CVS Caremark Removes Humira From Formulary: What It Means For The Market

CVS Announces The Removal of Humira From Its Formulary

On January 3, 2024, CVS Caremark announced it will be removing brand Humira from several of its formularies to be replaced by biosimilars. Since launching approximately 20 years ago, Humira has netted about $200 billion in profit, solidifying itself as the highest-gross drug in the pharmaceutical space as of 2020. The press release touched on several key points.

• Effective April 1, 2024, CVS Caremark will remove Humira from the major national commercial template formularies and cover Humira biosimilars instead. Humira will continue to be an option for its customers with Choice and Standard Opt Out commercial formularies.

  • Note: Commercial Formularies include Standard Control Formulary, Advanced Control Formulary, Advanced Control Specialty Formulary and Value Formulary.  These formularies are the most common drug lists used by employers, unions, and health plans for prescription drug coverage, responsible for over 90% of their commercial clients.

• CVS Caremark also announced that AbbVie has agreed to supply Cordavis with a committed volume of co-branded Humira. It will be available in Q2.

  • Cordavis was launched in August 2023 to co-produce biosimilars. At that time, Cordavis announced a contract with Sandoz to commercialize Cordavis Hyrimoz, a biosimilar of Humira, at a list price 80% below the then-current price of Humira.

What are biosimilars? And are they safe?

Biosimilars have certainly been a hot topic in recent years and are often associated with the potential for change. A biosimilar, as defined by the FDA, is a “biologic that is highly similar and has no clinically meaningful differences in terms of safety, purity, and potency” from the already approved drug. Furthermore, a study by the FDA found no difference in the risk of death, serious adverse events, and treatment discontinuations between participants who switched between biosimilars and reference products and participants who did not switch.

Additional studies of biosimilar switching have confirmed these findings as well. It should be noted that while biosimilars are an almost identical copy of the original product, they are a biological product made from living organisms. Thus, an exact copy cannot be made. Additionally, once approved, not all receive an interchangeable designation, which allows the biosimilar to be automatically substituted at the dispensing pharmacy without intervention from the prescriber. Many of the Humira biosimilars are not interchangeable. Therefore, physicians will be required to write a new prescription to dispense the biosimilar.

Impact to payers

Although this change is specific to payers who use CVS Caremark as their PBM, it may have further-reaching repercussions. As we know, Humira has been at parity with biosimilars on the formularies of ESI and Optum. Yet formularies are subject to change throughout the year. Although only conjecture at this time, we can look at the CVS Caremark example to see potential considerations down the line for the other two largest PBMs in the country, should they decide to do something similar.

Employee/member impact

As with any formulary change, there will always be some degree of member disruption. With the removal of Humira, members currently receiving Humira will be transitioned to an alternative therapy. Member and provider notification and education are critical aspects in supporting this transition. For CVS Caremark, this means providing notification 60 days in advance and following up with text message reminders and education. Additionally, CVS stated it will “meaningfully engage prescribers to guide them through appropriate next steps to help transition plan members.”

Cost savings

It is very possible that payers may experience cost savings related to the exclusion of Humira. Biosimilars by nature are often far more inexpensive than brand treatments. Until this announcement by CVS Caremark, brand and biosimilar versions of Humira were covered at parity, meaning there was no financial incentive for members to switch from brand Humira. Preferred formulary placement strategies are generally what lead to shifts in utilization to lowest net cost products. We have the potential to see that with CVS Caremark, who estimated savings to be up to 27% in net cost savings for the autoimmune class compared to 2022.

CVS Caremark is primarily preferring two biosimilars (adalimumab-adaz and Hyrimoz) with one formulary also offering Hadlima. All three of these therapies are high-concentration formulations for which most brand Humira patients are currently utilizing. As noted below in the table, two of the three therapies are low WAC products. Note that these products offer lower upfront prices but no or low rebates.

CVS Caremark is also continuing to prefer some brand alternative medications for Humira, such as Skyrizi, Rinvoq, Enbrel, Stelara, and Cosentyx. Depending on the patient, physicians could potentially choose to prescribe one of these higher-cost brand products in lieu of switching the patient to a Humira biosimilar. Plan sponsors should carefully consider the impact of these brand alternatives, as member switching could erode some of the planned cost savings of patients switching to lower-cost Humira biosimilars.

CVS Health expands manufacturing presence through Cordavis

Another interesting aspect of the CVS Caremark announcement came when it announced that “AbbVie, as part of its continued commitment to access, has entered into an agreement to supply Cordavis, a CVS Health company, with a committed volume of co-branded Humira.” Cordavis is a wholly owned subsidiary of CVS Health that was launched in August of 2023 with the purpose of working “directly with manufacturers to commercialize and/or coproduce biosimilar products.” CVS Health has indicated an expected availability of this product within the second quarter of 2024 but has not indicated how this product will be treated within formulary placements. CVS Health entering manufacturing is a further step toward vertical integration within the pharmacy supply chain, which could be a risk to plan sponsors. However, in the short run, CVS may offer attractive pricing on Cordavis products for its PBM clients.

Our recommendations

This announcement brought with it many considerations for not just those working with CVS Caremark, but for the industry as a whole. It signals a shift in the market for one of the largest drugs in the world. Our team of pharmacy benefit experts has and continues to dig deep into what this means for payers and what they can do about it. Below are a few strategies payers need to consider due to this change.

• Consider the impact on plan costs if members transition to low WAC products without rebates. While savings can occur on the front end, it is important to analyze how impactful the transition will be due to the lower rebates.
• Consider not allowing or limiting the path for exception to remain on brand Humira. As discussed, biosimilars and brand alternatives have nearly identical effectiveness. Although allowing members to remain on Humira will limit disruption, it will come at the expense of cost savings.
• Proactively evaluate prior authorization criteria for members to switch to high-cost products. Aligning prior authorization criteria with evidence-based guidelines can not only be valuable for member outcomes but will limit unnecessary use of high-cost products that contribute to excess cost.

Our experts are continually monitoring this change as well as engaging with other PBM vendors to provide our clients with the most up-to-date information and strategies. To learn more about the recommendations above in depth or anything else, please feel free to contact us.

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