New to market formulary blocks (NTMBs) are increasingly prevalent strategies pharmacy benefit managers (PBMs) are using to control specialty prescription drug costs. NTMBs bar certain newly released specialty drugs from coverage on a PBM’s formulary/formularies. This practice allows PBM Pharmaceutical and Therapeutics Committees (P&T) time to review the drugs for clinical appropriateness and determine if any utilization management tools such as prior authorization, step therapy, or quantity limits, should be applied when a plan covers the drug.
NTMBs also give the PBM time to develop and implement clinical criteria associated with the new specialty drug(s). There is no “industry standard” for the length of a NTMB, but PBMs generally block coverage for up to six months. Employer plan sponsors have limited awareness of their PBM’s existing NTMB strategies; even fewer have awareness or ongoing education from their PBMs about which new specialty drugs are blocked and which are not.
NTMBs do not necessarily fully block coverage of these new drugs. Patients who demonstrate a clinical need for a particular specialty drug can still get access through a medical exception process. Plan sponsors can also choose to accept the NTMB recommendation.
The NTMB strategy can also assist PBMs in gaining more leverage with drug manufacturers. When manufacturers know their new drug may face potential blocking from the formulary, they may be more receptive to offering more significant rebates in hopes of having their drugs on the formulary and covered by plan sponsors.
When using a PBM’s NTMB strategy, plan sponsors should consider if patients will experience access issues for clinically-appropriate specialty medications. Limiting access, in turn, has the potential to negatively impact clinical outcomes. The goal of NTMBs is not to deny all access to new specialty drugs. Plan sponsors who choose to use NTMBs should ensure their PBM has good processes in place for clinically-appropriate medical exceptions and prior authorizations for specific new to market specialty drugs. Plan sponsors’ PBMs should be updating their clinical criteria for medical necessity or prior authorization so that patients who have valid clinical needs can obtain authorization for coverage for a new specialty drug.
Only 50% of employers are aware of new to market formulary blocks
Although NTMBs are becoming a more widely utilized strategy for PBMs, many plan sponsors are unaware of their options to use NTMBs. Our recent survey, the “Trends in Specialty Drug Benefit Design Report,” measured plan sponsors’ awareness of NTMBs. Our surveyors asked the plan sponsors whether they were aware of NTMBs, and provided a short description of NTMBs and how they work.
Only 58% of all respondents were aware of NTMBs. While health plans had the highest awareness rate at 88%, only 50% of employers were aware of NTMBs and how they worked.
There is room for improvement to generate awareness and provide more ongoing education surrounding NTMBs for plan sponsors. It is only through increased awareness and knowledge that plan sponsors will understand their options on how to use NTMBs to control costs better while supporting patients.
Where do plan sponsors get information on NTMBs for specialty drugs?
Survey respondents who were aware of/had prior knowledge about specialty NTMBs were asked about their primary source of information about NTMBs for specialty medications. 53% of all respondents, and 57% of employers, stated that their PBM account team was their primary information source surrounding specialty NTMB strategies.
This research clearly articulates the significant influence PBM account teams have on how plan sponsors learn about NTMBS; from the amount of detailed information to the frequency of notifications about NTMBs. The next most common sources of information were health plans (19% of all respondents). The third most prominent source of information was benefit consultants or brokers (15% of respondents).
What is the key driver to recommending NTMBs?
Managing costs of specialty drugs is a top priority for plan sponsors. It’s not surprising our survey found “cost” ranked as the primary reason for recommending NTMBs for 58% of all respondents; 70% of employers, and 86% of unions.
For health plans, “clinical reasons” ranked as the top reason for recommending NTMBs.
Whether a plan sponsor’s top priorities are cost control, clinical appropriateness, or rebate improvement, NTMBs can be part of the specialty drug benefit strategies.
New to market launch exclusions recommendations are frequently followed
NTMBs are not set in stone. These are not mandates but rather recommendations. Plan sponsors can determine if they want to accept their PBM’s or consultant’s NTMB recommendation for a particular new specialty drug
Our survey found there is a significant divide on whether to adopt NTMB recommendations: 51% of respondents said they “always or most of the time” exclude new to market products when recommended. But 42% of respondents said they “never or sometimes” use NTMB recommendations.
Whether or not a plan sponsor uses NTMBs as part of their specialty pharmacy strategy, it’s important to know this option exists and can be utilized when appropriately aligned with a plan’s goals.
69% of plans have clinical criteria in place for medical exceptions to NTMBs
Excluding a new specialty drug can have potential clinical impacts, so it’s essential to take a thoughtful approach. When using NTMBs, PBMs should have sound clinical criteria (based on the latest clinical findings) in place to make sure patients have access to medical exceptions when necessary.
Our survey found that 69% of plan sponsors reported having clinical criteria in place to allow medical exceptions for NTMBs.
Patient treatment delays due to NTMBs are only tracked by 20% of plans
NTMBs can be a powerful tool to control costs, but the adoption of NTMBs is only part of the equation. When using NTMBs, clinical outcomes should be tracked and reported back to plan sponsors along with any other impacts on the plan and members. Our survey found significant room for improvement in how clinical outcomes are reported back to plan sponsors when NTMBs are in place.
52% of all respondents are tracking NTMB cost savings, and 41% of all respondents are reporting the impact on total rebates for NTMBs. However, patient-related outcomes are not reported as frequently. 20% of respondents said they can report on patient treatment delays related to NTMBs, and only 27% are tracking clinical outcomes associated with NTMBs.
This is an opportunity for plan sponsors to receive more targeted and patient-focused clinical outcome reporting related to NTMBs. Along with the financial impact of excluding certain new to market specialty drugs from a formulary, it’s important to track other patient-related outcomes to ensure patients can have access to effective, clinically-appropriate medications.
Ready to learn more? Download the Trends in Specialty Benefit Design Report to read our latest insights on new to market formulary blocks (NTMBs). Don’t be part of the 50% of employer plan sponsors who aren’t informed about NTMBs.