Even as PBMs Face Reckoning, Formulary Exclusions Rise Again in 2023

In 2023, the country’s three largest PBMs are each excluding around 600 drugs from their standard formularies, according to a recent analysis from the Drug Channels Institute. That’s a greater number than ever before, as drug exclusion lists have risen every year for roughly the last decade. To one industry observer, that trend demonstrates the sticking power of the reigning PBM business model.

“The exclusion lists really reflect just the ongoing interest that PBMs have in increasing their bargaining power to leverage rebates,” says Ryan Urgo, a managing director at Avalere Health. It shows, ultimately, that “the rebate model remains alive and well,” he adds, referring to PBMs’ ability to negotiate deep discounts on branded drugs in exchange for favorable formulary placement, even if those drugs may have a higher list price.

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