UnitedHealth 2018 Formulary Updates Broaden Exclusions, Deter Copay Coupons

Insurer will begin excluding drugs when there are less expensive and clinically equivalent alternatives available and eliminate manufacturer coupons from the calculation of deductibles and out-of-pocket limits.

[UnitedHealthCare]'s commercial insurance formulary policies for 2018 take a broader approach to coverage exclusions and aim new strategies at discouraging the use of manufacturer-sponsored copay coupons. The policies were announced recently to brokers as part of United's 2018 formulary updates. They apply to fully-insured and self-funded plans.

The insurer will remove four branded drugs from its formularies beginning Jan. 1, 2018 using an approach that allows for exclusions when there are less expensive drugs with equivalent clinical benefit available.

Previously, UnitedHealth only excluded drugs in two situations -- when a therapeutically equivalent drug became available OTC or when another product with same active ingredient became available through the pharmacy benefit.

The drugs impacted by the new policy are Merck & Co. Inc.'s Dulera (mometasone fumerate/formoterol fumerate), PTC Therapeutics Inc.'s Emflaza (deflazacort), Kowa Pharmaceuticals America Inc.'s Livalo (pitavastatin) and Lundbeck Inc. and Takeda Pharmaceutical Co. Ltd. 's Trintellix (vortioxetine).

Dulera's exclusion comes amid other changes in United's coverage of the asthma category. The moves follow the April launch of Teva Pharmaceutical Industries Ltd.'sAirDuo RespiClick, which contains the same active ingredients as GlaxoSmithKline PLC's Advair (fluticasone/salmeterol) but in a different inhaler device. (Also see "Teva's AirDuo Authorized Generic Priced At A 70% Discount To Advair" - Scrip, 20 Apr, 2017.)

UnitedHealthcare will also modify its formulary exclusion practices next year by removing branded drugs from coverage as soon as a generic version becomes available.

UnitedHealthcare will cover AirDuo RespiClick but not the higher-priced authorized generic of the product that has also been introduced by Teva. And other brands besides Dulera will be covered, likely reflecting hefty rebates from the manufacturers. They include Advair, GSK's BreoEllipta (fluticasone/furoate/vilanterol) and AstraZeneca PLC's Symbicort (budesonide/formoterol fumarate).

Emflaza became one of the more egregious examples of drug pricing abuses when it was approved in February for Duchenne muscular dystrophy and priced at $89,000 per year. (Also see "Marathon Gets Long-Known Duchenne Treatment On-Label, But Will Payers Respond?" - Scrip, 10 Feb, 2017.)

The drug, a corticosteroid, had been used abroad as a much less expensive generic off-label for years before officially gaining the DMD indication. PTC acquired it in March from its developer, Marathon Pharmaceuticals LLC, and lowered the price to $35,000 a year. But UnitedHealthcare still consider the price excessive and has decided not to cover it.

Livalo, a branded statin for reducing cholesterol, will not be covered because it is significantly more expensive than the widely-available generic statins. Similarly, Trintellix is considered more expensive but not necessarily more effective than other options available for depression.

UnitedHealthcare will further modify its formulary exclusion practices next year by removing branded drugs from coverage as soon as a generic version becomes available. Currently, brand are excluded when generics launch only when the insurer implements its biannual formulary updates on Jan. 1 and July 1.

That shift should ensure swift market access for generics, and seems aligned with a suggestion from FDA Commissioner Scott Gottlieb that payors reserve some market share for biosimilars in an effort to encourage their development. (Also see "Payers Could Guarantee Biosimilar Market Share, FDA's Gottlieb Suggests" - Pink Sheet, 22 Sep, 2017.)

New Accounting For Copay Coupons

UnitedHealthcare has also developed a new program to deter members from using copay coupons. Manufacturer coupons have been an ongoing concern for payers because though they can be a good deal for individual members, they also lead to the use of more expensive drugs, higher utilization and an increase in payer costs.

UnitedHealthcare has had a program in place for some years in which specialty pharmacies in its network decline to redeem copay coupons for non-preferred products. The new program will expand on that by addressing the increasing numbers of members in high-deductible plans or those with coinsurance linked to out-of-pocket maximums.

Currently, both the member copay and the amount covered by the manufacturer coupon are applied to the deductible or out-of-pocket cap, mainly because the coupon is processed after a claim has been electronically sent to the insurer.

Next year, United's specialty pharmacy, BriovaRx, will rapidly send back information regarding coupons that have been used, allowing the insurer to more accurately reflect only what the member pays. The change will likely cause deductibles and out-of-pocket limits to be met more slowly, which is expected to cause members to more proactively choose less expensive options when they are available.