Navitus 2023 Drug Trend Report

You may recall that in July 2023, I shared news (see my post at https://blog.sstrumello.com/2023/07/navitus-2022-drug-trend-report.html for that) of a PBM 2022 "Drug Trend Report" which is still being published, specifically from the PBM known as Navitus Health Solutions. In recent years, Drug Trend Reports have been discontinued by many of the biggest PBMs (CVS Caremark, Cigna Express Scripts and United Healthcare OptumRx), but at least one of the smaller PBMs has still continued with the tradition. 

Navitus is one of the smaller PBMs, and its ownership structure is unique. In my prior coverage of (see HERE), and in my coverage of the release of the 2022 Navitus Drug Trend Report, I noted how Navitus is jointly owned by SSM Health, a not-for-profit health system [which has 65% ownership stake in Navitus] based in the midwest, and the retailer Costco Wholesale [which has a 35% ownership stake in Navitus]. For its part, Costco Wholesale has leveraged its co-ownership of a PBM to ensure that it, as a retailer, can avoid many of the unscrupulous PBM business practices which have driven other big retailers such as Target out of the pharmacy business completely. 

In essence, Navitus goes through every contract on behalf of Costco Pharmacy from bigger PBMs including CVS Caremark, Express Scripts and OptumRx in order to help to avoid bad contract language which might enable those PBMs to take advantage of a pharmacy retailer such as Costco Pharmacy. It can't completely avoid the games PBMs play, but having Navitus review each PBM contract enables Costco to avoid some of the most egregious contract terms.

Anyway, in 2024, Navitus published a newer version of its Drug Trend Report (see the Navitus press release at https://info.navitus.com/dtr-2023-snapshot and the executive summary of the 2023 Drug Trend Report itself at https://4437620.fs1.hubspotusercontent-na1.net/hubfs/4437620/2023%20Navitus%20Drug%20Trend%20Report%20Executive%20Summary.pdf to download a copy of its 2023 Drug Trend Report executive summary). 

To be sure, the Navitus 2023 Drug Trend Report has grown ever-smaller from previous years reports. But unlike its bigger rivals CVS Caremark, Express Scripts, and OptumRx, at least Navitus still made an effort to publish one, even if it's not very detailed as those reports once were.

On page 2 of the 2023 Navitus Drug Trend Report executive summary, you will observe something interesting: It says: 

"Significant Trend Driver: Glucagon-like peptide 1s (GLP-1s)". 

Of course, that failed to acknowledge how Costco itself had originally helped to drive that trend with its collaboration with Sesame Care, a telehealth provider who prescribes the newest, most expensive GLP-1s to anyone who asks for them (catch my coverage of that HERE for more, although it is no longer about pushing overpriced Novo Nordisk GLP-1s exclusively). 

The Navitus 2023 Drug Trend Report executive summary also adds:

"Due to varying coverage decisions by clients, GLP-1s for weight loss were not included in the Drug Trend Report, yet they still warrant thoughtful consideration and conversation in the overall picture of trend and future decisions."

It continued: 

"GLP-1s [for Type 2 diabetes] are also costly. Diabetic GLP-1 medications were the biggest contributor to trend growth in 2023, where this single class of medication increased the overall trend by 1.7%, even though less than 3% of our members used the medications."

 

Navitus said: "...to help clients control use to approved [Type 2] diabetes indication, Navitus implemented a pharmacy point-of-service diagnosis check. Those clients who implemented the point-of-sale utilization management control mitigated 30% of prescription fills by preventing those without an appropriate diagnosis." 

Aren't PBMs Supposed to Do That Automatically? Why's a Client Opt-In Required?

That sounds pretty much as if Navitus is verifying that a patient attempting to fill a prescription for a costly GLP-1 product such as Ozempic must properly coded to have a clinical diagnosis of Type 2 diabetes, or the prescription cannot be filled. This prevents off-label prescribing of T2D drugs for weight-loss. It's unclear how extensive that matter actually is. It could be an issue, but this type of diagnosis code cross-check is what PBMs claim they do on an automated basis. Hence, I question the necessity for clients "who implemented the point-of-sale utilization management control". Aren't PBMs supposed to be doing this automatically? Why must their clients "opt-in" for that?

Ryan Schmidt, Associate Director, Client Financial Support of Navitus, said in an interview (see https://www.navitus.com/in-the-news/increased-glp-1-drug-use-adds-to-navitus-2023-drug for her comments) citing data from the firm IQVIA which predicted that spending on the GLP-1 class of therapeutics was expected to grow by 378% to $8.1 billion by 2027, but Mr. Schmidt would only say that "there will likely be increased discussions about how to cover the GLP-1 therapies, especially in light of the added benefit they may have for some patients".

For the record, although Navitus laments the price tag of the newest branded GLP-1s for Type 2 diabetes, it also adds that Navitus Health Solutions doesn't have a single "preferred" GLP-1 brand. Instead, Navitus says it covers several different GLP-1 medications, including both the newer brand-name options like Ozempic (semaglutide) and Mounjaro (tirzepatide), as well as generic alternatives (such as liraglutide). Navitus said that its approach focused on providing cost-effective options, including generics and biosimilars, to ensure members have access to necessary medicines. In 2024, two generic/biosimilar versions of liraglutide hit the market (catch my most recent coverage of that HERE for more).

Under the heading of Medical Device, Navitus observes:

"The medical device category includes products such as continuous glucose monitors (CGMs) and wearable insulin pumps for patients with diabetes. CGMs are costly and may exceed $1000 per month. Usage of these devices grew by 50% in 2023, which contributed to increased spend in the category by 40% over the previous year."

To my knowledge, Navitus does not appear to collect "legally-exempted rebate kickbacks" for the purpose of "formulary exclusion" of non-preferred CGM brands as United Healthcare's OptumRx or Aetna/CVS Caremark currently do. At least that part is rational.

I reached out to Ryan Schmidt who works for Navitus at its headquarters in Madison, Wisconsin. Her title is not only Registered Pharmacist (RPh) but also Associate Director of Business Insights for the PBM. Her title is not only Registered Pharmacist (RPh) but also Associate Director of Business Insights for the PBM. I was curious to speak to her about things already available which have potential to bend the upward cost curve on GLP-1s such as generic versions of liraglutide (fka Victoza/Saxenda), and also if telemedicine ever comes up in the dialogue Navitus has with clients/prospects about the cost of GLP-1s, or if perhaps Navitus believes that maybe telemedicine really SHOULD come up since it is a known contributor to the prescription volume for the overpriced medicines? 

We know thanks to STAT News reporting that a small number of doctors, nurse practitioners, and physician assistants write almost ALL of the thousands of prescriptions for the numerous websites offering weight-loss drugs (see https://www.statnews.com/2024/10/17/telehealth-online-compounded-glp1-prescriptions-medical-groups/), and those telemedicine providers typically prescribe only the newest, most expensive GLP-1 inhibitors (generic companies don't pay for telemedicine providers, branded companies do), and in fact, those prescribers often try to dissuade patients who might inquire about generic alternatives from even considering those in spite of those being considerably less expensive.

I reached out to Ryan Schmidt to ask if she would comment on the Navitus "opt-in" requirement to ensure drugs for Type 2 diabetes are not improperly being prescribed without a diagnosis code of Type 2 diabetes might be used improperly for weight-loss without Type 2 diabetes, and also seeking answers to my questions about whether Navitus discusses any of the recently approved generic GLP-1s now available or whether they should be "preferenced" over more-costly newer GLP-1 products, but so far, I have not yet received a response from her or anyone else at Navitus, but I'd love to hear how the PBM responds.

Why I Pushed for the FTC Litigation Against the PBMs, While Diabetes Advocacy Orgs Did Not

As some of you who still follow me may realize, back in 2021, I set out to make sure the proper government agency addressed the wrongdoing going on in the U.S. insulin market. The reason Americans were paying insane prices for insulin (10 mL vials of widely-prescribed insulin varieties were being sold for more than $200 in the U.S., compared to about $37 to $48 in virtually every other country on earth) and that was because Americans were being forced to pay for bribes/kickbacks. Admittedly, they were "legally-exempted" kickbacks, but we were paying for bribes nevertheless, which was not only wrong (and patients were suffering for it), but quite likely illegal.

I set my sights upon the U.S. Federal Trade Commission (FTC). I had not initially considered FTC before, but it occurred to me that FTC was the only government agency which has the power to do it. This was the entity which broke-up AT&T (the old "Ma Bell") in 1984, where my father was employed for my entire childhood. 

Broadly speaking, the role of the FTC is to enforce federal consumer protection laws that prevent fraud, deception and unfair business practices. A new administration might try to change that role but that's the reason FTC exists (and by law, commissioners must be from both major political parties). The Commission also enforces federal antitrust laws that prohibit anticompetitive mergers and other questionable business practices that could lead to higher prices, fewer choices, or less innovation. Again, a new administration may attempt to re-write that reality, but that's the role which Congress established for the FTC when the FTC Act was passed into law back in 1914. 

Some of my move was due to a timing issue. 

I aimed to leverage laws which were already on the books to seek relief. You don't need to thank me; I acted as much in self-interest as in philanthropy. With a "conservative" in the White House and a Congress either unwilling and/or unable to address the issue, I planned to jump upon the issue as soon as President Biden was inaugurated in 2020. While anticompetitive issues should theoretically be important to conservative lawmakers as well, the practical reality was that big, monopolistic interests have bankrolled conservative political candidates who have vowed for the FTC to take a completely "hands-off" approach to unfair competition and monopolies. So, I acted when the political wind was at my back.

Ideally, diabetes nonprofit organizations should really have pushed for the same, but instead, the big ones (the American Diabetes Association [ADA] and Breakthrough T1D/JDRF) had not really taken much interest, even while they knew very well what was happening (bribery). 

Instead, the organizations like the ADA adopted a largely ineffective grassroots "Make Insulin Affordable" initiative (it was not even a campaign; see the press release at https://www.prnewswire.com/news-releases/american-diabetes-association-reaffirms-commitment-to-insulin-access-and-affordability-for-all--transparency-on-insulin-pricing-critical-300752216.html for more), but the initiative was mostly toothless, and nothing really happened. 

To its credit, I must acknowledge that Breakthrough T1D/JDRF did something which was strategically very effective, even if it took several years for patients to realize the benefit of what it did. 

Recall that on March 3, 2022, Breakthrough T1D (then known as JDRF) announced https://www.prnewswire.com/news-releases/jdrf-announces-support-of-civica-to-manufacture-and-distribute-low-cost-insulin-301495050.html (with specific details about intended pricing) along with nonprofit drug company partner Civica, Inc. (see Civica's concurrent press release at https://www.businesswire.com/news/home/20220303005321/en/Civica-to-Manufacture-and-Distribute-Affordable-Insulin/ for more, including the reveal that it was collaborating with an India-based company known as GeneSys Biologics to actually make the insulin API (the acronym for Active Pharmaceutical Ingredient) inexpensively enough to sell at those prices (and compete with Lilly, Novo Nordisk and Sanofi) announced it intended to introduce biosimilar versions of insulin glargine, insulin aspart and insulin lispro (better known by the trade names of Sanofi Lantus, Novo Nordisk Novolog and Lilly Humalog), which would be sold at a price of no more than $30/vial and $55/box of five prefilled disposable insulin pens, regardless of insurance status. Those biosimilar insulins are pending FDA approval decisions as I write this. But the intended effect has already happened. 

The Civica biosimilar insulin announcement was indeed very disruptive to the underlying pharmaceutical business, because it essentially established a cash price ceiling for most insulins sold in the U.S. Previously, insulin manufacturers had primarily used the rebate-contracting sales model promoted by the big Pharmacy Benefit Managers (PBMs) to sell insulin, with massive discounts given in the form of multi-million dollar cash-rebates (I refer to those rebates as "legally-exempted rebate kickbacks" because that is what they are, and if you describe them that way, no one including Federal lawmakers can misunderstand what they are) which may be (but very frequently were not) passed along to the covered patients. 

That Civica insulin move meant that every other biosimilar copy of insulins would be unable to sell their products for any more than $30/vial and $55/box of five prefilled disposable insulin pens. It also put incredible pressure upon Lilly, Novo Nordisk and Sanofi to effectively match those prices. The major insulin manufacturers had previously made moves to sell "unbranded" versions (these insulins are sold under the generic drug name, rather than the brand-name) of several (but not all) of their better-selling insulin analogues. That was done to avoid pissing-off the big insurance company affiliated PBMs.

The unbranded insulin (unbranded insulins are not actually generics or biosimilars because they are made by the innovator companies) initiative began in 2019 when Eli Lilly & Company, Inc. was the first to announce it would introduce a cheaper "unbranded" (sold under the generic drug name) version of Humalog (see https://www.prnewswire.com/news-releases/lilly-to-introduce-lower-priced-insulin-300805560.html for the press release). Rival Novo Nordisk copied the move very soon after (see https://www.prnewswire.com/news-releases/novo-nordisk-launching-additional-us-insulin-affordability-offerings-in-january-2020-300913167.html), although Sanofi did not do so until nearly two years later (see https://www.news.sanofi.us/2022-06-29-Sanofi-to-lower-out-of-pocket-cost-of-insulin-for-uninsured-patients-and-expand-access-in-underserved-communities for its announcement). Those efforts were an effort by pharma to try and circumvent the noncompetitive lock on U.S. insulin prices which PBMs had on the market, and they did work...well, sort of. 

Those unbranded insulin introductions were intended to help patients with access to products which were affordable, as long as patients knew where to look, and unfortunately, many did not, nor did pharma invest a penny to promote their existence. While the list price was about half of branded Humalog, savvier patients like me quickly discovered I could buy Lilly Insulin Lispro injection for about 75% less simply by also using a GoodRx coupon. That also happened with Novo Nordisk's unbranded insulins (which the company recently announced it would be discontinuing since its branded insulin price-cuts in the U.S. went into effect). Ditto for the Novo Nordisk Pharma Inc.'s unbranded insulins (being discontinued in 2025), and also unbranded Insulin Glargine Injection from Winthrop by Sanofi. 

But a year after Lilly introduced the "unbranded" version of Humalog, during a quarterly earnings call with investors, someone asked management for more info on what portion of sales were branded vs. unbranded, and surprisingly, Lilly management revealed that nearly one-third of domestic Humalog sales were the unbranded version of Humalog.

But it was really not until the insulin manufacturers themselves subsequently introduced their own manufacturer coupons (Lilly's coupons were/are offered at https://www.insulinaffordability.com/, Novo Nordisk's were/are offered at https://www.novocare.com/diabetes/help-with-costs/savings-offers.html, and Sanofi's were/are available at https://www.teamingupfordiabetes.com/sanofidiabetes-savings-program), which effectively made their unbranded insulin varieties at a cost of $35/vial or $55/box of 5 insulin pens, and those prices had become a de facto standard available to U.S. patients...again, provided they knew WHERE to look for them. So, I spent considerable energy to ensure people knew about them. Incidentally, today, we also have similar coupons on CGM sensors. And also on 'modern' glucagon rescue products. If you read the web page version (not on a mobile device) of this blog, you will find them all listed in the right-hand margin.

The American Rescue Plan of 2021 (see https://progressivepolicyinstitute.medium.com/are-we-on-the-cusp-of-a-new-drug-pricing-paradigm-fdf611c009b3 for details on how that worked) also played an important role, because that law eliminated a cap on drug rebates which were payable to MedicAID, starting on Jan. 1, 2024. In essence, the American Rescue Plan of 2021 eliminated a "cap" on rebates which were payable to Medicaid, meaning companies which sell older, but heavily-rebated (to PBMs) medicines such as insulin were faced with the prospect that they might actually be forced to PAY Medicaid for their rebated-drugs if their "rebate" marketing expense caused drug prices to rise faster than inflation, and there was no way pharma would ever do that. So, they slashed prices to avoid that predicament. That incentivized Lilly, Novo Nordisk and Sanofi (and to a slightly lesser extent, Biocon) to slash their insulin list prices in order to avoid negative pricing consequences.

So on March 1, 2023, in recognition of everything that was happening, Eli Lilly & Company, Inc. https://www.prnewswire.com/news-releases/lilly-cuts-insulin-prices-by-70-and-caps-patient-insulin-out-of-pocket-costs-at-35-per-month-301758946.html made the first move to slash insulin prices, then on March 14, 2023 Novo Nordisk, Inc. https://www.prnewswire.com/news-releases/novo-nordisk-to-lower-us-prices-of-several-pre-filled-insulin-pens-and-vials-up-to-75-for-people-living-with-diabetes-in-january-2024-301771409.html did the same, then on March 16, 2024 Sanofi-Aventis U.S. LLC (and its subsidiaries) https://www.globenewswire.com/en/news-release/2023/03/16/2629188/0/en/Press-Release-Sanofi-cuts-U-S-list-price-of-Lantus-its-most-prescribed-insulin-by-78-and-caps-out-of-pocket-Lantus-costs-at-35-for-all-patients-with-commercial-insurance.html all announced major list price cuts for their (but patent-expired) branded and unbranded insulins (duplicates sold under the generic drug name in an effort to bypass PBM-driven price markups). In order to pay for those deep price-cuts, the major branded insulin manufacturers would simply disintermediate the PBM's from the transactions (they would no longer pay PBM kickbacks). In other words, they would slash prices on patent-expired insulins, and to pay for the massive price-markdowns, they simply cut the PBM's out of the transaction by no longer paying them legally-exempted rebate kickbacks on insulins.

The FDA also played a small role to enable the biosimilar rush to happen. Specifically, the Affordable Care Act provision known as Biologics Price Competition and Innovation Act (BPCI Act) which became law in 2010 (see https://www.fda.gov/news-events/press-announcements/statement-fda-commissioner-scott-gottlieb-md-new-actions-advancing-agencys-biosimilars-policy AND https://www.fda.gov/news-events/press-announcements/statement-fda-commissioner-scott-gottlieb-md-agencys-continued-efforts-bring-competition-insulin for more) formally implemented a much-needed policy change. But the FDA waited for a decade before it acted, whereby it transitioned certain biological products currently approved as "drugs" under the Federal Food, Drug, and Cosmetics Act (FD&C) to be licensed as "biologics" under the Public Health Service Act (PHS), thereby making them subject to biosimilar competition for the first time. That enabled many biosimilar versions of bestselling insulins to have a viable approval pathway to market with the FDA, while it also enabled less costly competition to come to market for the first time. 

Right now, biosimilar insulins from Civica (via the company's CivicaScript operating unit), as well as from Sandoz, and also a number of copies of some (but not all) insulin analogues from such companies as Biocon, Lannett Company and Amphastar Pharmaceuticals all expect FDA approval decisions at any time, most likely starting in the first quarter of 2025. In addition, copies of all of the three bestselling insulins are also now in development from Chicago-based Meitheal Pharmaceuticals as well. 

That new reality essentially forced Lilly, Novo Nordisk and Sanofi to simply abandon the rebate-contracting sales model for insulins. Of course, Novo Nordisk (in particular) is still paying PBMs massive rebate kickbacks in order to keep all competing GLP-1 inhibitor drugs (including generics) "off-formulary" (it's almost as if Novo Nordisk's U.S. unit learned absolutely nothing from what happened on insulin sold in the U.S.).

But who was working to ensure that the horrendous wrongdoing from PBMs no longer happened? 

The answer is no one was. 

Really, the FTC issue should ideally have been advanced by Breakthrough T1D's Chief Global Advocacy Officer Lynn Star, Why that never came up remains a complete mystery to me. I did not bother waiting for that organization (or any other) to do it. Instead, I took it upon myself. So I stepped in, and I allied myself with various like-minded independent pharmacy organizations including the National Community Pharmacists Association (NPCA) to really push the FTC to investigate corporate wrongdoing at the biggest PBMs, not one single government entity or nonprofit organization was working on the illegal (or legally questionable) PBM activity. 

I worked to make that happen (and luckily, I was in a position to make it happen). It began when FTC held "open meetings" in 2020, and in every one of those meetings, someone spoke and mentioned PBM wrongdoing. It seemed very clear that an investigation of the PBM behaviors was in order. My motive was to end this criminal behavior, at least related to the sale of insulin.

On June 6, 2022, the FTC voted unanimously on a bipartisan basis (including both Trump-named FTC commissioners) to initiate a comprehensive 6(b) study of the Pharmacy Benefit Manager (PBM) Industry business practices (see the news release at https://www.ftc.gov/news-events/news/press-releases/2022/06/ftc-launches-inquiry-prescription-drug-middlemen-industry for more details). The FTC referred to that study as "FTC Matter No. P221200" and FTC released its Interim Report" https://www.ftc.gov/news-events/news/press-releases/2024/07/ftc-releases-interim-staff-report-prescription-drug-middlemen from that study on July 9, 2024. 

On September 20, 2024, the FTC filed a legal "complaint" (a lawsuit; see https://www.ftc.gov/news-events/news/press-releases/2024/09/ftc-sues-prescription-drug-middlemen-artificially-inflating-insulin-drug-prices for more) in Administrative Court alleging that CVS Health's Caremark Pharmacy Benefit Manager ("PBM") business, rival Cigna's Evernorth/Express Scripts PBM and another rival UnitedHealth's Optum Rx PBM business had all collectively accepted money in the form of multimillion dollar cash "rebate" kickbacks from drugmakers in exchange for keeping lower-cost insulin varieties off their preferred drug formularies (lists of approved drugs). See https://www.ftc.gov/news-events/news/press-releases/2024/09/ftc-sues-prescription-drug-middlemen-artificially-inflating-insulin-drug-prices for the court filing. The lawsuit also named their respective affiliated "Group Purchasing Organizations" [GPOs] — started in recent years to negotiate cash rebate payments with drugmakers — known as Zinc Health Services, Ascent Health Services, and Emisar Pharma Services respectively, which they now use primarily for "rebate aggregation". 

The FTC's Notice of Contemplated Relief is as follows:

1. Prohibit Respondents [the PBMs] from excluding or disadvantaging low Wholesale Acquisition Cost (WAC) versions of high WAC drugs made by the same manufacturers whenever the Respondent covers the high WAC drug on a formulary. In other words, the PBMs would not be permitted to exclude lower-priced versions of insulins such as Lilly's "unbranded" (sold under the generic drug name) insulin called Lilly Insulin Lispro Injection if they put branded Humalog on-formulary. Ditto for any "unbranded" insulins from Novo Nordisk, Winthrop by Sanofi, or Biocon.
   
   
2. Prohibit Respondents [the PBMs] from accepting compensation based on a drug's list price or a related benchmark.
   
   
3. Prohibit Respondents [the PBMs] from designing—or assisting with designing—a benefit plan that bases patients' deductibles or coinsurance on the list price, rather than the lower realized "net" cost after rebates.
   
   
4. Order any other relief appropriate to correct or remedy the Respondents' [the PBMs] violations. This would be using the Courts to ensure these relief efforts to happen.

The FTC press release on its litigation can be viewed at https://www.ftc.gov/legal-library/browse/cases-proceedings/221-0114-caremark-rx-zinc-health-services-et-al-matter-insulin but naturally, the PBM trade organization known as the Pharmaceutical Care Management Association (PCMA) and the individual PBMs countersued the FTC over its legal existence and for "defamation" among other things. 

However, the law firm known as Frier Levitt published an update on the status as of December 4, 2024 (see https://www.frierlevitt.com/articles/update-on-ftcs-lawsuit-against-three-largest-pbms-and-their-gpos/ for its write-up). Lawyers suggest the PBM countersuits are likely a possible delay tactic, as well as a message to the FTC that they will litigate to preserve their not-so-little kickback scheme for as long as possible.  But the consensus is the PBMs' odds of success are quite poor. This is now essentially a done deal. Bigger companies have tried and failed to fight the FTC. Among them include Standard Oil in 1911 and AT&T in the 1984, but they failed, and the PBMs will likely fail, too. 

I did this because the PBM behavior was (at best) on legally questionable ground, or more likely, was overtly criminal and anticompetitive behavior, and more importantly, it was screwing patients and employer healthcare plan sponsors alike out of money we were really entitled to. The laws were on the books for decades, and yet no one was enforcing those laws, so citizens like me helped make it happen. I only wish that some big diabetes advocacy organizations were willing to help me out, but they did not, so we patients were forced to do it on our own.

Again, you are welcome... 

Author P.S., January 14, 2025: As a second part of the FTC's 6(b) study (FTC Matter No. P221200), the Federal Trade Commission released a Second Interim Report on that study entitled "Specialty Generic Drugs: A Growing Profit Center for Vertically Integrated Pharmacy Benefit Managers" (see the press release HERE, and the report itself HERE) in which the largest PBMs were charged with unlawfully declaring many generic drugs as "Specialty Medications" to force covered patients to acquire those medicines from "Specialty Pharmacies" owned and operated by the PBMs themselves, and the PBMs marked the prices-up on what should have been inexpensive generic drugs by thousands of percents. 

Ask the FDA: Why Aren't the Insulin Biosimilars Coming? What the Hell is the Hold-Up?

Did you know that the U.S. Food and Drug Administration (FDA) has only approved TWO insulin biosimilars, both of which are copies of Sanofi's basal insulin branded as Lantus (insulin glargine)? Specifically, as of January 4, 2024, the only two FDA-approved biosimilar insulins are as follows:

1. Semglee (insulin glargine-yfgn, 100 Units/mL)

• Manufactured by Biocon Biologics Ltd. (originally sold by Viatris)
• FDA approved on July 28, 2021

2. Rezvoglar (insulin glargine-aglr, 100 Units/mL)

• Manufactured and sold by Eli Lilly & Company, Inc.
• FDA approved on November 30, 2022

Both biosimilars are copies of the exact same insulin (they're copies of Sanofi's Lantus) for which there is already considerable competition, and it is a basal-only (no biosimilar prandial insulins) insulin variety. 

Biocon also had a Novolog (insulin aspart) biosimilar in development, but that received a "Complete Response Letter" (CRL) from the FDA, which meant it was denied until certain issues had been successfully resolved first. But a number of other insulin biosimilars are currently pending FDA approval decisions, including even more additional copies of Lantus (insulin glargine) from Civica/GeneSys Biologics, Sandoz/Gan & Lee, Lannett Company/HEC, Amphastar/ANP, as well as copies of Novolog (insulin aspart) from Civica/GeneSys Biologics, Sandoz/Gan & Lee, Lannett Company/HEC, Amphastar/ANP, and copies of Humalog (insulin lispro) from Civica/GeneSys Biologics and Sandoz/Gan & Lee are all currently pending FDA approval decisions. Meitheal Pharmaceuticals is several years behind the other five companies, but it has biosimilars of Lantus, Novolog and Humalog also in development. I documented their development periodically, including my coverage HERE.

I would remind my followers that there are also several other insulin copies approved as "follow-on" biologic medicines because they attained approvals under a different regulatory pathway with the FDA. These insulins were originally approved under the Federal Food, Drug, and Cosmetics Act (FD&C Act), hence the FDA refers to them as "follow-on" biologic medicines rather than actual biosimilars. These follow-on insulin copies include:

➔ Basaglar (insulin glargine injection, 100 Units/mL)

• Manufactured and sold by Eli Lilly & Company, Inc.
• FDA approved on December 16, 2014

➔ Admelog (insulin lispro injection, 100 Units/mL)

• Manufactured and sold by Sanofi-Aventis LLC
• FDA approved on December 11, 2017

Recall that Sanofi introduced its copy of Lilly's Humalog branded as Admelog (insulin lispro) as kind of retribution against Lilly for selling its first copy of Lantus branded as Basaglar. Sanofi has its own proprietary prandial insulin branded as Apidra (insulin glulisine injection, 100 Units/mL) and a copy of someone else's prandial insulin might appear as cannibalization, although the fact that Apidra was on next to no insurance company drug formularies suggests that was really not a problem.

Insulin Was Trapped in a "No Generic" Zone for Complex Historical Reasons, But That's Now Over 

In spite of patent expirations, the regulation of insulin historically fell under section 505 of the Federal Food, Drug, and Cosmetic Act (FD&C Act), which allowed Eli Lilly & Co., Novo Nordisk, and Sanofi to avoid (and prevent) "generic" competition (insulin was a biologic regulated as a small-molecule drug). This changed with the passage of the Biologics Price Competition and Innovation Act (BPCI Act), a provision of the Patient Protection and Affordable Care Act (PPACA or ACA), signed into law on March 23, 2010. The BPCI Act allowed for the submission of a Biological License Application (BLA) for biosimilars (or interchangeable biological products) and mandated that certain biological products, including for insulin and human growth hormone must officially "transition" to being regulated as biologics under the Public Health Service Act (PHS Act). 

However, for a decade, the FDA had failed to implement these legally-mandated changes until March 23, 2020, under the leadership of Scott Gottlieb. For at least 10 years after it became law, FDA did virtually nothing to enable it. Congress allowed a transition period of "up to 10 years", and the FDA took the entire 10 years to implement those changes. In effect, FDA had finally moved to recognize that any insulin approved under the FD&C Act would thereby be recognized as a biologic by FDA, hence be eligible for biosimilars in accordance with the PHS Act as well as the BPCI Act.

Hints of FDA Backlog on Insulin Biosimilars?

Here's the thing: Biocon Biologics told investors that the company had first applied with the U.S. Food and Drug Administration (FDA) to sell a copy of insulin glargine injection in 2017. We also know that application was filed under the 505(b)(2) pathway, and that product received FDA approval for its version of insulin glargine, branded as Semglee, on June 11, 2020. All told, that suggested that it required about three (3) years from start to finish to receive FDA approval. But we now know with certainty that other insulin copies have been pending FDA approval decisions for at least that long. For example, among the publicly-held (or, in the case of Lannett Company, formerly publicly-held) companies which have already revealed they have biosimilar copies of insulin glargine pending approval have given us some more information.

On November 26, 2019, Lannett Company, Inc. (which as noted, at the time, was still a publicly-held company whose stock ticker was "LCI") revealed in an SEC filing (see https://seekingalpha.com/filing/4715183 for the filing itself) that it had entered into a new collaboration and license agreement with HEC with respect to the development, commercialization and distribution of HEC's insulin glargine product. In the company's 2021 annual report filed with the SEC, Lannett said the following:

"Additionally, we are focused on advancing our biosimilar Insulin Glargine and Insulin Aspart pipeline products. We filed our Investigational New Drug ("IND") application for Insulin Glargine in December 2021 to commence our pivotal clinical trial. This trial is ongoing and top-line results of the study are expected to be available at the end of calendar year 2022 [see the Press Release for more]. We anticipate filing the BLA for the biosimilar Insulin Glargine in early calendar 2023 and a potential launch in calendar year 2024. The biosimilar Insulin Aspart pipeline product is expected to potentially launch in calendar year 2025. We believe leveraging our existing relationships to collaborate on new opportunities will enable us to further strengthen our pipeline."

Assuming Lannett Company's management did not experience any unforeseen delays, then I think we can presume that sometime in early 2023, it had submitted its application for glargine's approval. On Wednesday, September 9, 2022, the periodical known as Drug Store News released a brief story which pretty much said it all in the story headline: "Lannett anticipates launching biosimilar insulin glargine in the first half of 2024" (see https://drugstorenews.com/lannett-completes-clinical-trial-subject-dosing-biosimilar-insulin-glargine for the article). Obviously, that did not happen in the first half of 2024, nor has FDA released any statements indicating it has rendered any approval decisions thus far. But if we assume a three-year turnaround time, then I think we can assume that if an application was submitted in Q1 2023, that would mean that sometime in Q1 2025 (between January and March 2025) we should have some announcement from FDA regarding Lannett's copy of insulin glargine.

This assumes Biocon's FDA approval timeframe for Semglee will be the same for other applicants. Lannett Company's insulin glargine biosimilar is currently still "under consideration" by the U.S. Food and Drug Administration right now. And so are those from Sandoz/Gan & Lee, as well as Civica/GeneSys Biologics, Amphastar Pharmaceuticals/ANP and several others. In my view, it looks like there is a backlog, and my question is when will we start receiving some actual FDA decisions?

Legally-Exempted Rebate Kickbacks Paid to PBMs Responsible for Insulin Price Inflation

Also, the byzantine rebate-contracting sales model promoted by largest Pharmacy Benefit Managers (PBMs) with their notorious "misaligned incentives" has been a major problem until quite recently. According to the Drug Channels Institute (DCI), the total value of manufacturers' gross-to-net reductions for all brand-name drugs in 2023 was a stunning $334 billion. Despite acknowledgement of the rebate problem from a Senate Finance Committee report on insulin prices, no meaningful legislation to change this broken dynamic had occurred until 2021 when Democrats in Congress passed the American Rescue Plan into law on a partisan vote (Congressional Democrats also passed the ACA which included the BPCI Act which formally legalized biosimilar medicines in the first place, and did so without a single Republican lawmaker voting with them on it). 

The End of the Insulin "Legally-Exempted Rebate Kickback" Scheme?

Interestingly, the American Rescue Plan (ARPA) of 2021, also eliminated a cap on drug rebates which were payable to Medicaid, starting on January 1, 2024. Previously, Medicaid rebates had been erroneously (or maybe not?) capped at 100% of the Average Manufacturer Price (AMP), while legally-exempted rebate kickback-driven list price inflation was included in prices which Medicaid patients paid for insulin. With the elimination of this ceiling, suddenly drug manufacturers with older, heavily-rebated drugs such as insulin were required to pay all rebates exceeding 100% of the AMP if the drug prices rose faster than the rate of inflation to Medicaid (and because of PBM demands for ever-higher rebates, that applied to insulin for the benefit of "formulary exclusion" of any and all competing insulin products). This change required branded insulin manufacturers to actually PAY Medicaid, instead of receiving payments for having their medicines on the list of Medicaid covered medications, thereby incentivizing them to slash their drug list prices in order to avoid negative pricing consequences (see https://progressivepolicyinstitute.medium.com/are-we-on-the-cusp-of-a-new-drug-pricing-paradigm-fdf611c009b3 for details). 

In addition, the Federal Trade Commission (FTC) took legal action on September 20, 2024, suing the largest PBMs over their role in distorting U.S. insulin prices (see https://www.ftc.gov/news-events/news/press-releases/2024/09/ftc-sues-prescription-drug-middlemen-artificially-inflating-insulin-drug-prices?form=MG0AV3 for more about the litigation, and https://www.ftc.gov/legal-library/browse/cases-proceedings/221-0114-caremark-rx-zinc-health-services-et-al-matter-insulin for the actual court filing), while leaving open the potential to also sue branded insulin manufacturers for their role in those market distortions. 

Without reiterating a topic I've covered extensively in the past, suffice to say, the PBM rebate-contracting sales model for insulin now appears to be essentially dead for the insulin therapeutic category of drug. 

However, there are some hints that the PBMs such as CVS Caremark (via a new unit which the company calls Cordavis; see https://www.prnewswire.com/news-releases/cvs-health-launches-cordavis-301908281.html for more info on Cordavis, and key rivals including both Cigna Evernorth/Express Scripts' PBM business which has a similar unit based in the pharma hub (LOL!) of the Caynan Islands known as Quallent Pharmaceuticals, while United Healthcare's Optum PBM has a similar unit it calls Nuvalia, and they may instead consider selling PBM-branded insulins [and/or store-branded in the case of CVS]), similar to what they are now doing with Humira (adalimumab) biosimilars today. Sandoz is one entity supplying one of Cordavis' deeply-discounted Humira biosimilars branded as Hyrimoz (adalimumab-adaz), and its relevant to acknowledge that presently, Sandoz/Gan & Lee also now has biosimilars of Lantus, Novolog and Humalog currently pending FDA approval decisions. Once approved. Cordavis, Quallent or Nuvalia could just slap their own label on Sandoz/Gan & Lee-made (or any of the others) biosimilar insulins.

FDA, Staffed Largely with Ex-Pharma People, Has Historically Been a Pharma/Biotech Ally, Often Working Against Patients on Issues (other than on safety/efficacy) to Advance Pharma Business Interests

However, the FDA has historically and knowingly obstructed progress and protected the interests of major insulin manufacturers. Notably, FDA took over a decade to implement the changes mandated by the ACA's BPCI Act, delaying necessary (and required) regulatory transitions. However, I suspect much of that was due to former Principal Deputy Commissioner of FDA Janet Woodcock's leadership. But Dr. Woodcock announced her planned retirement in November 2023, and since then, she has since been replaced with a woman named Namandjé N. Bumpus. It is unclear how Dr. Bumpus might re-prioritize or modify FDA operating procedures, but without the pro-pharma/biotech Janet Woodcock calling the shots at the FDA, change seems virtually inevitable. 

More Potential Changes with a New Trump Administration?

Something else: a new think tank called "Paragon Health Institute" https://paragoninstitute.org/, founded by an adviser under Trump's first administration may help shape health policy under a new Trump admin (not that they have a real record of any meaningful accomplishment in health policy; look at its questionable response to COVID-19 as proof).

Paragon makes economic arguments for changes in health policy. In particular, Paragon founder Brian Blase is critical of what he calls "wasteful" expanded pandemic-era subsidies that have helped people buy insurance through the Affordable Care Act (apparently, corporate welfare is good, but welfare for U.S. citizens is bad in Paragon's view). He says those subsidies should be allowed to expire after 2025. However, given that the blueprint for the ACA was taken directly from the conservative Heritage Foundation (when that organization still did policy development), beyond eliminating subsidies or maybe trying to impose work requirements (a requirement which most recipients actually satisfy), it's hard to envision much more on that front they could actually do.

But it could potentially turn attention back on PBMs' role in inflating U.S. prescription drug prices, especially with such people (whom I admire) like Johns Hopkins' Ge Bai as a policy advisor to Paragon (see her bio at https://carey.jhu.edu/faculty/faculty-directory/ge-bai-phd for details). 

Article source:
https://www.npr.org/2024/11/26/nx-s1-5183231/a-look-at-the-think-tank-that-may-shape-trumps-health-policies 

That said, the FDA really appears to be delaying new biosimilar insulin approval decisions, having approved zero during the past few years in spite of having quite many applicants. Recall that in 2019, FDA had formally issued Draft Guidance for Biosimilar Insulin Makers intended to help facilitate the development of biosimilar insulin products, and yet FDA has not approved a new insulin biosimilar since 2022. Perhaps COVID-19 slowed things down for a year or two, but it is 2025 now. The FDA has had several years to work through any backlog. The holdup seems to be with the FDA itself, not with the applicants.

Let me also add that none of these are NEW molecules, they are copies of already existing molecules. As long as the applicants can satisfy the requirements the FDA outlined in its guidance, then we should be nagging our lawmakers on what the heck is taking so damn long?! 

FDA Approves Second Generic GLP-1 Inhibitor; Prices Expected to Drop Further

On December 23, 2024, the FDA approved the first true generic copy of the GLP-1 inhibitor liraglutide (see the FDA press release at https://www.fda.gov/news-events/press-announcements/fda-approves-first-generic-once-daily-glp-1-injection-lower-blood-sugar-patients-type-2-diabetes for details), which will be commercialized by Hikma Pharmaceuticals USA. This version of the drug, prescribed for Type 2 diabetes and branded as Victoza by Novo Nordisk, marks a significant milestone. Generic copies of the weight-loss version, which was branded by Novo Nordisk as Saxenda, is also expected to come to market in the future. That's where the real money is. But the FDA prioritizes the review of generic versions of drug classes in shortage, such as GLP-1 inhibitors, which have become very popular for weight-loss.

Hikma's generic version of liraglutide will be the second copy of Victoza/Saxenda on the U.S. market. Teva Pharmaceuticals introduced the first version on June 24, 2024, but it was an "authorized generic" rather than a true generic (see the press release https://www.businesswire.com/news/home/20240623654311/en/Teva-Announces-Launch-of-Authorized-Generic-of-Victoza%C2%AE-liraglutide-injection-1.8mg-in-the-United-States for more). Authorized generics are identical to branded drugs but sold under the generic name with the brand company's permission, while true generics are made without the brand drug company's permission. Teva's version of liraglutide uses Novo Nordisk's proprietary FlexPen devices, whereas Hikma's version will be the first true generic copy. Other companies, including Biocon, Amphastar Pharmaceuticals, Lannett Company, and Sandoz, are all expected to introduce their versions of liraglutide very soon. Some, such as Sandoz, are also likely to have other versions of patent-expired GLP-1s, such as Lilly's Trulicity (known generically as dulaglutide, but that never had a weight-loss version) as well.

Academic research has shown that GLP-1 inhibitor prescription growth is driven by demand for weight-loss drugs rather than Type 2 diabetes treatment (catch my coverage at https://blog.sstrumello.com/2024/08/glp-1-inhibitor-demand-shows-strong.html). Many people use the diabetes versions to lose weight due to shortages of obesity versions, but make no mistake: virtually all of the demand for GLP-1s is from people without Type 2 diabetes who want drugs to help them lose weight.

Much of this demand can be attributed to questionable telehealth providers who prescribe branded GLP-1 inhibitors without even patient examinations. A STAT examination found that a small number of doctors, nurse practitioners, and physician assistants write almost all of the prescriptions for the numerous websites offering weight-loss drugs (again, see https://www.statnews.com/2024/10/17/telehealth-online-compounded-glp1-prescriptions-medical-groups/).

Novo Nordisk aims to make its overpriced new GLP-1 inhibitor semaglutide (Ozempic for T2D, Wegovy for obesity) the only such drug available. Importantly, telehealth firms rarely ever prescribe cheaper, patent-expired GLP-1 inhibitors like liraglutide, focusing only on the newest, most expensive versions. Preliminary research also suggests Teva's liraglutide offers only a 17% discount compared to branded Ozempic/Wegovy which is miserly savings.

The FDA's research shows that greater generic competition leads to lower drug prices. A September 2024 report estimated that the 742 generic drug applications approved in 2022 yielded $18.9 billion in savings, with $5.2 billion from first generic approvals (see the report at https://www.fda.gov/about-fda/center-drug-evaluation-and-research-cder/generic-competition-and-drug-prices?form=MG0AV3). Importantly, the research proves that more competition from generics will continue to drive prices down further, benefiting consumers. FDA's studies also consistently show that more competition from generic drugs leads to even lower drug prices, meaning the more generic competition which emerge, the lower the average price patients end up paying. The following image depicts how prices fall with each new generic competitor on the market. It visually shows how much prices fall with each additional, new generic hits the market.

Key Points:

• More Generic Competition Incoming: Hikma's version is the first true generic, while Teva's June 2024 launch was an "authorized generic" packaged in Novo Nordisk's pen devices. Biocon, Amphastar, Lannett, and Sandoz are also developing generics. Sandoz is forecasting that generic GLP-1s will generate 69% of the company's revenues by 2029.
  
  
• FTC Helped Expedite Competition: The FTC challenged Novo Nordisk's illegal attempt to preclude generic competition by illegally listing patents on pen injector devices. The FTC's dispute of those wrongful Orange Book patent listings allows for faster generic development. For more details, see my coverage https://www.linkedin.com/pulse/ftc-challenge-pharmas-improper-fda-orange-book-patent-scott-strumello-h6ede/ and/or https://blog.sstrumello.com/2024/04/ftc-again-polices-fdas-laziness-with.html (they are the same article).
  
  
• GLP-1 Inhibitor Demand Driven by Weight-Loss, Not Type 2 Diabetes: Research shows most prescriptions come from telehealth providers for weight loss, not from diabetologists for blood sugar control (see https://www.acpjournals.org/doi/10.7326/M24-0019 for reference).
  
  
• Telehealth Focuses on Expensive, Branded Drugs: But telehealth providers usually only prescribe the newest, most expensive GLP-1 inhibitors like Ozempic/Wegovy (semaglutide) and avoid cheaper generics like liraglutide.
  
  
• Generic Competition Lowers Prices: FDA studies show increased generic competition leads to substantial drug price reductions. A September FDA 2024 report (see https://www.fda.gov/about-fda/center-drug-evaluation-and-research-cder/generic-competition-and-drug-prices?form=MG0AV3) estimated $18.9 billion in savings from 2022 generic approvals. 

Novo Nordisk's thinly-veiled efforts to maintain sky-high prices on its GLP-1s by paying PBMs legally-exempted rebate kickbacks prevent all competing drugs in the same drug class from receiving insurance company formulary placement (including first-generation GLP-1 inhibitors like liraglutide) may run afoul of the FTC litigation against the PBMs on insulin (catch my coverage on that at https://blog.sstrumello.com/2024/09/the-ftc-sues-big-3-pbms-and-pharma.html for more, and also see https://www.ftc.gov/news-events/news/press-releases/2022/06/ftc-ramp-up-enforcement-against-illegal-rebate-schemes/ for more about how pharma may not be exempt even though FTC was focused on PBM behavior). FTC has not (yet) sued any drug companies for these rebating practices, but it has threatened that it could because it is anticompetitive behavior. Of course, most people using the weight-loss versions of the GLP-1 inhibitor drugs are paying cash because insurance won't cover drugs prescribed for cosmetic purposes. But the FDA's approval of Hikma Pharmaceuticals' liraglutide is just the beginning of increased competition that will make these medications far more affordable and accessible.

Insulin Has Become Commoditized; What That Means for New Insulin Developments

On December 5, 2024, the media reported (see https://www.fiercepharma.com/pharma/novo-nordisk-slashes-prices-more-insulin-products-not-until-2026 for one such article) that Novo Nordisk would reduce U.S. list prices on several insulin products by more than 70%, effective January 2026. The new list price for Fiasp will drop from $289.36 to $72.34 per 10 mL vial, and Tresiba will decrease from $338.95 to $94.29 per 10 mL vial (see https://www.novonordisk-us.com/media/news-archive/news-details.html?id=915073 for more). Pens will remain about 40% more costly than vials of the same insulins. Novo Nordisk will also stop selling unbranded versions of Novolog and Tresiba.

These price reductions were initially announced in 2023 when Eli Lilly & Company declared (see https://www.prnewswire.com/news-releases/lilly-cuts-insulin-prices-by-70-and-caps-patient-insulin-out-of-pocket-costs-at-35-per-month-301758946.html for the press release) it would cut its insulin list prices by over 70% on March 1, 2023. Following Lilly’s announcement, Novo Nordisk (see https://www.prnewswire.com/news-releases/novo-nordisk-to-lower-us-prices-of-several-pre-filled-insulin-pens-and-vials-up-to-75-for-people-living-with-diabetes-in-january-2024-301771409.html for its announcement) and Sanofi (see its press release at https://www.globenewswire.com/en/news-release/2023/03/16/2629188/0/en/Press-Release-Sanofi-cuts-U-S-list-price-of-Lantus-its-most-prescribed-insulin-by-78-and-caps-out-of-pocket-Lantus-costs-at-35-for-all-patients-with-commercial-insurance.html for more) made very similar statements. 

However, these cuts were not due to government policy, but rather a strategic move to bypass PBMs and reduce artificially inflated prices caused by rebate demands. Prescription drug rebates, amounting to $334 billion collectively across all drug classes in 2023 (see https://www.drugchannels.net/2024/07/pbm-power-gross-to-net-bubble-reached.html for the source where I attained this figure), are classified as "legally-exempted rebate kickbacks" from the Federal Antikickback Statute thanks to a special "safe-harbor exemption" implemented by the Office of Inspector General for the U.S. Department of Health and Human Services, and I have coined that term ("legally-exempted rebate kickbacks") because it's the best description of exactly what they are and no lawmaker could mistake what you mean when you refer to them in that manner.

The American Rescue Plan of 2021 also influenced these changes, requiring companies selling drugs with very high list prices and significant rebates to lower prices drastically in order to avoid negative pricing consequences (see https://www.kff.org/policy-watch/what-are-the-implications-of-the-recent-elimination-of-the-medicaid-prescription-drug-rebate-cap/ for more background) which University of Southern California's Dr. Robert Popovian, Erin Delaney, and Dr. Michael Mandel eloquently wrote about (see https://progressivepolicyinstitute.medium.com/are-we-on-the-cusp-of-a-new-drug-pricing-paradigm-fdf611c009b3 for more). In essence, what the American Rescue Plan of 2021 did was eliminated a cap upon which rebates would have to be reimbursed to Medicaid. However, in spite of what it is now doing with insulin, Novo Nordisk nevertheless continues to pay "legally-exempted rebate kickbacks" to PBMs for formulary exclusion of rival GLP-1 inhibitors, in order to maintain its market dominance by keeping cheaper generic (copies of the GLP-1 inhibitor drug known as Saxenda/Victoza have been sold since June 2024) alternatives "off-formulary" to prevent patients from having access to older (but still-efficacious) medicines in the same drug class at much lower prices.

Novo Nordisk’s insulin price cuts come as the company pivots towards more profitable weight-loss drugs. The company has subtly shifted its identity from the world's largest insulin manufacturer to a company which makes "chronic disease medications". This change aligns with Novo Nordisk’s awareness of pending FDA approval for many insulin aspart copies and the development of at least one Tresiba copy from Amphastar Pharmaceuticals/ANP. With competitors like Biocon, Sandoz/Gan & Lee, Amphastar Pharmaceuticals/ANP, Lannett Company/HEC, CivicaRx-CivicaScript/GeneSys Biologics, Meitheal Pharmaceuticals/Tonghua Dongbao and others all developing biosimilar insulin products, Novo Nordisk aims to capture dominant market share in the lucrative weight-loss drug segment instead. Rival Lilly, on the other hand, is bypassing the rebate-kickback marketing channel and instead is using its LillyDirect initiative to bypass the kickback-driven price inflation, hence it sells Mounjaro/Zepbound for far less money using a direct-to-consumer model. It also recently introduced a smaller vial size of those products in order to reduce patient out-of-pocket costs for them.

The commoditization of insulin means that while U.S. patients should continue to have access to insulin through nonprofit suppliers like Civica, the exit of major insulin manufacturers could stifle innovation. Novo Nordisk’s focus on weekly basal insulin icodec (to be branded Awiqli), primarily for Type 2 diabetes patients (see https://www.medpagetoday.com/endocrinology/type1diabetes/110337 for more) exemplifies this shift. Without significant investment from companies like Novo Nordisk and rivals Lilly and Sanofi, future insulin innovations may depend on academia or unprofitable startups like Sensulin.

Because Civica is a nonprofit company (Breakthrough T1D/JDRF funded the development of its 3 insulin biosimilars currently pending FDA approval decisions), Civica is unable to fund R&D into any new insulins, leaving patients' future insulin needs to the academic sector unless a startup such as Sensulin makes meaningful progress which giant Novo Nordisk had failed to do.

Murder of Brian Thompson, CEO of UnitedHealth Group a Sad Commentary on the State of U.S. Commercial Healthcare Insurance

On Wednesday, December 4, 2024, the United States witnessed a shocking act: Brian Thompson, CEO and Executive Vice President of UnitedHealth Group (parent company of UnitedHealthcare), was shot and killed outside a Hilton Hotel in New York City where the company's annual investor conference was scheduled to occur. 

Brian Thompson, CEO and EVP of UnitedHealth Group

The NYPD very quickly determined that the killing was a "premeditated," "preplanned," and "targeted" attack, noting the suspect appeared quite "proficient with firearms" based on surveillance footage (which showed him quickly resolving an issue which could have caused someone inexperienced with firearms to have been unable to resolve the issue quickly) from a nearby Starbucks. 

Authorities then released two new photos (see the first photo and the second photo using the UPI links) with a clearer view of the suspect's face a day after publishing initial photos that showed his face partially obscured by a ski mask, and asked for the public's help in locating him via their Crime Stoppers hotline and website. Police have also searched a hostel on Manhattan's Upper West Side where the suspect was believed to have been staying, CNN reported.

The published whereabouts of Mr. Thompson, a very senior executive of a large, publicly-held company, made him a public target. He was fatally shot by a masked gunman wielding a pistol with a silencer as he approached the hotel on West 54th Street, near 6th Avenue, for the investor meeting. The shooter fled on a bicycle into Central Park and remained at large the next day. Unlike some other publicly-held companies with known threats, UnitedHealthcare did not provide its CEO with special protections.

Mr. Thompson's wife, Paulette Thompson, told NBC News that he had been receiving threats. "There had been some threats," she said in a phone call. "Basically, I don't know, a lack of coverage? I don't know details. I just know that he said there were some people that had been threatening him."

Despite New York City's comparatively lower violent crime rate compared to most other big U.S. cities, it is not immune from public shootings. For instance, the singer/songwriter and former member of "The Beatles" John Lennon was shot and killed outside his residence at The Dakota high-rise apartment in 1980. The singer's widow Yoko Ono, remained in the same apartment in New York until 2023, when she moved to a farm in upstate New York. Lawmakers have long complained about weapons and ammunition brought into New York from states with much weaker gun laws in an effort to bypass tougher local gun laws and those complaints have merit.

The Associated Press initially reported that shell casings from Brian Thompson's killing had the words "deny," "defend," and "depose" written on them, which other media outlets concluded came from the title of a 2010 book entitled "Delay Deny Defend," written by Jay M. Feinman, a Distinguished Professor of Law at Rutgers, The State University of New Jersey, School of Law at Camden. That book's subtitle was "Why insurance companies don't pay claims and what you can do about it."

According to Katie Couric Media: "The suspect, who fled the scene on a CitiBike bicycle, was last seen in Central Park. (Lyft, which runs CitiBike, has already said it plans to assist law enforcement in their investigation, which could be a valuable asset. The company can track the shooter's location and potentially their identity.) " On the latter, if the individual used a prepaid Visa/MasterCard/American Express card, their identity might not be revealed or could be bogus.

UnitedHealthcare has grown significantly (largely through acquisitions) over the years, even now owning entities like Optum Bank which bank regulators could demand divestiture of if they really looked at their own regulations. Companies such as GE were forced to divest its banking business under the same rules. The company really has become "too big to fail" and now faces challenges in maintaining profitability, instead turning to control other aspects of the U.S. healthcare system to keep the profits flowing into the company's bottom line. As of 2023, approximately 10% of all U.S. physicians were employed by [or affiliated with] UnitedHealthcare's Optum unit. But federal and state regulators are starting to notice the company's monopolistic practices and they don't like what they see.

For example, in October 2024, the U.S. Department of Justice investigated whether UnitedHealthcare's acquisitions had violated antitrust laws. The Wall Street Journal reported that the DOJ was examining the company's Medicare billing practices and the impact of its doctor-group acquisitions on rivals and consumers. Then, in September 2024, the FTC sued UnitedHealthcare's OptumRx Pharmacy Benefit Manager (PBM) business for negotiating practices that resulted in artificially-inflated insulin prices, leading to a 1200% increase in insulin prices over the past decade. These practices are now under scrutiny, with the FTC challenging their legality.

The murder of Brian Thompson highlights a very dark outcome of the U.S. commercial healthcare insurance industry's current business practices. Gizmodo (see https://gizmodo.com/unitedhealthcare-ceo-fatally-shot-gunman-still-at-large-2000534123 for the article) documented how politicians from Mr. Thompson's home state of Minnesota had posted sympathetic messages on social media, but those initial responses of support were very quickly drowned out by a very different tone, as people shared horror stories of being denied coverage (including the deaths of loved ones) by the health insurance company and made morbid jokes comparing the CEO's death to the ways they'd been mistreated by the U.S. healthcare system.

For example, the Facebook post by UnitedHealth Group, the parent company of UnitedHealthcare, said it was "deeply saddened and shocked at the passing of our dear friend and colleague Brian Thompson." But that post had garnered over 11,000 laughing emojis as of the time of the article's writing, far outweighing the more somber emojis used to express condolences. Comments were subsequently turned off for that post, but shares included comments like "I would offer thoughts and prayers but they are not covered as they are out of network."

Buzzfeed and Huffington Post reported that even after commenting on the United Healthcare post was disabled, people still managed to express their feelings using emojis. All told, the announcement of Mr. Thompson's death was met with somewhere between 71,000 and 90,000 "laughing" emoji responses, which says a lot about how much the company and its business practices are disliked.

Last November, the estates of two former UHC patients filed a lawsuit in Minnesota alleging that the insurer had used an AI algorithm to deny and override claims to elderly patients that had been approved by their doctors. Also, United Healthcare laid-off thousands of nurses who were previously on-staff to handle claims denials because of the AI which Brian Thompson was directly responsible for implementing at United Healthcare. Those laid-off nurses were among the thousands of people who responded to the United Healthcare announcement with a "laughing" emoji about Mr. Thompson's murder.

As STAT News wrote about the announcement from United Healthcare:

"But instead of eliciting sympathy, it opened the floodgates for an outpouring of rage, captured across social media and online forums, over the healthcare system — one that charges people the highest prices in the world, erects financial and bureaucratic barriers to getting care, and has plunged millions of people into debt."

Since then, Healthcare Dive and other media outlets including Gizmodo have documented how other commercial healthcare insurance companies have removed their senior executive bios from their websites, as if that information could not easily be found on the companies' SEC Edgar filings anyway.

Another social media platform also owned by Meta, specifically an Instagram post from the company was similarly locked down, stopping average users from commenting directly, although other posts on the platform also had scathing comments. On a post from last week, which discussed ways to manage holiday stress, commenters didn't hold back: "My empathy is out of network for this one."

"Sorry. But my insurance and Medicaid don't cover Thoughts and Prayers," read one comment with hundreds of likes, echoing the sentiment that had turned into a meme.

"Judging by the public reaction I think the bigger story should be why this doesn't happen more often," read another comment.

Other comments got more personal, with people sharing their stories of being denied coverage by UnitedHealthcare and having to pay large sums of money in order to survive: 

"My uncle paid you guys for 22 years without missing a single payment and then when he died you denied his life insurance claim. You even had the nerve to cash a check from him the week he died. Scum bags. Sometimes you get what you deserve. I hope all of you suffer the way my mom has for the past year she has had to endure the nightmare of losing her brother and then almost filing for bankruptcy due to your denial of a life insurance claim paid punctually and faithfully for 22 years. Then you turn around and spit on his corpse. Your empathy claim has been denied. I hope you all get what's coming."

Others made dark jokes: 

"seems like that hole in his chest was a pre-existing condition. You gonna have to deny coverage."

The New Yorker made the following observation (see HERE):

"Of course, the solution, in the end, can’t be indifference—not indifference to the death of the C.E.O., and not the celebration of it, either. But who's going to drop their indifference first? At this point, it's not going to be the people, who have a lifetime of evidence that health-insurance C.E.O.s do not care about their well-being. Can the C.E.O. class drop its indifference to the suffering and death of ordinary people? Is it possible to do so while achieving record quarterly profits for your stakeholders, in perpetuity?"

My assessment is that the responses to the murder of UnitedHealthcare's CEO Brian Thompson is a new and ugly indictment of the U.S. commercial healthcare insurance industry's current business practices. Until federal lawmakers are willing to address the healthcare colossus it has enabled to grow under lax enforcement of laws already on the books, this type of response should not be viewed as completely unanticipated.

Author P.S., December 10, 2024: The Associated Press reports that a 26-year-old suspect, identified by police as Luigi Nicholas Mangione, was taken into custody after police received a tip from employee that they believed the suspect was eating at a McDonald's in Altoona, Pennsylvania called them. Mr. Mangione was arraigned in Pennsylvania and was charged with two felonies — forgery and carrying a firearm without a license — and three misdemeanors — tampering with records or identification, possessing instruments of crime, and false identification to law enforcement — according to a criminal complaint. Mangione had clothing and a mask similar to those worn by the shooter in his possession, and a fraudulent New Jersey ID matching one the suspect used to check into a New York City hostel prior to the shooting. Mangione had in his possession what was identified as a "ghost gun", a type of weapon that can be assembled at home from parts without a serial number, making the weapons difficult if not impossible to trace, investigators said. The criminal complaint said that the gun and the silencer had been 3-D-printed, likely using plans readily available on the internet. Mangione was born and raised in Towson, Maryland (an affluent Baltimore suburb), has ties to San Francisco, California and a last known address in Honolulu, Hawaii. Mr. Mangione attended an elite Baltimore prep school known as the Gilman School, graduating as valedictorian in 2016. He then went on to earn undergraduate and graduate degrees in computer science in 2020 from the Ivy League University of Pennsylvania (not to be confused with the large state school known as Penn State University). Mr. Magione had reportedly undergone back surgery last year and he suffered from "debilitating pain" at times. Mangione's family hadn't heard from him in "several months" following his back surgery.

What the CVS Health CEO Shuffle Has to Do With Emerging Consumer AI Tools

As my readers know, just a few weeks ago, I blogged about how Artificial Intelligence (AI) tools are starting to emerge which can help ordinary consumers/patients navigate the overly-complicated U.S. Healthcare space. For example, I wrote about a clever AI tool called "Fight Health Insurance" which will take commercial healthcare insurance denial letters and enable patients to scan those letters, answer a few questions, and get nearly-instant appeals letters they can snail-mail to their insurance company's appeals department which I blogged about at https://blog.sstrumello.com/2024/09/harness-ai-artificial-intelligence-to.html which are kind of interesting, are driven by actual patients and can potentially save you some time in a laborious aspect of the U.S. healthcare system, which is appealing "adverse decisions" denying care which your doctor has prescribed.

But while AI can compose seemingly well-written text (with occasional errors; the AI tools which exist as of autumn 2024 are certainly not foolproof), for some things which I use my computer for, I am finding many AI tools have certain guard-rails meant to protect companies' advertisers from their own AI tools. Those guard-rails act as impediments to accessing information in order to protect their own advertising dollars.

For example, I am not a paid subscriber to any healthcare publications, however, sometimes I have found that I can retrieve the entire text (or much) of some entire articles simply by going to the html version of the a webpage for an article using my laptop (powered by Microsoft Windows; I have no clue about doing it on Apple Macintosh computers; I've also been unable to do so on mobile devices such as smartphones or tablet computers) by hitting "CTRL" and "U" concurrently and then using the search function to look for some of the article text which appears on the preview. That method helps me find the text in seconds, then I copy the text (including the html formatting), paste it into Notepad, and then I would manually strip-out all of the html formatting code (eliminating any text formatting or links in the article), and voila, on certain publications such as Crain's Modern Healthcare, I have been able to find the text for entire articles. Why not harness AI tools to do that and save myself some time? In theory, it sounds nice, although it doesn't always work out, it depends on exactly how the publications paywalls function.

For example, last week, Crain's Modern Healthcare magazine published an article about the Wall Street response to the CEO shakeup at CVS Health. For an investment of about 5 minutes of my time, I was able to use that method to retrieve the full text of the article, and I did little more than copy the raw html and then manually stripped the html code out, or in this case, I used AI tools to strip-out the html formatting on my behalf.

Wall Street weighs in on CVS Health CEO shakeup 
Lauren Berryman, Modern Healthcare by Crain's
October 18, 2024

Article link:
https://www.modernhealthcare.com/insurance/analysts-cvs-health-karen-lynch-david-joyner-aetna 

With Karen Lynch out and David Joyner up at CVS Health, Wall Street analysts expressed mixed sentiments about the company’s decision to promote internally but haven’t changed their long-term outlook on the healthcare giant.

Lynch, whom Joyner replaced as president and CEO on Thursday, faced a deluge of challenges during her three-year tenure leading CVS Health. Issues have grown more acute the past two years as its health insurance subsidiary Aetna endures high medical costs and ousted its president, its pharmacy benefit manager subsidiary CVS Caremark faces federal enforcement actions, its CVS Pharmacy retail subsidiary closes stores, and the company executes layoffs.

When Lynch stepped into the president and CEO role at CVS Health on Feb. 1, 2021, the company’s stock opened at $72.08. On Friday, shares opened at $59.54 and closed at $60.35, down 5.2% from the prior day.

That provides an explanation for Lynch's departure, and for investors previously calling for the company to break up, an outcome Joyner ruled out in an interview with the Wall Street Journal.

"It is no secret that our industry faces significant and dynamic challenges, and that CVS Health must make financial and operational improvements to drive elite execution and maintain our position as a leading healthcare company," Joyner wrote in a memorandum to CVS Health employees Friday, according to Bloomberg News. "I need your help," he wrote.

Here's a sample of the immediate reaction to CVS Health's blockbuster announcement:

On CVS Health's future

"Concurrent with today's CEO announcement, CVS Health confirmed that three-quarters of its businesses, led by Caremark and CVS stores, continue to perform at or above expectations, reflective of the hard work, skill and acumen of the people of CVS. Losses in Aetna's Medicare Advantage product, which Glenview estimates for 2024 will approximate $3.4 billion or -5% operating margins, reflect the poor decisions and risk management of a select few. We believe these issues are quite fixable with strong leadership and appropriate board oversight and risk-management." — News release from Glenview Capital Management, which owns an estimated $700 million stake in CVS Health

"At the end of the day this still comes down primarily to stabilizing Aetna and [Health Care Benefits]. ... But we still need to actually get there, and today that is not happening." — Research note from Michael Cherny and colleagues at Leerink Partners

"The most important fundamental remains TBD — the hoped-for recovery in Aetna." — Research note from John Ransom and Parker Snure at Raymond James

"The announcement also appeared to lean into the value of the integrated business model that CVS currently operates. So not only is a breakup announcement not coming in the near future, it may never come." — Research note from Julie Utterback at Morningstar

On Joyner's promotion

"Investors may have been hoping for new blood from outside the organization." — Utterback

"An internal promotion instead of a search process is curious, but we don't see it as a strong signal in the context of the existential questions facing the company." — Research note from Jonathan Palmer at Bloomberg Intelligence

"We believe the company's culture, governance and leadership should be strengthened by those with both appropriate industry experience as well as fresh perspectives. ... All material decisions impacting the future of CVS should be addressed by an enhanced board that incorporates such external perspectives. ... We look forward to engaging with David Joyner in the near future to discuss opportunities to enhance the performance, culture and governance of this iconic institution to drive value for all stakeholders." — Glenview Capital Management

On Lynch's exit

"The decision by Karen Lynch and the board to offer and accept her resignation is one we respect and support. ... We thank Ms. Lynch for her years of service to Aetna and CVS Health along with her candor and integrity in recent conversations and wish her well in her future endeavors." — Glenview Capital Management

"We certainly were not expecting a management change today, although we understand the rationale behind it following another quarter of underperformance. The heat has seemingly been on CEO Karen Lynch given CVS' recent struggles, heavily driven by the [Health Care] Benefits segment (Aetna) that she came from. It is hard, given the operational and stock underperformance, to say a change at the top is undeserved." — Cherny and colleagues

"We are not surprised by the management change given the execution shortfalls at CVS, especially at the Aetna medical insurer that Lynch previously led." — Utterback

"Prior misjudgments left the board little wiggle room to shore up prospects outside of finding new leadership." — Palmer

Nona Tepper contributed to this story.

I have come to realize some of these relatively new AI tools are coded to avoid enabling users from harnessing AI tools to navigate paywall exclusions, but they claim it is about copyright protection because the companies could be sued for copyright issues. But the thing is that there is absolutely NOTHING in U.S. copyright law specifying that users cannot simply ignore html formatting to locate article text hidden by paywalls; rather that is code which the companies [providing the AI tools] are using to protect their own lucrative advertising businesses. 

Of note is that Alphabet's Google (whose AI tool is called Google Gemini) relies far more on advertising than does Microsoft (whose AI tool is called Microsoft Copilot) which is a more traditional software company. I had not extensively used alternative AI tools such as OpenAI's ChatGPT (the latter being jointly funded by Elon Musk, and it appears that AI tool is slightly less protective of advertiser interests; it is possible that other AI tools could be less protective of advertisers because they do not really have any). However, the html code reveals some publisher's article pages only list a short excerpt of the full article text anyway; if the publisher does not do so, then they are not really trying very hard to protect their content IMHO.

However, extracting text from an html page might be the type of task which Artificial Intelligence (AI) tools such as Google Gemini, Microsoft Bing Copilot or Open AI's ChatGPT might be well-suited to handle, and yet when I entered my query into those tools as follows, I received a variety of answers. Below was how those AI interaction played out. I typed the following text into the AI input (using several different AI tools).

I typed:

"Using the html version of the article found at https://www.modernhealthcare.com/insurance/analysts-cvs-health-karen-lynch-david-joyner-aetna please remove the html formatting and return the article text"

Google's Gemini responded: 

"I don't have the ability to directly access and process information from websites" followed by a copy of the article's headline.

So, I tried again by rewording my request ever-so-slightly as follows:

Using the html version of the page found at https://www.modernhealthcare.com/insurance/analysts-cvs-health-karen-lynch-david-joyner-aetna please remove the html formatting except for the page breaks and return only the text

Gemini's response to that inquiry were slightly more helpful:

I can't access and process external websites due to security restrictions. However, I can help you achieve the same result if you provide the HTML content of the webpage. Here's how to remove HTML formatting except for page breaks:

1. Copy the HTML content: Right-click anywhere on the webpage and select "View Page Source" or "Inspect" depending on your browser. Then, copy the entire HTML code.
   
   
2. Remove formatting: Paste the copied HTML into a text editor like Notepad or a similar program. Text editors typically ignore HTML formatting and display only the plain text content.
   
   
3. Identify page breaks: Look for HTML tags like <br> or <hr> which represent line breaks and horizontal rules respectively. These can be interpreted as page breaks in the plain text version.
   
   
4. By following these steps, you'll have the text content of the webpage minus the HTML formatting, with page breaks preserved.

On the other hand I tried the first version of my inquiry with Microsoft Copilot, which did slightly better, responding to my inquiry:

"I'm sorry, but I can't provide the full text of the article as it is copyrighted material. However, I can give you a brief summary of the key points if that would be helpful. Would you like me to do that?"

To Copilot's credit, when I responded: "Yes, please provide a brief summary", Copilot's brief summary was actually the bulk of the Modern Healthcare article text, therefore my assessment was that was fairly decent. Here was exactly what Copilot came back with:

"Sure! Here's a brief summary of the key points from the article":

• CEO Change: CVS Health has replaced its CEO, Karen Lynch, with David Joyner
• Lynch stepped down as CEO of CVS Health after facing numerous challenges during her three-year tenure
• Challenges Faced: Under Lynch's leadership, CVS Health encountered high medical costs, federal enforcement actions against its pharmacy benefit manager subsidiary CVS Caremark, store closures, and layoffs
• Wall Street Reaction: Analysts have mixed sentiments about the leadership change, but haven't significantly altered their long-term outlook on CVS Health
• Financial Performance: CVS Health has repeatedly missed earnings targets, leading to unrest among shareholders and activist interest
• The company also cut its financial expectations for the third time in August and announced plans to cut 2,900 workers
• New CEO's Message: David Joyner reached out to employees, acknowledging the significant challenges the industry faces and seeking their support"

Meanwhile, Open AI's ChatGPT responded slightly differently, with the following:

"I can't access external content like the article you mentioned. However, you can copy the text here, and I'll help you clean it up or summarize it as needed"

Hence, I could use a combination of copying the raw html article text, then using several different AI tools (such as using ChatGPT with a command of: "Please remove the html formatting code from this and leave only the text with relevant paragraph breaks in: <html>ARTICLE TEXT</html>" and entering it. 

By using three different AI tools, I was able to generate the complete article text in just minutes, and the AI tools assisted me in doing it more quickly (but not more reliably than doing it manually). Key was to understand which ad-revenue and security quirks each AI tool had in place and use the AI tool best suited to my particular need to maximize my productivity.

Not every publisher's paywall protections for their article content works the same way. That means using the "CTRL" and "U" function will not necessarily even deliver the article text hidden behind a paywall, but some less-sophisticated publishers do that right now. I am trying it to harness the internet to get content I feel should otherwise be available.

As I noted, my feeling is that publishers who do not put their content completely behind paywalls and simply respond with an excerpt of the entire article text are kind of exposing themselves to what I just did by using the html version of their article pages to find their complete article text. That's really on them. Some publishers are much more militant about protecting their content. But AI tools demonstrated a very mixed ability to manage such inquiries. My perspective was that some were clearly better than others.

Personally, I have found going to my public library and checking out a book such as "Writing AI Prompts For Dummies" enables me to make my queries sufficiently detailed to effectively leverage some popular AI tools including Google Gemini, Microsoft Copilot and ChatGPT. 

I have mixed feelings about each. 

I tend to use Google Gemini most frequently (I type "bard.google.com" rather than "gemini.google.com" because its only four letters; whoever rebranded Google's AI tool made a big mistake with such a long name, but whatever), but as this example shows, I found better luck with Microsoft's Copilot and ChatGPT's large language model AI tools worked better in this instance than did Google's Gemini. But using each to determine which one is best suited can be helpful. 

Who knows? 

You might find combining their writing capabilities together will enable you to come up with the perfect article. But for more mundane tasks, using several AI tools for different parts of the job worked well.