Two drugs sold by Horizon Pharmaceuticals (HZNP - Get Report) are being kicked off the formularies maintained by Express Scripts (ESRX - Get Report) and CVS Caremark (CVS - Get Report) starting next year, Horizon disclosed Monday in a regulatory filing. Horizon shares are down 30% to $9.66 in recent trading.
Express Scripts and CVS Caremark are the largest and second-largest pharmacy benefits managers in the U.S. Both have been aggressive with efforts to rein in ever-escalating drug prices by refusing reimbursement unless drug companies offer significant discounts. The New York Times published an expansive article on the fight between drug companies and PBMs in June that's worth reading.
The Horizon drugs getting kicked off the formularies are Duexis and Vimovo. Both premium-priced products consist of generic, low-cost pain relievers co-formulated with other drugs to reduce side effects. In the first quarter, Duexis and Vimovo accounted for 92% of Horizon's net product sales. The company reports second-quarter financial results on May 9.
Horizon estimates 20-30% of its Duexis and Vimovo prescriptions could be at risk by being excluded from the Express Scripts and CVS Caremark formularies. Starting next year, customers of both PBMS won't be reimbursed for the drugs and will have to pay full price if they still want them.
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