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Coverage Denied: The Growing Problem of Formulary Restrictions

When health insurers stop covering medications, patients and families have to scramble for solutions.
Author: By Lisa Fields

For many years, Rodney Dalrymple, of Booneville, Mississippi, has managed his severe hemophilia A with a factor product that he infuses daily. In November 2023, he was shocked to hear that his health insurance company’s pharmacy benefit manager (PBM) wouldn’t cover his medication anymore. The only product that it would pay for, Dalrymple learned, is one that he doesn’t feel comfortable taking.

Dalrymple’s hematologist appealed to the PBM on his behalf and even had a peer-to-peer meeting to discuss the benefits of Dalrymple staying on his current medication, but the requests were denied. Dalrymple told the PBM that he’d be willing to switch to another factor VIII drug, but he hasn’t been offered an alternative. As his factor supply dwindles, Dalrymple is uncertain about his prospects and growing anxious about his treatments.

“I’ve been skipping days to try to stretch and manage my factor, but I’m running out,” he says. “My ankles have been bothering me, and I’m worried that I could start having more bleeds. Or in the situation of an accident, I wouldn’t have any factor on hand. It puts me in a really bad situation. I don’t know what I’m going to do.”

Dalrymple’s situation isn’t isolated. In recent years, a growing number of PBMs — third-party companies that function as intermediaries between insurance providers and pharmaceutical manufacturers — have removed many medications from their lists of prescription drugs that they will cover, known as formularies. These formulary restrictions can limit patients’ access to specific brands of medications — or in this case, particular brand-name clotting factors that people need to help them manage their bleeding disorders.

“It can be very disturbing to our practice, and to our relationship with the patient,” says Maissaa Janbain, M.D., director of the Louisiana Center for Bleeding and Clotting Disorders and an associate professor of hematology and oncology at Tulane University School of Medicine. “This is a problem that is going to come up more and more, now that there are so many products that are completely different.”

A Cost-Cutting Measure

When insurance companies’ PBMs adjust their formularies, it’s often to remove very expensive medications and replace them with cheaper generic alternatives. Because the majority of biopharmaceutical products used to treat or manage bleeding disorders are quite costly and have no generic versions, some have been restricted from formularies.

“We understand the importance of managing costs and keeping the bottom line down, but that can’t come at the expense of a patient’s health, well-being, or their life,” says Nathan Schaefer, senior vice president of public policy and access for the National Bleeding Disorders Foundation (NBDF). “They’re limiting access to the medication that a physician and the patient have determined is most appropriate.”

In 2023, CVS Caremark, one of the country’s largest PBMs, removed all standard half-life products for people with hemophilia B from its 2024 formulary. Before that, BlueCross BlueShield of Tennessee removed at least 17 treatments for bleeding disorders from its 2023 formulary.

Formulary restrictions have been increasing for more than a decade, according to research published in March 2024 in the journal Health Affairs. In 2011, Medicare Part D plans excluded 20.4% of medications from their formularies. In 2020, the number of Medicare formulary exclusions rose to 30.4%. The study found significantly more restrictions for brand-name medications, which are pricier than generic drugs, but generics were also restricted.

PBMs don’t often share details about the internal processes that lead to decisions on formulary restrictions.

“They tell you, ‘We run it by our experts.’ Who are your experts?” Janbain says.

“As individualized therapeutic approaches are encouraged, these decisions need to be left to the clinician who knows the patient well and not be imposed as a formulary by the company,” she says.

After CVS Caremark removed standard half-life products from its formulary, Schaefer asked the company to explain its decision, but he didn’t get specifics.

“They indicated that they have an expert panel that advises what gets onto the formularies and what does not,” he says. “I asked them if they could share with me who those panelists are, and they declined to provide that information but indicated that there is hematology expertise represented on their panel.”

Potential Long-Term Repercussions

Hematologists and bleeding disorders advocacy groups worry that formulary restrictions could negatively affect patients’ health. When someone responds well to a medication, they typically remain on it long term. But formulary restrictions may require people to switch drugs unless they can pay out of pocket, which isn’t typically feasible.

“If a patient is stable on a particular factor medication, we usually recommend staying with that factor medication for as long as possible,” says Kaitlin Rigsby, R.N., a specialty nurse at the Arkansas Center for Bleeding Disorders at Arkansas Children’s Hospital in Little Rock. “When you switch factor medications, you can run the risk of developing an inhibitor.”

While awaiting a PBM’s approval for a nonformulary drug, patients may be nonadherent, causing gaps in their care. Others may not respond well to factor listed on a formulary. Both scenarios can be problematic.

Schaefer says that while formulary restrictions may appear to save money in the short term, they can end up leading to much higher costs.

“A person could very well end up in the emergency room,” he says. “If they’ve got permanent joint damage, they could have very expensive interventions that they require for years after the actual episode. We have to consider the patient’s health and well-being for the rest of their life.”

Appealing Can Be Complicated

If you want to continue on a medication that’s removed from your PBM’s formulary, you must pay out of pocket, unless you get an exception from the PBM. Some PBMs require prior authorization from prescribing physicians. Others require step therapy, in which patients first have to try formulary medications before the PBM will consider use of a nonformulary drug.

Janbain says a PBM’s requirement that patients must fail on formulary drugs before they’ll consider approving a nonformulary drug is particularly concerning.

“Any breakthrough bleed should be a failure,” Janbain says. “Whether the payer is going to go with that or not, that’s where I have some concerns. Some clinical trials of medications reported one or two bleeds, so what if a PBM will tell you, ‘Oh, it’s OK to have one or two bleeds’? That’s why I’m worried.”

In 2018, Ohio’s Medicaid PBM stipulated that to qualify for drugs not listed on the formulary, patients would first need to fail on two formulary medications. “Bleeding disorders advocates in Ohio were able to push back, and the Medicaid office changed their policies so that you would only have to fail on one,” Schaefer says. “That’s still not ideal, but it’s an indication of our success when it comes to pushing back on this.”

Some manufacturers will cover patients’ drug costs while they await exceptions from PBMs, says Kara Burge, LCSW, a social worker at the Arkansas Center for Bleeding Disorders.

“The drug companies make a lot of money off of these patients, so I’m glad they do swoop in to take care of them,” she says. “On the other hand, the insurance companies know that, so there’s no motivation or incentive for them to be more thoughtful about these things.”

Schaefer hasn’t heard of any successful CVS Caremark appeals since it restricted its 2024 formulary. But PBMs do sometimes reconsider.

After Kolson Romans, of Gretna, Nebraska, started crawling at 5 months old in late 2023, he developed internal bleeds in his knees due to his severe hemophilia A.

Kolson’s hematologist prescribed a medication for prophylaxis. The Romans family’s PBM denied coverage, possibly because Kolson was diagnosed with moderate hemophilia A as a newborn, before his diagnosis changed to severe. His doctor filed a prior authorization, appeals, and a peer-to-peer review, which were all denied. The family contacted the manufacturer for assistance and checked to see if Kolson qualified for Medicaid. “My husband and I were even talking about making a career change to get different insurance,” says Emily Romans, Kolson’s mom.

Three months after the initial denial, the PBM approved the medication. The news arrived just days after Romans posted about Kolson’s situation on social media. (Romans tagged the PBM, and her post inspired a relative to speak with an influential friend at the PBM on Kolson’s behalf.)

“We hope it’s a life-changing medication for him, but it was a frustrating process,” she says. “It feels like it was all about who our family knew and making a big deal about it online.”

What You Can Do

Pharmacy benefit managers may alter their formularies at any time, and your medication could no longer be covered. If you can’t get factor or other essential medications anymore, take these steps:

Involve your hematologist. Contact your hemophilia treatment center as soon as you learn about formulary restrictions, so that it can advocate for you.

“Patients always need their health care provider to back them up,” Janbain says. “Working as a team with the HTC and the health care provider is very important.”

Appeal the decision. File a grievance with the PBM and make an appeal to remain on your medication. Share as much personal information as you’re willing to reveal.

“Tell them who you are,” Rigsby says. “Let them know that you’re a real human with real needs.”

Share your story. If your appeal is denied, contact representatives in your state capital and Washington, D.C.

“Write down your story and send it to your legislators,” Rigsby says. “The more that you feel empowered to share your story and how this impacts you, hopefully we can make small changes so that insurance companies and pharmacists are creating formularies that try to have more of a patient-centered communication about decisions.”

Get experts’ input when choosing new insurance. You may decide to change health insurance plans during open enrollment because of formulary restrictions, or you may need to select a plan when switching jobs. Either way, get input from your social worker, HTC administrative staff, or pharmacist.

“The more you can understand your insurance, which can be really complicated, the better,” says Burge. “Call your social worker. A lot of times, we do have resources, and we can help break things down.”

You should also visit a PBM’s website to see its comprehensive formulary list before signing on.

“Open enrollment is usually at the end of each fiscal year,” Rigsby says. “A PBM may not release the next year’s pharmacy formulary list until Jan. 1, but sometimes they release them early and you can verify that the insurance company or policy covers the medication you need. It’s going to make it easier on everyone in the long run.”