As manufacturers enter into the final phases of formulary rebate contract renewals for 2014, industry observers were served an additional reminder earlier this week of the power that managed care plans and PBMs wield over manufacturers when Novo Nordisk announced that several flagship products in its diabetes franchise would not be covered by plans administered by Express Scripts.

As reported by a number of outlets, Novo’s diabetes drug Victoza would be replaced by the Byetta/Bydureon franchise marketed by Bristol-Myers Squibb, whereas Novo’s insulin products Novolin and NovoLog will be replaced by products marketed by Eli Lilly.

While little detail has been made available about which Express Scripts contracts were involved, given the reports of the significant financial impact to Novo, a likely scenario is that Novo’s products will be off-formulary on all Express Scripts contracts covering commercial and Medicare Part D lives in 2014, and potentially beyond that.   In terms of the potential financial impact of losing formulary access, one analyst estimated that the Express Scripts contracts accounted for 15 to 20 percent of Novo’s Victoza prescription sales in the US.

News that the managed care contracting space and access to formularies has become extremely competitive across certain therapeutic categories should come as no surprise, particularly in the wake of PBM consolidation over the last several years and increasing price sensitivity among payers.  In fact, Lilly is no stranger to these issues, having itself had its insulin products blocked from CVS Caremark formularies in recent years.

We will provide future updates on any reporting we come across regarding the precise reasons for the formulary changes.  In particular, we will keep a watchful eye for information on one potential consideration that has not been mentioned yet:  whether the drug co-pay and savings cards programs implemented by Novo in support of Victoza and NovoLog played any role in the Express Scripts negotiation.

As our audience is well aware, the use of co-pay card and other savings offers by manufacturers has spawned a tremendous amount of commentary — and controversy — over the past several years. We’ll be talking more about drug co-pay cards, coupons and vouchers and patient reimbursement support programs on these pages in the future.