Generics are getting boxed out of optimal formulary placement: Here's why

Generic and biosimilar drugs are becoming more expensive and less accessible to patients because of their formulary placement, according to Drug Topics.

Pharmacy benefit managers are increasingly putting generic and biosimilar drugs on higher formulary tiers, significantly increasing copays for patients prescribed generics and making it harder for those drugs to compete with branded drugs.

In 2011, 71 percent of generic drugs were placed on tier 1 of the formulary, according to Drug Topics. By 2015, only 19 percent of generic drugs were on tier 1. This 53 percent decrease in generic drugs on tier 1 translated to a $6.2 billion increase in generic drug costs for patients.

During the same time period, utilization of generic drugs increased by only 20 percent and the price of the generic drugs analyzed in the study increased by just 1 percent, indicating that formulary placement was one of the main drivers behind the jump in patient financial responsibility for generic drugs increases, according to the report.

A study on Medicare Part D trends released this year by healthcare consulting firm Avalere showed that generic drugs are placed on the tier with the lowest copay only 14 percent of the time.

It's not just old generics having issues, according to the report. New generic and biosimilar drugs are struggling to gain market share due to rebate agreements struck between branded drugmakers and PBMs that are conditioned on excluding generic competitors on formularies.

The Biosimilars Council recommended that the FDA, CMS and Congress make policies to ensure rebates do not prevent patient access to biosimilars, regulatory barriers preventing competition are removed and patent transparency is increased.

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