(Reuters) - Express Scripts Holding Co on Tuesday announced a new drug reimbursement list with lower U.S. prices for brand-name medications, as a way to encourage drugmakers to move away from paying rebates after a prescription is filled. The manager of prescription drug benefits for large corporate employers and government health plans said its new National Preferred Flex Formulary will be available as of Jan. 1 to all clients.
So far two drugs from a Gilead Sciences Inc unit will be on the new formulary, which Express Scripts said in a statement it hoped would encourage more drugmakers to keep list prices low.
Drug rebates have come under fire from the Trump Administration and consumer groups as patients find themselves paying much higher insurance co-payments and deductibles tied to a drug’s sticker price.
“This is all in an effort to normalize rebates in the marketplace,” Steve Miller, Express Scripts’ chief medical officer, said in an interview. “We have talked to dozens of pharmaceutical manufacturers. Many have expressed tremendous interest in this.”
He said the new formulary may appeal to employers and health insurers seeking to reduce patient out-of-pocket costs and reliance on brand rebates, but plan sponsors who prefer the current price system and rebates “can stick to that.”
He acknowledged that drugmakers would still offer rebates as a lever to influence payers deciding coverage terms for similar medications. The new coverage list is largely identical to Express Scripts’ National Preferred Formulary, which covers some 3,000 branded and generic drugs for nearly 25 million people.
Gilead in September slashed the list prices of two hepatitis C therapies, Epclusa and Harvoni, to $24,000 per course of treatment from close to $100,000. The company said that competition among hepatitis C therapies, rebates and discounts had already shaved more than 60 percent off the average U.S. price paid for the drugs.
At least one other drugmaker has cut list prices to limit patient costs and help make sure prescriptions get filled.
Amgen Inc last month slashed the U.S. list price for its cholesterol drug Repatha by 60 percent to $5,850 a year, citing the need to reduce out-of-pocket costs for patients on Medicare, the federal government’s health plan for seniors.
Rival cholesterol drug Praluent, from partners Regeneron Pharmaceuticals Inc and Sanofi SA (SASY.PA>, is the preferred option on Express Scripts’ largest formulary through 2019. But Miller said Amgen’s Repatha could displace Praluent on the new formulary.
Miller said other categories in which lower list prices and minimal rebates would make sense for drugmakers, payers and patients are insulins, high-priced respiratory drugs and emergency allergy injections.
Reporting by Deena Beasley; Editing by Richard Chang