(Bloomberg) — CVS Health Corp. will add 35 products to its lists of excluded drugs in 2017 and no longer cover some treatments for cancer and diabetes, in an aggressive move to favor lower-priced treatments and target what the company called "hyperinflation" of some other products.
The drug benefit manager will remove coverage for Novartis AG's leukemia treatment Tasigna, Medivation Inc.'s prostate cancer drug Xtandi, and Sanofi's insulin Lantus, expanding the company's strategy of excluding expensive products when alternatives are available. The total number of excluded drugs for 2017 will be 131, spokeswoman Carolyn Castel said Tuesday.
It's the first time that brand-name cancer drugs have been taken off CVS's standard formulary, Castel said in an e-mail.
The excluded drugs list also includes 10 that have had "hyperinflationary" price increases, the company said in a statement. For example, it will exclude coverage of Alcortin A gel, sold by closely held Novum Pharma LLC. CVS said that Alcortin's price has increased by about 30-fold in the last three years.
'Hyperinflation Strategy'
"More and more small drug companies are basically putting a hyperinflation strategy in place, hoping no one will notice it," said Troyen Brennan, CVS's chief medical officer, in a telephone interview. "Our feeling was we needed to address those relatively specifically."
Other drugs that CVS will exclude because of huge price increases include Nilandron and Dutoprol from Concordia International Corp., and Zegerid and DexPak from Valeant Pharmaceuticals International Inc.
Novum, Concordia and Valeant didn't respond to requests for comment.
While CVS used to review prices once year, it now has a team of people that check at least weekly for unexpected spikes, Brennan said. It specifically targeted drugs with greater than 200 percent cumulative price increases in three years, Executive Vice President Jonathan Roberts said on a conference call Tuesday where the company also discussed second-quarter financial results that topped analysts' estimates.
Oncology Drugs
Cancer has been one area where pharmacy benefit managers have been reluctant to push exclusions. Yet the rise in prices for pills to treat forms of the disease, combined with the availability of good alternatives, drove CVS to remove some brand-name medications for the first time, Brennan said.
Novartis's chronic myeloid leukemia drug Gleevec and its newer drug for the disease, Tasigna, will both be excluded after a generic version of Gleevec entered the U.S. market earlier this year. Medivation's Xtandi, meanwhile, competes with Zytiga from Johnson & Johnson.
