On Monday, CVS Health (NYSE: CVS) released its 2017 Standard Formulary Exclusion List and Express Scripts (NASDAQ: ESRX) released its 2017 National Preferred Formulary exclusion list.

Below is a summary of analyst commentary around the list changes:

CVS 2017 Standard Formulary Exclusion List:

Barclays analyst Eric Percher said most notably, CVS signaled aggressively on biosimilars, replacing Neupogen with Zarxio (limited impact under the pharmacy benefit) and Lantus with Basaglar for 2017 (significant impact under the pharmacy benefit)

Percher noted a therapeutics focus on Oncology, Diabetes, and Hep C:

1) Oncology: the exclusion of Xtandi (NASDAQ: MDVN) indicates that Zytiga (NYSE: JNJ) will likely be positioned favorably with CVS for 2017.

2) Diabetes: CVS has already chosen to exclude Lantus, suggesting CVS has reached (unknown) terms with Lilly (NYSE: LLY) on Basaglar. The SGLT-2 category remains an unknown.

3) Hep C: CVS's decision to exclude Daklinza, Olysio, and Zepatier in addition to Viekira Pak appear to position Gilead (NASDAQ: GILD) as the sole HCV supplier.

Horizon (NASDAQ: HZNP) announced that two of its primary care products Duexis and Vimovo were removed from the 2017 CVS/Caremark exclusion list.

Express Scripts 2017 National Preferred Formulary Exclusion List:

Barclays analyst Eric Percher said while Express Scripts's actions on its 2017 Preferred Drug List Exclusions appear reserved relative to CVS Health's 2017 exclusion list, ESRX noted that NPF member savings will increase by 38%, while the number of members impacted will decline significantly.

For 2017, Percher note that the company has reserved the right to reassess the Basal Insulins category and select inflammatory products following product launches later this year and within Hep C negotiations regarding Harvoni (NASDAQ: GILD) are ongoing.

Percher noted a therapeutics focus on Diabetes, HCV and Inflammatory:

1) Diabetes: The 2017 exclusion list showed no significant changes with the absence of decisions on SGLT-2s and insulin glargine suggesting ESRX is awaiting final data and pricing on Jardiance and Basaglar,

2) HCV: Exclusion of Zepatier (NYSE: MRK) and Daklinza (NYSE: BMY) could be seen as mild disappointments. Management indicated Harvoni's (NASDAQ: GILD) absence from the list indicates discussions are ongoing,

3) Inflammatory Diseases: The decision to exclude Taltz (NYSE; LLY) was somewhat surprising given strong data. Other noteworthy exclusions include Orencia (NYSE: BMY) and Simponi (NYSE: JNJ) 50mg. We suspect that leading anti-TNF players (Humira, Enbrel, and Remicade) may have made concessions to preserve market share and view Pfizer (NYSE: PFE) as the winner in this category as Xeljanz was added back to the preferred list.

Express Scripts 2017 exclusion list continues to include Horizon (NASDAQ: HZNP) Duexis and Vimovo, although HZNP indicated that it is still in discussions with ESRX and that those discussions have been constructive.

Valeant (NYSE: VRX) had one drug added to the exclusion list, actinic keratosis treatment Zyclara, and one drug removed from the exclusion list, acne treatment Benzaclin gel, according to Wells Fargo's David Maris.

Maris noted generic diabetes treatments alogliptin and alogliptin/metformin were added to the exclusion list this year. They note that Perrigo (NYSE: PRGO) is one of several generic companies which manufacture alogliptin and alogliptin/metformin

Express Scripts added a new drug class to the 2017 exclusion list: narcotic antagonists, or opioid overdose reversal treatments, Maris noted. Kaleo's Evzio, a naloxone auto-injector, is the excluded drug of the narcotic antagonist class. Alternatively, Express Scripts prefers physicians prescribe naloxone syringes and Narcan nasal spray. Adapt Pharma's Narcan nasal spray WAC price is currently $62.50 per treatment, while Amphastar's (NASDAQ: AMPH) naloxone syringe is currently priced at $33.00 per treatment.

Maris said of note Pfizer's (NYSE: PFE) rheumatoid arthritis treatment Xeljanz, which was not only removed from the restriction list but was also added to the preferred alternatives list. Eli Lilly's (NYSE: LLY) recently approved IL-17 antagonist for psoriasis, Taltz, was placed on the exclusion list, while its competitor from Novartis (NYSE: NVS), Cosentyx, is included as a preferred alternative.

Merck's Zepatier, Bristol-Myers' Daklinza, and Gilead's Sovaldi were all placed on the exclusion list for Hepatitis C treatments, while Abbvie's (NASDAQ: ABBV) Viekira Pak and Technivie are listed as the preferred treatments.

CVS 2017 Standard Formulary List of Removals and Updates

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Express Scripts 2017 Preferred Drug List Exclusions

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