PIED~
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`PHARMACEUTICALS
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`MEMORANDUM
`
`To: Maria Carell, AI Triunfo, Jeff Hostler, Joey Evans, Stuart Loesch
`
`From: Jeff Hofmeister
`Date: August 1, 2014
`
`Subject: CVS Caremark Formulary Decisions - 2015
`
`CVS Caremark
`CVS Caremark, the second largest PBM in the U.S. with approximately 60MM pharmacy lives,
`announced today their formulary exclusions for 2015. These changes will become effective January 1,
`2015. These products will be excluded on approximately 60% of the CVS Caremark lives.
`
`Dymista
`Dymista was excluded by CVS Caremark beginning in 2014 and will remain blocked in 2015.
`Fluticasone will remain in the generic tier while Nasonex remains the only Tier 2 Nasal Steroid on their
`formulary. The remaining Nasal Steroid branded products will also be excluded. In 2014 and now in
`2015, Dymista was placed in the Nasal Steroid market basket which required us to bid to replace
`Nasonex as the preferred formulary item (in an excluded category, they will only have one preferred
`product). We made numerous attempts to be moved to the nasal antihistamine category or to an
`exclusive category of our own but were not successful. In January of2014, Dr. Nancy Ruiz met with
`the Caremark VP of Pharmacy to discuss Dymista and its category placement. Despite these efforts we
`remained in the Nasal Steroid category.
`
`For the 2015 formulary year, we enhanced our rebate offers in an effort to replace Nasonex. We offered
`58% plus admin fee for Tier 2 and 15% plus admin fee for Tier 3. Feedback from the client this week
`regarding Dymista was: "Your rebate was phenomenal; however you still can't replace the Nasonex
`It's anticipated they will rebid the category when Nasonex goes generic.
`dollars".
`Currently, even with the restriction on 60% of their lives, approximately 39% of the Dymista
`prescriptions are adjudicating unrestricted. In Q1 2014 we paid rebates for Tier 3 (15% +Admin fee) on
`28,000 Dymista prescriptions. This does not include the number ofDymista prescriptions filled by use
`of the McKesson override program for claims that were blocked. We anticipate these numbers of
`adjudicated claims with Caremark to continue to grow.
`
`Aero span
`While historically the asthma category has seen little formulary management, we have seen that change
`drastically in the last 12-18 months. With recent additions to the category of Alvesco and now
`Aerospan, there are now 6 products in the category with no generics in the class. Discussions with
`customers have centered on the premise that they see no real differentiation and therefore are beginning
`to treat the category as more of a commodity. While you won't see the category limited to one product
`like we do for Dymista, you can expect to see limits and restrictions. With 6 products, payers can create
`
`HIGHLY CONFIDENTIAL-
`SUBJECT TO STIPULATED PROTECTIVE ORDER
`
`PLAINTIFFS'
`TRIAL EXHIBIT
`PTX0447
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`MEDA_APTX01921748
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`PTX0447 -00001
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`CIP2095
`Argentum Pharmaceuticals LLC v. Cipla Ltd.
`IPR2017-00807
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`a situation where companies have to bid against each other to be 1 of 4 on formulary, with the
`remaining products being blocked and restricted. Rebate percentages and prescription volume are both
`considered in the final determination of formulary inclusion.
`
`With the launch of Aerospan in April of2014, we have been adjudicating at Tier 3 unrestricted with
`CVS Caremark. That will continue for the balance of 2014. In January of 2015, Aero span will be on
`the excluded list in this category along with Alvesco. Tier 2 formulary products will be QV AR,
`Pulmicort Flexhaler, Asmanex and Flovent. The excluded formularies impact approximately 60% of
`the CVS Caremark lives. We will be Tier 3 on the balance of their lives.
`
`With the acquisition of Aerospan in October of2013 , we began to schedule appointments with payers to
`discuss formulary inclusion. We met with CVS Caremark in January of2014. Dr. Nancy Ruiz did the
`clinical presentation for the CVS Caremark, VP. of Pharmacy. Numerous subsequent meetings were
`held between our Account Manager and their contracting team. The 2015 bid requests came to us in
`May of2014. Knowing that this was going to be an excluded category we enhanced our bids to 47% +
`admin to be in the Tier 2 position and 20% + admin to be Tier 3 unrestricted. Feedback from the client
`indicated: "it was a fight to the end Our contract was good Very low volume killed us. Qvar was still
`the lowest net which means they went deeper than they did last year". If we can show increases in
`volume and a positive trend, we will have an opportunity again in 2016 to remove the restrictions and
`become a Tier 2 preferred product.
`
`I would anticipate approval rates for Aerospan to be similar to that ofDymista in 2015. Currently, we
`are seeing approximately 39% ofDymista prescriptions adjudicating at a Tier 3 position.
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`• Page 2
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`HIGHLY CONFIDENTIAL-
`SUBJECT TO STIPULATED PROTECTIVE ORDER
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`MEDA_APTX01921749
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`PTX044 7-00002
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`2
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