy officer at the Global Healthy Living Foundation, a nonprofit that advocates for increased access to healthcare services for people with chronic illnesses, told Healthcare Brew.

Back in the day

Formularies were initially created to make sure doctors prescribed patients the least expensive drugs that were still effective, according to research that Popovian conducted with the foundation in 2022.

PBMs began making formulary exclusion lists in 2011, according to Xcenda. CVS Caremark was the first to do so for the 2012 plan year, followed by Express Scripts in 2014 and Optum Rx in 2016.

Since then, the number of drugs left off formularies has risen sharply. In 2014, at least one of the top three PBMs excluded a total of 109 drugs, and in 2022, that number rose to 1,156, according to Xcenda’s research. In 2023, the top three PBMs each excluded about 600 drugs from their formularies, according to Drug Channels data.

There’s no legal limit to how many drugs PBMs can exclude, said Popovian.

Of the 1,156 drugs left off formularies in 2022, nearly half were brand-name medications that didn’t have a generic equivalent, according to Xcenda.

Leaving out chronic conditions

Drugs that treat chronic conditions such as diabetes, cardiovascular disease, dermatological conditions, and central nervous system disorders are most frequently affected by PBM formulary exclusions, according to Xcenda’s research.

Navigate the healthcare industry

Healthcare Brew covers pharmaceutical developments, health startups, the latest tech, and how it impacts hospitals and providers to keep administrators and providers informed.

Cancer drugs are also increasingly left off formularies, Xcenda’s research found. Express Scripts left 46 cancer drugs off its formulary between 2014 and 2022, accounting for 7% of its exclusions, the firm reported. CVS Caremark excluded 32 cancer drugs during the same time period, and Optum Rx excluded 30.

Drugs approved via one of the FDA’s four expedited approval pathways, including the accelerated approval pathway, are left off formularies more often, Xcenda’s research found. The pathways are designed to speed up the approval process for drugs that treat serious conditions. Between 2014 and 2022, PBMs excluded 178 drugs approved through one of the pathways for at least one year.

“The ultimate consequences for patients when they don’t get access to the drug that’s appropriate for them is obviously mortality or morbidity. Unfortunately, PBMs don’t want to take responsibility for that,” said Popovian.

PBMs do offer a pathway for patients to apply and get coverage of a drug on the exclusions list, but the process “can be time-consuming and burdensome for both the patient and their physician,” according to Xcenda.

“In my opinion, the solution is to go back to a tiered formulary where you have reasonable out-of-pocket costs for patients, and the patient and the prescriber—the clinician—can decide what is best for them, and they have access to all of them,” Popovian said.

An expensive swap

PBMs usually argue that the drugs they exclude generally have alternatives that are as equally as safe and effective, said Popovian. But according to his research, nearly half of all drug exclusions require doctors to prescribe medications that may have “adverse financial or medical outcomes for their patients.”

They also sometimes replace cheaper drugs with more expensive ones. In an analysis of Express Scripts’s 2022 formulary exclusions list, Popovian found that in 10 cases, the PBM excluded generic drugs in favor of “significantly more expensive” brand-name drugs. In some cases, the PBM excluded drugs from coverage without providing any alternatives.

“Although some formulary exclusions may be clinically and economically justified, a significant number require healthcare professionals to make medical decisions that may not be in the patient’s best interest or aligned to current standards of care,” Popovian wrote in the study.

CVS Caremark declined to comment. Optum Rx and Express Scripts did not respond to Healthcare Brew’s requests for comment.

Navigate the healthcare industry

Healthcare Brew covers pharmaceutical developments, health startups, the latest tech, and how it impacts hospitals and providers to keep administrators and providers informed.