Medicare spending and potential savings on brand-name drugs with available generic substitutes excluded by 2 large PBMs

Yale University researchers spearheaded an analysis into PBM formulary drug exclusion lists—which aim to keep the price of prescription medicine in check—and how they work with Medicare coverage. For the purpose of this study, the investigators singled out branded drugs that did not qualify for coverage by CVS Caremark and Express Scripts during 2012–15. Considering only those excluded medications that had copycat formulations and for which Medicare Part D program spending and utilization data also were available, they identified 62 unique drugs for their analysis. By subtracting projected spending on generic alternatives from actual spending on exclusion-listed drugs, the team determined that CMS spent $3.6 billion on non-covered medications but could have saved nearly $3 billion by turning to generic substitutes. Potential savings of $138.4 million in 2012, the researchers further calculated, ballooned to $1.2 billion by 2015 as the PBMs added more drugs to their exclusion lists.