Excerpt from the article:

By AMI GOPALAN

Last week’s announcement by CVS Health, which operates one of the country’s largest pharmacy benefit managers, is a harbinger of what may lie ahead for drug pricing and access in the United States.

In what it called an effort to nudge drug makers to reduce launch prices to a reasonable level, CVS said it would allow its Caremark clients — health plans, self-funded employer groups, and the like — to exclude drugs from their formularies (essentially a list of covered drugs) that don’t meet a benchmark of $100,000 per quality-adjusted life year in analyses by the independent Institute for Clinical and Economic Review (ICER). The initial focus will be on so-called me-too drugs, those where therapeutic alternatives exist, and exclude those the Food and Drug Administration deems as breakthrough drugs.

From the employer’s or insurer’s perspective, an ICER analysis indicating that a drug does not meet the quality-adjusted life year benchmark provides a transparent rationale for why certain products aren’t covered by the plan. From the patient’s perspective, it means that the drugs on the formulary are covered by their benefit, while they can get access to a drug that isn’t on the formulary only if they pay for it or go through an appeals and grievance process.

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