Tuesday, September 14, 2021

U.S. Patients Need U.S. FTC to Do More to Bring Rx Drug Prices Down to Earth

For a moment, try to answer the following question honestly:

When are biosimilar insulins, even those which are designated by the FDA as "interchangeable" with the innovator, MORE EXPENSIVE than the originator molecule the biosimilar is supposed to be a copy of? 

The correct answer is when a person with diabetes lives in the United States. 

It defies logic!

In theory, the biosimilars should be cheaper because the work of developing, conducting clinical trials and whatnot is not the same to make a copy. The biosimilar doesn't have to go through the same process of conducting extensive three phases of clinical trials, submitting all of their trial data to the FDA for close regulatory scrutiny, then introducing the newly-approved product to the world AND commercializing it/bringing it to market. In theory, that SHOULD mean biosimilars are therefore cheaper, much like generic small-molecule drugs are, which can be up to 90% cheaper if there are versions on the market from six different manufacturers according to the FDA's own reporting (see https://www.fda.gov/about-fda/center-drug-evaluation-and-research-cder/generic-competition-and-drug-prices for more info).

In the United States, seemingly every entity involved in the sale and distribution system for pharmaceuticals works tirelessly to hide the true info about pricing and also works tirelessly to try and keep the true prices hidden from any public scrutiny in hopes that no one ever truly discovers how screwed up the U.S. prescription drug market really is.

Case-in-point: in recent years biosimilars have finally started to emerge in the U.S., and even more are coming according to several companies in the space. 

Biosimilars will be aimed at all sorts of medical conditions, and the elusive promise is that biosimilars might save consumers money because the makers of the biosimilars can avoid many of the costly R&D and development costs that the innovators incur to bring those medicines to market. That sounds logical.

That's how it is SUPPOSED to work in a functioning marketplace. 

But the U.S. prescription drug market is not functioning properly. It does not resemble a true market in any sense of the word. It is messed up by hidden discounts given in the form of rebates paid to Pharmacy Benefits Managers (PBM's) and bogus drug list prices and secrets designed to prevent the competition from knowing what the drug companies are actually doing behind-the-scenes. 

Unfortunately, nearly everyone KNOWS what they are doing now, and some of it appears to be in violation of Federal laws. The FTC has a lot to unpack and has for years has failed to protect Americans from unregulated monopolies, but new leadership under Lina Khan appears to be taking the job a bit more seriously than many recent individuals who had her job in the past, who saw their job as little more than to give rubber-stamp approvals to mergers and acquisitions.

Naturally, insulin prices are impacted by a severely broken market, but perhaps not in the way you might anticipate.

For example, on July 28, 2021, the U.S. FDA made a big deal of how the regulator had approved the first-ever "interchangeable" biosimilar medicine which is not only biosimilar to, but also interchangeable with (meaning it can be substituted for at the pharmacy counter without permission) the reference product known as Sanofi Lantus (U-100 insulin glargine rDNA origin). perhaps not surprisingly, the first-ever interchangeable biosimilar was a form of insulin. The reason it is unsurprising is because biosynthetic "human" insulin was the first-ever biotechnology medicine approved by the FDA back in October 1982.

Acting FDA Commissioner Janet Woodcock, M.D., whom many believe to be especially favorable to the very industry the FDA is supposedly regulating and overseeing, made a cautiously optimistic statement about the development because she very likely KNEW it was likely more hype than hope. Janet Woodcock is seen as someone who puts the drug industry's needs over public safety, and many believe she should not be named as a permanent FDA Commissioner, which is rather odd, considering this woman has worked most of her career at the FDA.

"This is a momentous day for people who rely daily on insulin for treatment of diabetes, as biosimilar and interchangeable biosimilar products have the potential to greatly reduce health care costs. Today's approval of the first interchangeable biosimilar product furthers FDA's longstanding commitment to support a competitive marketplace for biological products and ultimately empowers patients by helping to increase access to safe, effective and high-quality medications at potentially lower cost" Woodcock said (see https://www.fda.gov/news-events/press-announcements/fda-approves-first-interchangeable-biosimilar-insulin-product-treatment-diabetes for the complete statement).

Note how she said that the interchangeable biologic "has the potential" to greatly reduce healthcare costs, but she never said it actually would do that. The reason is because the U.S. prescription drug market is fundamentally broken. Being a broken, corrupt market makes it very difficult for patients to avoid being taken advantage of by invisible parties who work behind-the-scenes to screw anyone and/or everyone in that dysfunctional "market" to fill their own wallets instead.

The reality is that Viatris/Biocon Semglee (U-100 insulin glargine rDNA origin), wasn't even the first Lantus biosimilar approved by the FDA or to be commercialized (that distinction belongs to Lilly's Basaglar, which is U-100 insulin glargine and that first received tentative FDA approval for Basaglar on August 18, 2014, followed by an official FDA approval on December 16, 2015 following an out-of-court settlement between Lilly and Sanofi. Sanofi had sued Lilly over supposed patent infringements). Lilly's Basaglar did so several years before Semglee even secured FDA approval, let alone getting the subsequent "interchangeable" designation. 

Part of the reason for the initial FDA "tentative" approval of the Lilly's biosimilar insulin glargine was because Sanofi immediately sued Lilly for a host of different things ranging from patents on manufacturing processes to insulin pen designs and various other things which triggered an automatic stay of 30 months to allow the companies hash out their legal disputes in a court of law.

Sanofi knew it had no chance of actually winning its patent infringement lawsuits against Lilly (who had been making insulin since the 1920's -- years before the FDA even existed), so the two companies ultimately agreed to quietly settle the litigation out-of-court. On September 28, 2015, Lilly announced it had entered into a settlement agreement to resolve various patent dispute litigation charges with Sanofi regarding its insulin glargine product. Lilly began commercializing its own Lantus copy branded as Basglar in January 2017.

One outcome of the Lilly/Sanofi out-of-court settlement over the Sanofi glargine patent infringement assertions was that rival Sanofi would also be allowed to sell a biosimilar version of Lilly's U-100 Humalog/Insulin Lispro (which Sanofi branded Admelog) and Sanofi would not be sued by Lilly over that. Sanofi very quickly did so (it was already selling a biosimilar of Humalog in parts of Europe at the time, so it was very easy to import the vials and pens from Germany where they were already being sold). 

Recall that I personally tried Sanofi's Humalog biosimilar branded as Admelog (catch my post HERE for more on that), and I still believe it was far more interchangeable (in spite of not having the FDA "interchangeable" designation which did not exist at the time Admelog was FDA approved in December 2017) with Lilly's Humalog than any so-called "therapeutically equivalent" rivals which formulary managers treat as interchangeable even though they are not, such as Novo Nordisk's Novolog, Fiasp or Sanofi's own Apidra (U-100 insulin glulisine rDNA origin). It would be nice if insurance companies were obliged to cover additional test strips to accommodate such routine non-medical switching due to formulary changes, but again, commercial healthcare insurance companies fail to do that. In fact, non-medical switching between rapid-acting analogues which is driven primarily by rebates paid to PBM's, has increased in frequency, not decreased. I have routinely been bounced between Lilly Humalog/Lispro and Novo Nordisk Novolog/Aspart which I've never liked. Aspart is, for me, a vastly inferior insulin variety which works incredibly slow (I derisively call it "slow-mo" log) and therefore requires a higher dosage to end up at the same glucose reading as I would require with lispro. None of that matters to commercial healthcare insurance company formulary managers managed by Pharmacy Benefits Managers (PBM's), the ONLY thing they care about is which company pays them most money in rebates.

Still, when Lilly's biosimilar version of Lantus called Basaglar hit the U.S. market, patients were not impressed by the price tag of Lilly's glargine product. It was priced practically the same as Sanofi's Lantus was, meaning it delivered no meaningful savings for patients who use that particular insulin variety. Considering Lilly invested very little in R&D on the products because rival Sanofi did all that in the original trials, the price tag was questionable. Lilly simply backwards-engineered the product, set up bioreactors to culture the insulin biosimilar, and then harvested the outcome. It was not a huge investment for Lilly.

However, Viatris (then known as Mylan) and Biocon never actually had to settle over similar lawsuits which Sanofi had levied against them related to Lantus (both Mylan and Biocon were co-developers, but Mylan handled the U.S. regulatory aspects of applying for and attaining FDA approval for sale in the U.S. and was the company which was sued). Because Biocon had encountered FDA regulatory approval problems over non-adherence related to Good Manufacturing Protocols (GMP) for biotechnology medicines made at the company's brand new factory in Malaysia, the FDA was unable to formally approve Semglee as quickly as it had approved Lilly's Basaglar. Because its manufacturing facility needed to be re-inspected before the FDA could approve it, rather than Mylan (now Viatris) settling with Sanofi out-of-court, the company simply let the litigation go to trial, which is where things got kind of interesting. The FDA then re-inspected the Biocon insulin factory located in Johor, Malaysia in February 2020 and ultimately approved it.

Nevertheless, when the Sanofi-Mylan insulin litigation actually went to trial, the judge threw out ALL of Sanofi's Lantus patent infrigement claims as baseless and unsupported by any evidence presented by Sanofi. In effect, Mylan (and co-development partner Biocon) was a very big winner because it did not have to settle with Sanofi for any money or licensing fees, and the court judge threw-out the bogus Sanofi patent infrigement claims out as invalid, thereby freeing Mylan to sell its own Lantus knockoffs without paying Sanofi a settlement. It also opened the door for others to rely upon that court precedent to fight against any Sanofi patent infringment claims that get levied against them, too. Lannett Company and its Chinese co-development partner HEC are counting on that for their own Lantus biosimilar, and they could easily point the court to the Sanofi/Mylan trial record as relevant judicial precedent.

In any event, since that time, the company known as Mylan subsequently merged with a Pfizer spinoff known as Upjohn on November 16, 2020. The newly-merged company then changed its name to Viatris. But insulin and other biologics merchandised by Viatris still come from the Indian biopharmaceutical giant Biocon which invested in a massive, new insulin manufacturing facility intended to serve the developed world located in Malaysia.

David Balto, former Policy Director at the Federal Trade Commission (FTC), is concerned about the lack of meaningful patient choice resulting from anti-competitive contracting practices that have been established by a number of drug makers and facilitated Pharmacy Benefits Managers ("PBM's") who help them to make drug formulary decisions for insurance companies (the top 3 PBM's are now wholly-owned business units of CVS Health/Aetna/Caremark, Cigna Express Scripts, and United Healthcare's OptumRx). Balto draws attention to "rebate walls", which are defined as exclusionary contracting practices that a drug manufacturer deploys to limit the ability of rivals from gaining preferred access to the formulary, or any access at all. 

"Rebate Walls" are the primary reason that biosimilars (including biosimilar insulin varieties) sold in the U.S. are MORE costly than the innovator brand-name drugs such as insulin, and Lantus provides a vivid case-in-point. 

Branded drug manufacturers leverage their position as market leaders by offering financial incentives to PBM's and health insurers in the form of "all or nothing" conditional volume-based rebates, in exchange for virtually exclusive positioning on the formulary. This can mean keeping competitors off the formulary entirely, or severely limiting formulary access to a competing drug through the use of step edits. Here, a patient must use a preferred drug and fail on it (a so-called "fail-first" policy which many patient advocacy groups argue are challenging for certain patients to deal with, especially when formulary "preferred brands" change due to no fault of the patients) before stepping up to non-preferred drug.

Rebate walls are also an entire subject which  the U.S. Federal Trade Commission (FTC) is partially responsible for overseeing compliance with Federal laws. FTC may finally now be considering the matter of rebate walls much more seriously than it has ever done previously. 

For example, in May 2021, FTC Commissioner Rohit Chopra penned an open letter (see his letter at https://www.ftc.gov/system/files/documents/public_statements/1590528/statement_of_commissioner_rohit_chopra_regarding_the_commissions_report_on_pharmacy_benefit_manager.pdf) writing:

"In addition to problematic rebating practices, we [FTC] must also examine whether PBM's are engaged in coercive practices that harm patients, independent pharmacists, and public health."

The FTC has a role of protecting and encouraging competitive marketplaces, we currently have a very nascent biosimilar industry which looks like it could be severely threatened by rebate walls. Insulin provides a prime example of rebate walls at work. 

Sanofi Erects "Rebate Walls" Around Lantus; Making it Cheaper than Biosimilars

Just because Semglee is an FDA-designated "interchangeable" insulin with Lantus does not mean it will be less costly to patients.

The prescription drug coupon generating website/app BlinkHealth (which is powered by the PBM known as MedImpact) reports that the list price for Sanofi's Lantus is $302.35/vial. Meanwhile, GoodRx reports that the list price for a vial of Lilly's Basaglar biosimilar (also U-100 insulin glargine rDNA origin) is $250.91/vial, which is no bargain for a biosimilar involving no real R&D. GoodRx also reports the list price for Semglee (another Lantus biosimilar) as $105.47/vial right now, all while patients can buy brand-name Lantus priced for just $99.00/vial ... provided you have a readily available manufacturer ValYOU coupon from Sanofi https://www.lantus.com/sign-up-for-savings.

In the insulin space, even though Viatris/Biocon Semglee received the FDA "interchangeable" designation with Sanofi Lantus, this means that Semglee actually costs patients MORE money than brand-name Lantus costs, which is completely illogical.

Sanofi's Lantus is hardly alone in erecting rebate walls. 

For example, on December 11, 2017, Sanofi received FDA approval for its insulin lispro biosimilar which the company branded as Admelog (which was approved as part of the company's settlement with Lilly over patent infringements related to the Lilly Lantus biosimilar branded as Basaglar). While Sanofi's Admelog has a bogus list price of $415.91/vial according to Blink Health, Sanofi offers the same ValYOU coupon https://www.admelog.com/savings it offers on Lantus, which brings the price of the Admelog (U-100 insulin lispro rDNA origin) biosimilar down to $99/vial.

Guess what? 

Admelog (a biosimilar) is actually MORE expensive than Lilly's Humalog (or the "authorized generic" known as Lilly Insulin Lispro which was introduced as a way to bypass the whole PBM/rebate mess with a reduced list price compared to Humalog, reportedly half according to the company's press release https://www.prnewswire.com/news-releases/lilly-to-introduce-lower-priced-insulin-300805560.html) is cheaper than Admelog (a biosimilar) is. That effectively means that with a GoodRx coupon, patients can buy Lilly Insulin Lispro for just $56.68/vial (the cost is even less if they buy several vials at a time, for example, I paid $161.03 for three vials of Lilly Insulin Lispro, which meant my cost per vial was just $53.68) compared to $99/vial for biosimilar Admelog (provided you give the pharmacist a Sanofi coupon). While that can't technically be considered a true "rebate wall" since it bypasses the whole PBM/rebate mess, there is certainly every reason to conclude that those prices are roughly comparable to the prices Lilly is giving to PBM's who negotiate formulary placement which is discounted using rebates.

As I blogged about a year ago in a post I called "It's the Rx Rebates, Stupid" (see my post HERE), the entire prescription drug rebate matter is deeply harmful to patients and the cost of the U.S. healthcare system, and it is badly in need of fixing. How soon federal lawmakers come to that realization remains to be seen. 

That said, one conclusion in FTC Commissioner Rohit Chopra's recent letter was as follows:

"In addition to legislative efforts, it will be critical for the FTC to rethink its approach of bringing individual enforcement actions, since this strategy is unlikely to combat these problems in a timely fashion. It would be more effective for the Commission to pursue research and conduct rulemarkings that specify when certain pharmaceutical industry practices, such as PBM rebating, are unlawful under Section 5 of the Federal Trade Commission Act."

Today, I wrote and emailed a long letter to Commissioner Chopra to ensure that the FTC does its part related to the broken U.S. prescription drug market. The day after I sent it, I received an email confirming receipt of my letter, with the following statement: "Thank you for your email.  It has been forwarded to the appropriate office for review."

Wednesday, September 01, 2021

Coupons, PBM's ... oh my!

Over the past few years, my coverage of coupon-generating websites/apps has increased by a lot in this blog because those have emerged as a critical way for patients to get prescriptions at lower, PBM-negotiated prices even if they have yet to satisfy an annual insurance deductible or they have no insurance at all. 

In general, coupon-generating websites/apps offer consumers access to the deeper pharmacy benefits manager ("PBM")-negotiated prices on prescription drugs, at prices which are often substantially less than the prices you could otherwise attain as a consumer without the benefit of a commercial healthcare insurance prescription drug benefit which is also managed by a PBM. 

Is it stupid? Sure, but in the dog-eat-dog world of prescription drug prices, you as a patient are obliged to use their stupidity and greed against them!

In effect, coupon-generating websites/apps enable patient consumers to bypass their own PBM and use another PBM instead. It's odd that insured people might possibly find it cheaper to bypass a PBM hired by (or owned by) their own insurance company to manage pharmacy benefits and instead use a coupon to access a different PBM, but thanks to high-deductible insurance plans, a lot of people don't enjoy the benefit of PBM pharmacy benefits until they've satisfied a deductible, so using coupon websites/apps enables them to buy prescription drugs and the savings can be significant (especially on heavily-rebated prescription drugs like insulin). 

While the use of coupons means patients are essentially paying entirely out-of-pocket and contribute nothing towards any deductibles they must satisfy, the savings are often so substantial that only a fool pays what insurance says they should be paying as the bloated cash price for the same prescription drug. As noted, with heavily-rebated drugs such as insulin, instant savings of 75% off the bogus list price (or more) is entirely possible. If you use insurance, you end up paying over $200 for a single vial of insulin, while your insurance only credits you about $55 towards your deductible even though you paid a stunning $200 (or more) for that vial. There are so many entities involved in screwing patients in that scenario that it's kind of hard to know where to begin.

However, it's critical to acknowledge that commercial healthcare insurance companies are the real culprits (or enemies) behind runaway pharmacy drug prices (including insulin) in the U.S. today. There are a variety of reasons, and it wasn't always that way. But changes in healthcare insurance benefit designs created by healthcare insurance companies, and specifically the advent of high-deductible insurance plans (which now cover more than half of all Americans with healthcare insurance according to multiple sources, including The Commonwealth Fund) are the primary reason.

High-deductible insurance plans were initially created for employers who pay a policy's premiums as a way to supposedly share more healthcare costs with the covered individuals rather than via premium increases paid by employer "plan sponsors". In essence, until the covered individual satisfies an annual deductible amount, their healthcare insurance pays nothing. Nada. Zilch.

The IRS also has something to say about that. 

Recall that in 2018, I blogged (see my post HERE) about how insulin needed to be added to the list of "preventative treatments" covered by healthcare insurance companies pre-deductible. It really should have been the responsibility of insulin manufacturers such as Lilly, Novo Nordisk and Sanofi to get their insulin products added to that list. Those companies hire expensive Washington DC lobbyists who could have been deployed to that task and gotten insulin added to the "preventative treatment" list, but the companies never bothered

We should be asking ourselves why didn't they do that?

The Trump Administration had a very long list of failures when it came to reducing prescription drug prices for Americans, but one accomplishment which occurred while the former reality show host was in office happened with some assistance from Congress. Through Congressional testimony on the subject of runaway insulin prices, it had already become very clear that diabetes treatments needed to be added to the very limited IRS list of "preventative treatments" which were eligible for pre-deductible insurance coverage. Congress finally saw their own failure to add insulin to the IRS list, hence lawmakers in Congress finally helped to make that a reality in 2018. Regardless of how it happened, the bad seeds in the insurance industry delayed implementation for many, citing that they could not implement the change until various insurance plan years were signed or renewed (that was a falsehood, they just did not WANT to do so because they wanted to keep lining their pockets with more Rx rebate dollars paid on insulin for at least another year or two).

But time has passed, and increasingly, more and more Americans will now enjoy the benefit of pre-deductible insurance coverage of their insulin. That was long-overdue. I fault the drug companies (Lilly, Novo Nordisk and Sanofi) for their failure to get insulin on the IRS list of "preventative treatments" in the first place. Those companies never used their expensive lobbyists to do that, but they easily could have and should have done so while their lobbyists fought all Congressional and state efforts to control prices. The insulin pricing crisis occurred because Lilly, Novo Nordisk and Sanofi were lazy and they allowed it to happen while naïvely thinking they could safely blame the other party. It didn't quite work out that way, but if the companies were actually paying attention, they really should have known better.

However, for those without the benefit of insurance coverage (including many still satisfying high-deductibles) of insulin and other diabetes supplies, two of the largest insulin makers (Sanofi being the notable exception) implemented an important affordability option as a means of bypassing the Rx rebate mess they alone had created and continue to perpetuate. Their so-called "authorized generic" versions of these insulin varieties have unique FDA NDC numbers, but they are really just Humalog and Novolog with different "generic" labels on them. 

As noted, the "authorized generic" versions of the insulin products have unique NDC numbers. The NDC, or National Drug Code, is a unique 10-digit or 11-digit, 3-segment number, and a universal product identifier for human drugs sold in the United States. The 3 segments of the NDC identify the labeler, the product, and the commercial package size. But Lilly Humalog and Lilly Insulin Lispro is the same exact medicine (made on the same assembly line), and the same is true for Novo Nordisk Novolog and Novo Nordisk Insulin Aspart even if they have different NDC numbers which attempt to bypass the Rx rebate problem.

Lilly was the first entity to introduce an "authorized generic" version of Humalog branded as Lilly Insulin Lispro https://www.lillyinsulinlispro.com/ which was to be available in U.S. pharmacies at a 50% lower list price. In reality, however, savvy consumers quickly discovered they could buy the "authorized generic" product for about 75% off the bogus list price by using freely-available coupons found at GoodRx and some rivals. Coupons are by definition, are a voucher entitling the holder to a discount for a particular product. But coupons have become a way of life in the messed up U.S. prescription drug business. Some would argue that only a chump pays full price. Manufacturers are giving discount coupons away to anyone and everyone, and now that includes patients because of PBM greed.

The result of Lilly's "half-price" Insulin Lispro introduction was that with a GoodRx coupon, Americans can now easily buy insulin sold at prices for about what people in Germany pay for the same insulin (even without insurance), which seems entirely rational. 

For example, with a GoodRx coupon, the price for a vial of Lilly Insulin Lispro is $56.68 at Walgreens. Elisabeth Rosenthal, who is editor in chief of Kaiser Health News wrote in an article published by the New York Times (see https://khn.org/news/analysis-why-should-americans-be-grateful-for-137-insulin-germans-get-it-for-55/ ) arguing that the "half-price" Lilly promised wasn't such a bargain, but thanks to coupons, the price is comparable to what Europeans pay for the same insulin, writing:

"In Germany, the list price of a vial of Humalog is about $55 — or $45 if you buy five at a time — and that includes some taxes and markup fees."

The key to that price is a readily-available coupon from GoodRx. Otherwise the price is a more costly $137.35 per vial, which is still quite overpriced.

Rival Novo Nordisk quickly followed suit when the company's Novo Nordisk Pharma Inc. https://www.nnpi.com/ unit introduced what the company called an "Unbranded Biologic" with the introduction of Novo Nordisk Insulin Aspart.  Of note was the fact that Sanofi never introduced "authorized generic" versions of any of its insulin products. Lawmakers took note that the company did not really have an answer when it was asked what affordability efforts Sanofi had taken at the time to address its runaway insulin prices. It's anyone's guess what Sanofi is doing since it is now in preparation of being spun-off as a company to become known as EuroAPI. 

Below are the company press releases for the introduction of "authorized generic" insulins:

Lilly to Introduce Lower-Priced Insulin, PR Newswire, March 4 2019, https://www.prnewswire.com/news-releases/lilly-to-introduce-lower-priced-insulin-300805560.html  

Novo Nordisk launching additional US insulin affordability offerings in January 2020, PR Newswire, September 6 2019, https://www.prnewswire.com/news-releases/novo-nordisk-launching-additional-us-insulin-affordability-offerings-in-january-2020-300913167.html  

Coupons are really just a way to deliver PBM-negotiated prescription drug discounts to people, including those without healthcare insurance or those trying to satisfy an insurance deductible. Part of the problem is the pharmacies are obliged under their PBM contracts to have artificially-high cash prices which they call their Usual & Customary (U&C) prices. That means the PBM's (which are now owned by the likes of United Healthcare-OptumRx, Cigna-Express Scripts and Aetna-CVS Health/Caremark) are the ones telling pharmacists they cannot offer better prices if someone pays cash. On that, we can blame byzantine PBM rules, and their commercial healthcare insurance company owners indirectly because the PBM's are really tying the hands of pharmacies from offering better prices to cash-paying customers.

Still, coupons are now routinely generating massive prescription drug discounts, often 75% to 95% off the bogus cash prescription price. On insulin, prices are instantly about 75% off depending on which pharmacy you buy it at. In general, coupon-generating prescription drug websites/apps work in the following way:

  1. Start with the pharmacy's bogus U&C cash prescription price
  2. Save money for consumers by providing the with easy access to a PBM's discounted network rates on prescription drugs typically sold as service to commercial healthcare insurance companies
  3. Collect a portion of the transaction fee that pharmacies ordinarily pay to a PBM for paying a drug claim

Behind-the-scenes with many coupon-generating websites/apps are the PBM's that prohibit your pharmacist from giving you a better price as a cash-paying customer. 

The biggest PBM's are now wholly-owned by the largest commercial healthcare insurance companies. PBM's are a deeply corrupt business. These entities are self-serving at the expense of independent pharmacists, drug companies and patients alike, and PBM's are so used to lying they can no longer discern genuine fact from their own fiction created by their PR departments. Entire books and countless articles have been written about PBM wrong-doings, and lawmakers badly need to fix the PBM's if they ever wish to bring U.S. drug prices back down to earth. Lawmakers are finally starting to realize the PBM's are the bad seed in a very dysfunctional market.

The FTC has a role to play too. So far, the FTC has failed.

Recall that a series of mergers in the 1990's actually put drug manufacturers including Merck, Eli Lilly & Company, and SmithKline Beecham in direct control of the most powerful PBM's at the time. That ownership enabled drug companies to then view their competitors' pricing information and place their own drugs over their rivals' on PBM formularies. As the American Prospect chronicled (see https://prospect.org/health/hidden-monopolies-raise-drug-prices/):

"That raised eyebrows," said attorney Linda Cahn https://pharmacybenefitconsultants.com/about-us/who-we-are/. "It's such a conflict-of-interest. Obviously, the PBM's were unlikely to negotiate aggressive terms with their manufacturer parent companies."

In 1997, Linda Cahn filed class-action lawsuits against the two largest PBM's in America (at the time), Medco (then owned by Merck) and PCS Health Systems (then owned by Eli Lilly), for breaching their fiduciary duty to employee health plans and increasing drug costs. The high-profile cases finally motivated the Federal Trade Commission (FTC) to finally crack down on the PBM/drug company alliance. After a series of settlements that removed the benefits of the vertical integration with the drug companies by requiring decisions on drug formularies to be delegated to an independent third-party, Lilly, SmithKline, and Merck all sold their PBM's.

But although the antitrust laws initially worked, PBM's kept consolidating, insisting that gaining market share would produce benefits for consumers. And this time, the FTC kept their hands off. SmithKline sold their PBM, Diversified Pharmaceutical Services, which later sold to Express Scripts in 1999 (now wholly owned by Cigna). PCS was bought by Advance Paradigm in 2000, and the new company then became part of Caremark in 2003. And then, Caremark itself found a buyer in 2007 - CVS, one of the nation's largest pharmacy chains. The Bush-era FTC barely blinked an eye at this vertical combination of PBM and pharmacy and never recommended any divestitures or business changes.

"That was the first unholy union," says consultant Susan Hayes https://piconsulting.org/susan-hayes/. Caremark steered its giant patient network toward CVS stores, through lower co-pays or out-of-network bans. They also got to see all the information in CVS's other PBM deals, using the data to underprice rivals.

There was a time after the drug companies divested themselves of PBM's when they were large independent businesses. It did not last.

Relentless PBM industry consolidation meant that by the 2000's, suddenly there was vertical integration with the healthcare insurance companies that once hired them (insurance now owns the biggest PBM's) which has resulted in formerly big PBM's like Express Scripts now being a wholly-owned business unit of Cigna. Ironically, the Cigna acquisition of Express Scripts was approved without question by the U.S. Federal Trade Commission which is supposed to prevent unregulated monopolies from existing. The FTC also readily approved CVS Health's (owner of the largest PBM known as Caremark) acquisition of the commercial healthcare insurance company Aetna within weeks of giving the Cigna-Express Scripts acquisition a thumbs-up.

The reality is that much like the drug company ownership of PBM's, insurance company ownership is also a deeply anti-competitive threat which truly requires FTC un-doing. How soon that occurs remains to be seen, but we now know it is on FTC's radar screens. Their perspective was from the perspective of community pharmacies. To be sure, those entities have indeed been directly harmed by PBM practices, but the harm is far more widespread than that, and yet PBM's remain incredibly arrogant organizations. 

As the Stigler Center for the Study of the Economy and the State at the University of Chicago Booth School of Business https://www.chicagobooth.edu/research/stigler publication known as ProMarket chronicled, the FTC stands out as a government entity which has repeatedly failed to protect Americans from monopolization of prescription drug pricing in the U.S. in spite of clear signs of anti-competitive behavior among PBM's. See their article at https://promarket.org/2021/02/19/ftc-market-power-pharmacy-benefit-managers/ for more.

Only now, the latest vertical integration is with insurance companies, which I think FTC is finally rethinking now. How quickly FTC gets its shit together on PBM's remains to be seen. 

FTC chair Lina Kahn is slightly more interested on monopolization in the tech space, including advertising with Google, web services/hosting with Amazon, and Facebook in social media. However, the calls for her to look into PBM's are getting louder and more frequent. Of note is that an early July 2021 public FTC meeting featured testimony from independent pharmacies being harmed by PBM contracts, so its definitely on FTC's radar screens. It is simply too big to ignore.

David Balto http://www.dcantitrustlaw.com/index.php?id=2, an antitrust litigator and former official with the Federal Trade Commission says: "It's OK to have intermediaries. But PBM's make a fabulous amount of money, even though they're not buying the drug, not producing the drug, not putting themselves at risk."'

Back to PBM-powered coupon-generating websites/apps like GoodRx. The first lesson for consumers who wish to use Rx coupons is to compare ALL of them, and verify the price that your pharmacy will charge you for a given prescription. Use whichever coupon website/app offers you the deepest discount. You are making a choice based upon what saves you the most money since you are paying out-of-pocket.

Behind the scenes of most (not all) Rx coupon-generating websites/apps are a PBM (or in some cases, several PBM's). Looking at the PBM space, of them, only MedImpact Healthcare Systems, Inc. https://www.medimpact.com/ is a San Diego, CA based PBM that remains independent. MedImpact is the last (meaning it is currently the ONLY) independent, stand-alone PBM. The others have all been acquired by the big commercial healthcare insurance companies (or in a slight reversal of roles, in the case of Aetna, which was acquired by CVS Health, as CVS Health is also the operator of the largest PBM known as Caremark, which reportedly pays for about 30% of the nation's prescription drug purchases).

Due to MedImpact's "last man standing" status as an independent PBM, the company was among the earliest to spot sales opportunities with prescription drug coupon websites/apps. MedImpact works with virtually all of them. To my knowledge, as of 2021, MedImpact is a PBM which helps to power many of the coupon-generating websites/apps. Which explains why the discounts with different coupon-generating websites/app are often about the same with many of them for the same drugs.

Anyway, back to Rx coupons. They are curiously enabled by PBM greed and willingness to partner with virtually any revenue stream willing to do business with them. The PBM's are literally proverbial whores — they'll do it with anyone, for a price. 

Side note: While Amazon has been cited as a threat to GoodRx's coupon business, the reality is that GoodRx works with Amazon, but is not truly a competitor. In GoodRx's most recent investor call, GoodRx co-founder and co-CEO Trevor Bezdek said:

"Companies have tried to copy our model or try different models, but none have been able to impact our business. Amazon has been trying to grow pharmacy delivery business. We believe they have not been successful. Mail-order prescriptions only make up about 5% of fill count in the U.S. even through COVID, mails remained a small piece of overall volume and is now starting to decrease as COVID eases."

Unlike insurance companies, consumer-facing tech companies such as GoodRx and others like it are a beneficial outcome (thankfully). But the underlying PBM's are still enabling it. But the FTC has a LOT to look into when it comes to PBM's. But I think it is likely to come soon.

Which PBM's "Power" Particular Coupon-Generating Websites/Apps?







SingleCare
https://www.singlecare.com/ is currently unique among coupon-generating websites/apps in that it contracts directly with pharmacy chains to negotiate discounted cash prices rather than using a PBM or combo of PBM's. It's a win-win model for pharmacy chains and, to a slightly lesser extent, consumers, although the discounts given to the consumer may not be quite as deep as PBM-powered coupon generating websites/apps. Still, on less-heavily rebated prescription drugs, including CGM sensors, SingleCare may end up offering the best discount coupons. 

For example, if you search on the SingleCare app for "Dexcom G6 Sensor (Guardian Sensor 3)", you will find some decent discount coupons there. Note that when you search using SingleCare app, it tends to default to Freestyle Libre sensors which aren't the same thing, but when you select the "Brand vs. Generic" option, the Dexcom sensor coupons are there. It does not appear to be an issue when using the web, but the key is to beware of what you are searching for and what the app actually delivers (sometimes they are not the same thing). Also, be certain to note the quantity. The default seems to be a quantity of 2, but I believe that means two boxes of three sensors in each box, so be certain to note the correct quantity of right brand of sensors the SingleCare coupon(s) actually apply towards. Its a quirk of using coupon-generating websites/apps to buy diabetes supplies.














BlinkHealth https://www.blinkhealth.com/ uses the PBM known as MedImpact. As noted, MedImpact is the ONLY stand-alone PBM. 








ScriptSave WellRx https://www.wellrx.com/ also describes itself as "a member of the MedImpact family of companies". 







Still another coupon-generating discount website/app is branded America's Pharmacy https://www.americaspharmacy.com which is a discount program also powered by the PBM MedImpact. I have not really found that this one offers  prescription drug prices much lower than the others, but this one does offer discounts on "authorized generic" insulin varieties which may be useful should another coupon option not be working. Prices are not necessarily any better than rivals, but this is still an option worth keeping in mind.









GoodRx
https://www.goodrx.com/ is somewhat unique in that it uses MedImpact, but it also has non-exclusive contracts with Cigna's Express Scripts, United Healthcare's OptumRx, and Navitus (which is a PBM owned by SSM Health & Costco). That unique arrangement enables GoodRx to compare drug prices from different PBM's and choose the one that offers the lowest price. In April, GoodRx acquired the coupon website/app known as RxSaver https://www.rxsaver.com/ by RetailMeNot from Vericast which is currently still operational but is unclear for how long, and GoodRx has since cut the price of Novo Nordisk's Insulin Aspart by 22% (previously, RxSaver had lower prices on Novo Nordisk Insulin Aspart).

Most of the other coupon-generating websites/apps are operated by insurance company-owned PBM's. One suggestion is to use them if and when they can get you the cheapest price, otherwise ignore them.







OptumPerks https://perks.optum.com/ is operated by the United Healthcare Group's PBM known as OptumRx, which also operates the Rx discount card. OptumPerks is basically a rebranded version of what was previously known as SearchRx (which the company acquired, SearchRx no longer exists as its own brand/app). 





Like its rival at UHC's OptumRx, Cigna's Express Scripts PBM unit also operates a coupon-generating website/app called InsideRx https://insiderx.com/. Although Cigna-Express Scripts' InsideRx website/app doesn't allow users to sort by price, making it kind of cumbersome to use, plus there are different entries in its system for both brand-name and generic medicines, meaning you must conduct each search twice to discover the lowest price, it is still one to be aware of. 

That said, it is perhaps no irony that the InsideRx website/app offered by Cigna's Express Scripts PBM unit quite often drastically offers the lowest prices on certain drugs if consumer buy uses the InsideRx coupons at Express Scripts Mail Order Pharmacy, especially on small molecule generic medications (such as pills) and occasionally on preferred formulary brands of blood glucose test strips (which is apparently Roche AccuChek right now).


 




For example, my spouse had eye surgery and uses an eye drop called Prednisolone Acetate 1% (brand name: Pred Forte), a type of steroid eye drop. There, I found InsideRx and Express Scripts mail order pharmacy had the lowest price at $15.39 for a tiny bottle (5 ml in size) of eye drops. By comparison, competing pharmacies (using coupon-generating websites/apps) had prices ranging from around $23/bottle to a stunning $173.74/bottle. Keep in mind that the size of these bottles is just 5 ml. I can't imagine paying nearly $174 for that! Something else we examined was the price of a hypertension medicine called eplerenone 50 mg tablets (which is a generic drug), yet insurance was charging $48.40 pre-deductible for it for a 30 day supply. Express Scripts Mail Order pharmacy's price was just $8.72! That was easily the least costly option we've found anywhere! Still, it does say "At this time, Express Scripts is unable to accept mailed-in prescriptions" which means in order fatten Express Scripts' own bottom line, the company currently only accepts e-scripts (not paper scripts) from your doctor. First-time orders are likely to sit in queue without a payment method on file. So it does say that consumers may call "For help with your prescriptions filled through the Express Scripts Pharmacy or your online account, you can call us at 1-844-604-9164. Our support team is available 8:00 AM - 9:00 PM ET."

This does appear that since Express Scripts lost all of its PBM clients and was forced to sell itself to Cigna at bargain-basement prices, perhaps a new direction for Express Scripts is a direct-to-consumer model? Given the apparent improprieties associated with generic drug pricing unveiled by the Connecticut Attorney General (whose cases were enjoined by the AG's for 50 other states/territories including Puerto Rico), anything is possible, but it appears Express Scripts might be helping consumers (and their pets!) navigate through some of that. Who knows.

Again, for consumers, lowest price is usually the best place to buy most prescription drugs unless they need to receive it immediately at a pharmacy for an acute illness. Rivals OptumPerks and Caremark (owned by CVS Health) seem to be less aggressively promoting the use of their own mail order pharmacies.

On the coupon-generating websites/apps operated by the PBM's themselves, personally, I've been rather underwhelmed by the discounts offered via insurance company PBM-owned coupon websites/apps on everything except generic drugs; the discounts offered just have not been that great in my experience, and many drugs or medical devices are excluded completely. 

GoodRx: A Winner for Consumers
















Of all of them, I have consistently found GoodRx https://www.goodrx.com/ to be the one app I return to over and over for prescription drug discounts when I don't enjoy coverage from insurance (pre-deductible). It has coupons for insulin of many varieties. In fact, it has even started to offer coupons directly from drug manufacturers if it has no discounts available, meaning it will refer patients to one of Sanofi's coupon pages https://www.teamingupfordiabetes.com/sanofidiabetes-savings-program enabling them to get coupons for Lantus, Apidra or Admelog or the company's highly-concentrated insulin varieties (such as Toujeo, which is U-300 insulin glargine [basically 3x as much insulin per unit]). GoodRx also has coupons for test strips (the discounts exist, but aren't necessarily enormous, but anything helps).

Beware of how I blogged about using generic strips made by different manufacturers that work in the old-school OneTouch Ultra meter, catch my post HERE), plus it some coupon websites/apps offer coupons on CGM's (as my previous blog post noted, right now Abbott's Freestyle Libre has the biggest coupons because the company is trying to establish itself against Dexcom, so its cutting sensor prices to do so). Some coupon-generating websites/apps have coupons on Dexcom sensors and transmitters, although some have discovered that the discounts seem to be better on SingleCare for Dexcom sensors. Recall that SingleCare contracts directly with major pharmacy chains to negotiate discounted cash prices, so it's a slightly different discount model. On SingleCare, a search under "Dexcom G6 Sensor (Guardian Sensor 3)" and coupons come up. Note the number of sensors is important to be aware of; apparently some pharmacies will sell you a single sensor as opposed to a box of three sensors). Also, CGM sensors tend not to be very heavily-rebated via PBM's (at least not presently), which means SingleCare is well-positioned to offer deeper discounts on those sold at pharmacy chains, whereas on drugs, the discounts may not be as generous.

As I hinted, I've generally been underwhelmed by insurance company PBM-owned coupon apps; the discounts aren't that great and many drugs or medical devices are omitted completely. As noted, InsideRx doesn't even allow the user to sort by price, making it more cumbersome to use, plus entries are different for brand-name and generic medicines. PBM coupon app discounts using PBM-operated coupon websites/apps on insulins do not exist, even while the PBM's are collecting manufacturer rebates of 74%.

The lesson for consumers is: Try searching each coupon-generating website/app, and search under both brand-name and generic drug names and at a pharmacy located near you. Prices can vary from pharmacy to pharmacy, but not always. 

Each website/app has different search functionality, some are good, some are not-so-good. But one never knows which might deliver the best prescription drug discounts. If you are bypassing insurance while satisfying deductibles, heavily-rebated drugs like insulin are best bought (if insurance doesn't cover it pre-deductible) with GoodRx coupons on authorized generic rapid acting insulin analogues. The discounts are roughly 75% off the bogus cash retail price. Coupons are not as good on basal insulins such as Lantus or Novo Nordisk's latest "Lantus killer" products. There, the Sanofi coupons which reduce the cost to $99/vial which seems to be the least costly option (at least until there are a host of different biosimilar knockoffs).

Currently the interchangeable Lantus biosimilar known as Semglee from Viatris/Biocon is actually more expensive (GoodRx reports the lowest list price as $105.47/vial) than brand-name Lantus is with manufacturer coupons (priced at $99.00/vial with a coupon from Sanofi), so beware biosimilar does not always mean less costly to patients. The same is true with Admelog, which is an insulin lispro biosimilar of Lilly Humalog/Insulin Lispro which is made by Sanofi (soon to be EuroAPI). There, you can pay either $99/vial for Admelog with a coupon from Sanofi, or $58.38/vial for Lilly Insulin Lispro with a GoodRx coupon. I vote for Lilly Insulin Lispro which costs about half of what the biosimilar costs. 

The following image was taken from Lilly's Q2 2021 earnings presentation made to investors. Note that while overall Humalog sales have essentially been flat (the chart on the right side), most of the recent sales growth has been due to the less costly authorized generic called Lilly Insulin Lispro. That was quite a stunning development which proves unequivocally how much prescription drug rebates paid to PBM's owned by commercial healthcare insurance companies have impacted the market. Regardless, consumers should use the tools available so they can navigate a dysfunctional pharmaceutical most market effectively.












Other items tend not to be discounted as much because those aren't rebated as heavily as insulin is, hence the discounts are generally not as great. But search all websites/apps and make your choices based on which costs you the least amount of cash out-of-pocket. Verify with your pharmacist what they will actually charge you for the products using a coupon; prices can and do change. The key instructions are to: #1) search each coupon-generating website/app using both the brand-name and generic drug names #2) verify both the potency (e.g. the number of mgs in each tablet) and the quantity you plan to buy and finally #3) you may also wish to verify the price offered by different pharmacies for the same drug. Some, such as GoodRx, enable you to sort the findings from lowest price to highest price, but others such as Cigna-Express Scripts' InsideRx do not offer that ability. Occasionally, that has won on lowest price for certain generic drugs when you use their mail order pharmacy, so you never know.

An informative YouTube video released by CNBC addresses the dysfunctional nature of the U.S. prescription drug market, and includes interviews with such experts as Adam Fein of the Drug Channels Institute as well as Doug Hirsch who is a co-founder of the prescription drug discount coupon generating website/app (powered by PBM's) known as GoodRx, and the obligatory "other side" comment from Greg Lopes from the PBM trade organization known as the Pharmaceutical Care Management Association (PCMA) who again, misrepresents the benefits his industry provides. The video can be seen below, or at https://youtu.be/Sx_V9ts7Jrk.

 

Wednesday, August 18, 2021

More Analysts on Wall Street are Starting to Believe Dexcom's Stock is Now Fully Valued

So, on August 18, 2021, the crowd-sourced content service for financial markets known as SeekingAlpha.com, which often contains archived investor presentations and earnings transcripts from publicly-held companies, issued not one but TWO (2) slight warnings about Dexcom stock. Links to those two articles are listed below:

https://seekingalpha.com/article/4450293-dexcom-too-expensive-considering-the-prospects 

AND 

https://seekingalpha.com/article/4450338-dexcom-future-sales-moderate-expectations 

Dexcom was the first mover into the market for continuous glucose monitors (CGMs), at least in the U.S. But Dexcom is hardly the only company operating in the CGM space. Dexcom has also delivered rapid growth, increasing revenue by 43% in 2019.

So far, investors have done well investing in Dexcom. Its stock price has increased by 459% over the last 5 years.  Also over the past 5 years, Dexcom's revenue has grown by an average of 37.5%, and at the end of 2019, the company earned a net profit for the first time. Dexcom management expects the company to grow at a CAGR of 15-20% until 2025 inclusive, and the EBITDA margin target is 30%. But the rate of revenue growth is starting to slow down, so the consensus is that Dexcom management's expectations do not appear very conservative and might be a little on the bullish side. In the opinion of a growing number of analysts, the current targets for Dexcom is optimistic, especially concerning the company's market capitalization. More Wall Street analysts have therefore become neutral on Dexcom rather than optimistic.

A key reason Wall Street is now spooked about Dexcom's share price is due to the company's lofty stock market valuation and looming competitive threats. Dexcom's most competent rival, Abbott which makes the Freestyle Libre system, is arguably only just starting to build a presence in the United States, whereas Dexcom was a bit slower to sell elsewhere in the world where Freestyle Libre is now the undisputed global CGM king. But the U.S. is a tiny part of the global market, and there, Abbott is the undisputed king.

While Dexcom can indeed still expand globally, its challenge is that non-U.S. margins might be lower because it already faces an entrenched competitor in Abbott. Abbott's newer Freestyle Libre model (the Libre 3) which is anticipated to attain FDA approval soon, and the company knows it has no U.S. presence, so it is pricing its products very aggressively, with sensors selling for about 1/3 less than Dexcom's now sell for. Of course, current Libre current models lack some key features many users consider requirements (alarms and sharing capabilities), but the Libre 3 will have all of those things too. Outside the U.S., Dexcom could be forced to do what Abbott is now doing in the U.S.: competing by cutting prices to gain sales, eating into the company's profit margin.

The short story is that Wall Street analysts believe that Dexcom's stock is already fully-valued, hence there's not much room for the company stock to increase in value from where it stands right now. They also believe that some investors who have pushed Dexcom's stock to such lofty levels don't truly understand diabetes or the market for CGM's and are therefore not making completely informed decisions.

Insurers will generally not reimburse CGM's unless people with diabetes are using insulin. That is a reality, and while arguments can be made to expand CGM's to the vast Type 2 market, the reality is CGM's/sensors cost a lot of money and the benefit to payers for Type 2 patients is simply not there unless the patients are using insulin. The reason insurers might cover CGM's for some patients using insulin is that even in people with decades of experience using insulin may find themselves experiencing very dangerous lows and extreme highs, both of which can quickly become fatal. Those can come on with no warning until a person suddenly becomes unconscious.

As my readers already know, CGM's can detect the speedy rise or fall in blood sugars before they cause symptoms, allowing a person to self-treat them accordingly. Since all people with Type 1 diabetes must use insulin, insurers usually cover CGM's for them. This keeps Type 1's from making frequent expensive trips to the ER in ambulances and helps to save the insurers money.

But, as mentioned earlier, people with Type 2 diabetes often can manage their diabetes without insulin by cutting down on the amount of carbohydrates they eat or by taking a host of oral diabetes drugs or use a combination of drugs to treat their diabetes. The drugs are much simpler than insulin for patients to use safely and are far less likely to cause dangerous highs and lows that can put people's lives in danger. Hence, payers really don't see a compelling reason to cover CGM's for Type 2's unless they use insulin.

Dexcom CEO Kevin Sayer recently made a beg (or plea?) for peer-reviewed scientific studies to "prove" that CGM's are a good use of money on the large Type 2 patient audience, but insurers are balking knowing how much it will cost them, and how little economic benefit it will actually deliver to their own bottom lines. 

When asked about coverage for non insulin-using Type 2 patients, Kevin Sayer told MedTechDive journalist Ricky Zipp (see the interview at https://www.medtechdive.com/news/dexcom-ceo-on-the-type-2-population-the-super-bowl-ad-and-pandemic-momentu/602755/):

"A lot of the pushback is based on cost [to which I respond: 'Gee, you think?']. These patients are very expensive within their own individual health systems, as far as the cost of treating the comorbidities that go along with late-stage Type 2 diabetes in particular. So, adding a sensor cost to that can be questioned. People want to see more evidence. I think we need more clinical studies. It'd be nice if we had reimbursement. But I think just getting the word out and getting more usage is going to be very important too."

However, as one of the SeekingAlpha authors argue, the argument for gaining widespread coverage for non insulin using Type 2 patients really is not there with commercial healthcare insurance company payers. 

Still, both Dexcom and Abbott are each spending big bucks on expensive TV advertising promoting the benefits primarily to the Type 2 universe with ads. This year, Dexcom featured a super-expensive Super Bowl ad featuring Nick Jonas which generated some controversy (see Esquire's coverage of that at https://www.esquire.com/sports/a35441322/nick-jonas-super-bowl-commercial-dexcom-controversy/).

So, that explains what's happening with the costly advertising push from both Dexcom and Abbott. Their ad messages are clearly geared towards the Type 2 universe, rather than the Type 1 universe. Type 1's are considered by both companies as an existing revenue source (although for Abbott, given its non-existent market presence in the U.S., the Type 1 market is a "conversion opportunity", but it has a lot of work to do, and the company may be waiting until it can introduce Libre 3 in the U.S. market). They don't need to be pulled-in on the product value proposition. However, Abbott remains a virtual unknown. It would seem to need more help in persuading Type 1's that its products are even useful, and the current ads are more about telling people with Type 2 about the impact that food has on their blood sugar numbers than how its product compares to Dexcom. 

But insurance company payers say Type 2 patients can get the exact same information with old-fashioned fingerstick tests, which costs them about $30 vs $300. Good luck with that, Dexcom! I don't see it happening with its current strategy.

When one realizes that the ads do not really even target Type 1's, but Type 2's, then the advertiser intent...and the advertising messages make marginally more sense. The ads are intended to stimulate a "pull" demand from Type 2 patients to ask for the devices, but if commercial healthcare insurance company payers won't even cover the devices, much of it will be money pissed away. The hard work is persuading insurance companies that the cost is even worth spending on Type 2 patients not using insulin, and there, I think Dexcom and Abbott still haven't done the required work needed to secure coverage for non insulin using Type 2's.

For Abbott, a lower price-point may help the company make inroads.

Maybe.

I also think that Dexcom presumes too much about supposed patient loyalty to its products. Dexcom sensors are expensive (although truth be told, Dexcom now says that 80% of patients on commercial healthcare insurance are now covered, see it in the company's recent investor transcript at https://www.fool.com/earnings/call-transcripts/2021/07/29/dexcom-inc-dxcm-q2-2021-earnings-call-transcript/ for details). As for customer service, the reviews are mixed, but aren't overwhelmingly positive, although it is a difficult job to do well at. But even with that coverage, I have my doubts. 

At this year's ADA Scientific Sessions, Abbott was bragging about how it's product is priced (in the U.S.) about "a third of the cost of other CGM's" (see the quote at https://www.zacks.com/stock/news/1756244/abbott-abt-reports-late-breaking-data-on-freestyle-libre), which is a very big deal for a consumer struggling with a high-deductible insurance plan who is essentially paying for the products out-of-pocket until they satisfy their deductible. 

That may explain why Dexcom is working so hard to make it easier for patients to get their product covered even before the truly competitive rival Abbott Freestyle Libre 3 model hits the U.S. market, likely in 2022. If only Lilly and Novo Nordisk had bothered doing the same for insulin a number of years ago, we would not have 25% of patients rationing insulin today.

In any event, both companies have their work cut out for them. At least one major investment bank, Credit Suisse, seems to believe that the market is likely to shift in favor of Abbott. For example, at this year's ADA Scientific Sessions, Abbott's Libre compared very favorably with Dexcom in terms of HbA1c reductions and acute diabetes complications, they are also bullish on the company's collaboration with Bigfoot Biomedical, and the thinking is that the company's lower price-point might better enable it to persuade payer coverage for non insulin using Type 2's compared to Dexcom, whose product is more expensive.

Watch this competitive space, because the competition is just beginning!

Sunday, August 08, 2021

Srs with T1D; Medicare + Lack of Good Enrollment Info from Diabetes Nonprofits

Not long ago, my friend Riva Greenberg wrote a compelling diabetes blog post which actually ran on Diabetes Mine https://www.healthline.com/diabetesmine/nearly-50-years-with-type-1-diabetes-a-long-haulers-report although she also posted news of it on her own personal blog https://diabetesstories.com/2021/06/16/the-untold-story-49-years-of-type-1-diabetes/.

Riva, like me, is today considered a T1D "Long Hauler". She is now in her 49th year of living with Type 1 diabetes, meaning she'll soon be eligible for a Joslin 50 year medal if she chooses to claim it. I think Riva and my older sister share a common diagnosis year (I believe they both were diagnosed in 1971 if I am not mistaken). At that time, diabetes clinicians pretty much made stuff up because they truly did not know the answers with absolute certainty. None of the groundbreaking studies such as the DCCT had even been thought of at that time, much less completed and analyzed. Doctors (even if they had suspicions) simply did not know many answers in those days. 

The concept of formalized diabetes educators with specific training did not even emerge until more than 15 years later. Also, there was only a hazy understanding that Type 1 diabetes had a different disease etiology from Type 2 diabetes, although the consensus seemed to be that normal weight or thin children with diabetes were immediately put on insulin because pills used for Type 2 diabetes usually did nothing for the patients and many went into DKA without insulin, so that became the standard of care for children with diabetes at the time. 

Since Riva was no longer a child at her diagnosis, I've never asked if her doctors tried to give her some of the early pills used for treatment of Type 2 diabetes but I suspect not because she did not fit the presumed profile of an elderly individual who was overweight. It was common to presume that older patients usually had Type 2 diabetes because they weren't children at the time of their diagnosis, although patients who were not overweight might have been suspected to have the autoimmune variety of the disease. It would be several years after her diagnosis that they had definitive scientific proof that T1D and T2D were indeed different ailments with dissimilar etilogies and pathologies.

Anyway, Riva's post kind of resonated with me. I'm at a peculiar age. 

I was born in 1969 (a year made famous for the Summer of Love, the Woodstock Music Festival and the Stonewall riots to name a few history-making events from 1969). Yet I have absolutely zero recollection of any of those events. The reason: I was an infant in diapers when those things happened. I am assuredly NOT a Baby Boomer by any stretch of the imagination. 

In fact, my parents are Boomers, but I  assuredly am not. I share some similarities with Boomers with T1D. I was diagnosed at age 7 and was immediately put on insulin (originally Lilly Iletin, but was switched from Iletin R (regular) and Iletin N (NPH/isophane) to a combination of Iletin L (Lente) and Iletin S (semilente). That seemed to work reasonably well for me for a number of years. We didn't even have glucose meters when I was diagnosed. In the hospital, I was given a test tube and a bottle of Clinitest tablets. It required patients to add 5 drops of urine and 10 drops of water and then to add a Clinitest tablet which then boiled until it changed colors. That was as close as we had to a glucose reading.

My older sister figured out if more drops of water was added to the test tube, the readings appeared lower. She also taught me as a 7 year old that I could simply add a drop or two more water and be rewarded with a cookie. Not exactly the kind of things kids with diabetes should be taught, but its what's done when there is no such thing as formalized diabetes education which was the case back then.

In fact, I received my very first glucose meter at age age 13 in 1982. Previously, we used the strips which my mother smartly used an X-Acto knife on and doubled the number of tests which could be done from a single, overpriced vial of test strips. That was possible because they were color-coded and you really didn't need an entire reagent strip to get a blood glucose reading in those days. But they eventually spent like $250 and bought us our first glucose meter. In my experience, that was perhaps the most profound advancement in diabetes care which was ever introduced. For my first 13 years, we were literally "winging it". If you're a math expert, that also means I'll be eligible for a Joslin 50 Year Medal in just 6 years should I choose to claim it.

Technically, I'm [as of 2021] what can be referred to as "middle-aged". Most of my perspective on being middle-aged was formed by not-so-great TV depictions of men about the age I am now going through what was called a mid-life crisis, whereby they saw their youth slipping and reacted by buying expensive sports cars and having (or trying to have) affairs with dumb women half their ages who likely viewed them as "sugar daddies" but then dumped them after their one night stands when the shallow bimbos realized their old man wasn't going to put up them in a rent-free apartment and buy them expensive gifts. But I never experienced a mid-life crisis. And, as I already blogged about, I feel pretty good about my own retirement planning so far.

As author Jonathan Rauch documented in his 2018 book "The Happiness Curve: Why Life Gets Better After 50" (borrow it at your public library) explaining that there are empirical biological processes and changes which occur in the body during mid-life which are nature's way of preparing us for life when we become senior citizens. The big upside is that while generations past might have seen their lives end at about my age, today people often live to be much, much older. Rauch credibly argues that the middle-age period of transition gives way for genuine psychological happiness and contentment later in human lives. The science appears to back Rauch's assertions up.

Anyway, I'm part of a group that came to be called/classified as Generation X (or "Gen X"). Pew Research referred to us this way

"Generation X: America's neglected 'middle child'"

Pew closed by putting it this way:

"For [Gen] Xers, there's one silver lining in all this. From everything we know about them, they're savvy, skeptical and self-reliant; they're not into preening or pampering, and they just might not give much of a hoot what others think of them. Or whether others think of them at all."

Demography aside, I'm also at an age where I now have a growing number of friends who have already crossed the threshold into their post-employment years of retirement. I can use their experiences to hopefully smooth my own transition when that happens.

In fact, I am learning from the experiences some of my peers in the diabetes community have experienced when it comes to Medicare. For example, Laddie Lindahl https://testguessandgo.com/ is among the first of my peers who started on Medicare. 

Others, such as Riva Greenberg https://diabetesstories.com/ are now learning the ropes on that and they may be able to reflect on her own experience with that down the road. If I'm being brutally honest, I'm rather underwhelmed with the resources from the American Diabetes Association, Beyond Type 1 Foundation, the Juvenile Diabetes Research Foundation and others when it comes to guidance on transitioning into Medicare. Those orgs remained primarily focused on children with diabetes and it shows. Their resources on the subject are superficial, don't really answer many basic questions and appear to be written by individuals who are like 30 years old and relied on Google to write articles on the topic.

Based on current eligibility requirements for Medicare, I still have 13 more years before I'll go down that path, but if I were seeking info on things to beware of when enrolling in Medicare, I likely would not be turning to ADA, JDRF or Beyond Type 1 for guidance. Whatever materials they have on the topic seemed pretty superficial and useless to me. 

However, I have seen some of what I thought were pretty decent resources, including suggestions from NextAvenue https://www.nextavenue.org/medicare-application/ which suggested that simply making a telephone call to the federal government's Medicare toll-free hotline (800-633-4227; that's also 800-MEDICAR) was a particularly helpful decision the author made in the process.

Many complain that they are drowning in flyers, articles and advice from friends who've already enrolled in Medicare as they approach age 65, and yet they still feel somewhat overwhelmed. However, the NextAvenue author said that the phone reps working for Medicare (not third parties who are paid to sell Medicare Advantage plans who advertise on TV) have experienced virtually every question known to man on the topic of enrolling in Medicare and they seem to have well-scripted answers to thousands of possible questions. Once upon a time, people went to file paperwork at their local Medicare offices, but cost-cutting has closed tens of thousands of those local offices, so the phone option seemed to be pretty useful advice. 

She also recommends, if you really want to get into the weeds, to buy (or borrow from your public library) the 2016 book entitled "Get What's Yours for Medicare: Maximize Your Coverage, Minimize Your Costs." http://www.getwhatsyours.org/medicare/ The book was written by Medicare maven Philip Moeller; Moeller's website, "Get What's Yours" http://www.getwhatsyours.org/ has the current figures for Medicare premiums and deductibles and he also has frequent blog posts with updated info.

As I said, I have a little over a dozen more years before I'll be ready go down that road barring major changes to Medicare eligibility, so I'm not too overwhelmed ... at least not yet.

Still, a few years ago (between 2016-2017), I invested a LOT of time and effort to actually help Dexcom secure Medicare coverage of its G5 CGM system. I did so mostly out of self-interest, anticipating that I wanted to ensure CGM's are covered for friends who would soon need it, and when I became eligible for Medicare down the road. I'm old enough and experienced enough to believe that we'll all still be using old fashioned insulin 16 years from now (no offense to those who believe the ever-elusive T1D cure is right around the corner). 

Its annoying Dexcom never even acknowledged the patient advocates' work on the effort to help the company secure CMS/Medicare coverage, let alone paid anyone for helping to make it happen. No patients were even flown to Dexcom's San Diego HQ to discuss how our push helped tip the proverbial needle and actually made it happen for the company. Dexcom likely could NEVER have done it if more than 10,000 patient signatures/comments had not been submitted on its device relabeling request docket at the FDA at the time. 

Still, it is small consolation that Dexcom's path was immediately copied by other CGM makers including Abbott's Freestyle Libre 2/Libre 14 Day sensor, Senseonics (now Ascensia's) Eversense CGM, and Even Medtronic's Guardian Connect CGM -- all of which did the exact same thing Dexcom did in 2017. But at the time, I was in a position to make a very meaningful contribution, and I think Medicare's 2016 announcement that it would start covering the Dexcom G5 in 2017 was definitive proof that my efforts had bared fruit. 

Below are some of the graphic images I Tweeted about CGM coverage back in 2016-2017. Originally, it was an effort to advance a Congressional bill to force Medicare coverage to cover the devices. but it later pivoted to advance Dexcom's labeling change. The timing was ironic.





















My perspective is: mission accomplished!

While I'm very proud of my previous work to ensure Medicare coverage of continuous glucose monitoring (CGM's) systems for seniors with Type 1 diabetes (catch my post at http://blog.sstrumello.com/2017/01/how-patient-advocacy-helped-persuade.html for more on how that happened), as I said, my mission was accomplished. While two major CGM manufacturers, Dexcom and Abbott, now seem more enamored with trying to capture the massive non insulin-using Type 2 diabetes patient audience (see HERE https://www.medtechdive.com/news/dexcom-ceo-on-the-type-2-population-the-super-bowl-ad-and-pandemic-momentu/602755/ for evidence), my work on helping the company accomplish coverage is over. To be honest, I find the Dexcom's lust for getting peer-reviewed (done by others, not by Dexcom, because company-sponsored research tends to be disregarded as less credible by doctors and policymakers) studies to persuade coverage (either from commercial healthcare insurance or Medicare) of CGM's for non insulin-using Type 2 patients beyond my concerns or desire to help. I did what was needed for the T1D community, and that was accomplished. I have no inherent interest to push for CMS coverage of CGM's for non insulin using Type 2's.

Advice to Dexcom CEO Kevin Sayer: 

You and your company are basically on your own in making your products available to the entire T2D universe, so you shouldn't count on patient advocacy [much of which is T1D, but far less of which is T2D -- yeah, that's a reality which defies perceived logic but T1D's were the first there, so we dominate the space, and you won't find many to persuade or influence there] to help in your efforts. 

Also, watch your back on the T1D market you now presume is yours. 

Reason: Abbott's FreeStyle Libre 3 model will rival the features that now differentiate Dexcom G6 has over rival products. The Libre 2 model already does that with third-party NFC add-on devices and software, but once Abbott offers these benefits, Dexcom will no longer "own" the CGM space. And, Abbott's Libre prices are less than yours are. Right now, because there are 3 features missing (sharing, alerts and historical data), its not really an apples-to-apples comparison. But because Abbott is entering an established market, its best way to gain market share quickly is to price its product lower than the current market leader Dexcom. 

I'm already ready to say goodbye to Dexcom https://blog.sstrumello.com/2021/06/should-i-say-adios-to-dexcom-g7-hello.html because of various issues related to repeated "Signal Loss" errors on my Dexcom G6, although I may simply wait until new products from both companies are already on the U.S. market and compare them to one another.

While some on the left of the political spectrum are pushing for universal healthcare coverage with Medicare for All, I don't necessarily see that as a realistic aim in the near-term. Instead, I believe incrementalism is the best way to get there. Many academic and peer-reviewed studies have been done about how it is beneficial to Medicare to reduce the eligibility age from 65 to 55. The reason is because doing so brings more younger people into a system which overwhelmingly serves the older, sicker populations therefore costs are inflated by doing nothing. In fact, former Presidential candidate Hillary Clinton outlined plans to do just that. From there, it is possible to reduce the eligibility from age 55 to age 50, then to age 45, etc. But some in Congress are hell-bent on ending Medicare completely, so barring a change in Congressional makeup, I think incrementalism is the best path to pursue now.

That said, some (younger) individuals mistakenly believe that Medicare is superior to commercial healthcare coverage. But the peer-reviewed science on that seem to suggest otherwise. Medicare might be OK, but it isn't the greatest. It isn't perfect. 

Anyway, when it comes to transitioning, there are already talks of reducing eligibility on Medicare to age 50 or 55. That means I would become eligible (or in just a few years). Its possible Congressional Democrats might be able to force the issue into a budget reconciliation bill, which could have direct impact on me if they did so. Whether I would do it would depend on a variety of factors. As I said, Medicare isn't perfect. 

But as far as gathering Medicare enrollment info., I have found some resources I might use to guide me into the process. That, combined with friends on the Seniors With Sensors group and I feel confident I would be able to successfully navigate the enrollment process.

Author P.S.: My friend Laddie Lindahl who blogs at Test, Guess and Go informed me that she assisted the JDRF in reviewing the information the organization had prepared in order to assist individuals with Type 1 diabetes to prepare for migrating to Medicare. Unfortunately, the page is kind of buried on the JDRF website, but she told me it can be found at https://www.jdrf.org/t1d-resources/living-with-t1d/insurance/medicare/ which might be useful reference for those seeking it. Thanks, Laddie!

Wednesday, July 14, 2021

Making Sense of the Novo Nordisk-Walmart Partnership to Sell Some Discounted Insulin Analogues

On June 29, 2021, Walmart Inc. and the American business unit of Novo Nordisk A/S (which is based just outside of Princeton, New Jersey known as Novo Nordisk Inc.) dropped what was intended to be a news bombshell coming just as the ADA Scientific Sessions was coming to a close. 

In fact, the insulin makers had hardly any big news coming from the ADA Scientific Sessions themselves this year or for the past several years (about the biggest news was from 2018 when, Novo Nordisk acquired a UK-based company known as Ziylo to use its technology to try and develop glucose-responsive insulin, but that still has a long while before it is ready for commercialization ... if ever), because most have shifted R&D towards GLP-1 inhibitors for T2D, and regularly get assaulted over runaway prices, so why not make some headlines by doing something intended to capture press attention of a captive audience?!





In essence, the pharmacies in Walmart's retail stores will start selling a version of Novo Nordisk's slightly older (and now out-of-patent, more on that in a minute) rapid-acting insulin analogue branded as Novolog which they will call Relion Novolog in the U.S. for $72.88 per vial and the company's 5-pack of insulin pens branded as FlexPens for $85.88. See the press release from Walmart HERE https://www.businesswire.com/news/home/20210629005683/en/Walmart-Revolutionizes-Insulin-Access-Affordability-for-Patients-With-Diabetes-With-the-Launch-of-the-First-and-Only-Private-Brand-Analog-Insulin for details). 


In Walmart's press release, the company boasted that this would be the "first-ever private branded analogue insulin", which it also claimed would "revolutionize the access and affordability to diabetes care" by offering customers a significant price savings without compromising quality. The product will be called ReliOn Novolog vials and FlexPens.

Dr. Cheryl Pegus, Walmart's EVP of health and wellness said that at least 3 million Walmart customers have diabetes. "This price point we hope will improve, and hopefully revolutionize the accessibility and affordability of insulin," Pegus said in a press call.

"We know many people with diabetes struggle to manage the financial burden of this condition, and we are focused on helping by providing affordable solutions. We also know this is a condition that disproportionately impacts underserved populations. With ReliOn Novolog insulin, we're adding a high-quality medication for diabetes to the already affordable ReliOn line of products and continuing our commitment to improve access and lowering cost of care," Dr. Pegus said in the announcement.



Behind the scenes, however, U.S. patients quickly started questioning the so-called Walmart "Always Low Prices" assertion on insulin. In fact, Walmart abandoned that old but well-known slogan after 19 years for a far less-memorable one with simply "Save money. Live better," back in 2007.

Walmart insulin has long been a go-to response from people who are clueless just how much U.S. insulin list prices have increased over the past decade and don't really care but they want to sound semi-informed and empathetic. 

Depending upon the insulin variety and the time period examined, we can safely say that the retail list prices for rapid-acting insulin analogues have increased by more than 1000% (that's over one thousand percent) since being introduced. The following charts were courtesy of articles published in Business Insider.










Faced with an upcoming election year imperative which it had basically done nothing about for several years when former Lilly exec Alex Azar ran the U.S. Department of Health and Human Services, the Trump Administration did try several things (some of which sounded positive) to live up to his promise to bring the cost of insulin way down. Most efforts resulted in lawsuits from PhRMA, but one was achieved: on July 17, 2019, the IRS expanded its list of preventive care benefits that may be provided by high-deductible health plans (HDHP) paid for without having satisfied a deductible, and that list now includes diabetes treatments (which were previously omitted). The IRS rules also apply to healthcare savings accounts. Unfortunately for the Trump administration, the impact did not happen quickly enough to save his presidency. 

Because each company has a different healthcare insurance plan year "start dates", hardly anyone enjoyed the benefit of a change which I argued insulin makers should have taken years earlier but had failed to do so. However, now that the rule has been in place for a few years, more and more patients are starting to realize the benefit of pre-deductible insulin coverage, and more will continue to do so when their employer healthcare plans are renewed or sign up with a new insurer.

Anyway, the Walmart ReliOn Novolog intro sounded oddly suspicious because Walmart has been known to switch its "house-brand" to Lilly-made insulins in the past. Most recently, in June 2010, it switched house-brands of insulin from Novo Nordisk to Lilly (see https://www.biospace.com/article/releases/wal-mart-changes-insulin-partner-to-eli-lilly-and-company-/ for a memory refresh if you don't remember that temporary switch to Lilly insulin), plus the markdowns weren't nearly as deep as Novo Nordisk admits it now pays in rebates to U.S. pharmacy benefits managers ("PBM's") to secure commercial healthcare insurance company formulary placement, so the Walmart move may help some, but certainly not all.

Insulin Prices 75% Off












In Novo Nordisk's recent investor presentations over the past year or so, the company has finally started to reveal to investors exactly how much money (as a percentage of gross sales) it spends on prescription drug rebates paid to PBM's, perhaps because investors seem to ask the company about it every single time the company releases its quarterly earnings. It is a LOT of money!

Previously, rebates were considered a fiercely-guarded "trade secret", but following Novo Nordisk's financial meltdown in 2016, when former CEO Lars Rebien Sørensen uncharacteristically announced he was "retiring early" (something which almost never happens in Denmark), followed by a stream of investor lawsuits because investors felt the company had misled them on the magnitude of the company's U.S. rebate problems, the company has started to reveal its exposure to Rx rebates in the U.S.

In Novo Nordisk's third quarterly investor presentation of 2020, the company revealed that 71% of the company's gross U.S. sales were going out the window to PBM's in the form of rebates paid to PBM's. By the time the company had released its Q4 2020 earnings, in its presentation, Novo Nordisk disclosed that Rx rebates had increased to 74% of gross U.S. sales - a quarter-over-quarter increase of 3%. The following image is from slide #103 of the Novo Nordisk A/S Q4 2020 investor presentation. Note the figure in the last quarter in the graph on the right side in which the 2020 data point was revealed to be 74%):

That's absolutely bonkers. 

Novo Nordisk tends to remove its quarterly investor presentations from the company website over time, but archived copies are still accessible via SeekingAlpha.com, visit Novo Nordisk A/S Earnings Presentation Slides (specifically, see slide #103) archived at https://seekingalpha.com/article/4403040-novo-nordisk-s-2020-q4-results-earnings-call-presentation for the reveal.

So the Rx rebate monster is alive and well, and Novo Nordisk decided to copy rival Lilly's move to sell what it refers to as an "Unbranded Biologic". As it turned out, half-price wasn't really the price, its actually a fair amount less. 



Savvy consumers quickly discovered they could get readily-available GoodRx coupons online (or on their smartphone app) which actually made the out-of-pocket expense for a vial of the unbranded biologic of Novo Nordisk U100 Insulin Aspart to be about 75% off the suggested retail price of brand-name Novolog when purchased at Walgreens. For that reason, the pharmaceutical industry's baseless claim that slashing prices by 90% would kill their businesses and R&D is revealed to be just a falsehood. In fact, they are already marking prices down by at least 75% on insulin with zero impact to their own bottom lines. 

Voila! 75% off -- instantly. No strings attached. No enrollment required. No providing the company with personal information.

The good news for patients is that the "authorized generics" (or as Novo Nordisk calls them "unbranded biologics") versions have brought much-needed affordability to insulin that now looks comparable to what the rest of the world pays for rapid-acting insulin analogues. With discount coupons, the price is about $55/vial, which is about the same amount they pay for a vial of Novolog in Germany (or Novorapid as its called in that country). Still, basal insulin analogues are not quite as affordable ... yet ... but we know with certainty that there are at least 3 copies of insulin glargine working their way through the FDA approval process. 

Add to that a Lilly copy branded as Basaglar and another called Semglee from Viatris, and there are several. But Sanofi's (now EuroAPI's) aggressive discounting of brand-name Lantus with coupons and back-door discounts, means that Lantus remains the undisputed king of basal insulin varieties in spite of repeated efforts from Novo Nordisk to develop newer basal analogues. So far, commercial healthcare insurance company payers are balking at paying Novo Nordisk any kind of premium price for the company's newest "Lantus killer" known as Tresiba (insulin degludec rDNA origin). Insurance is happy to take Lantus rebates at the expense of Tresiba.

For its part, Novo Nordisk's current CEO Lars Fruergaard Jørgensen and the company he leads has basically said that while Novo Nordisk expects to maintain its global leadership in the insulin market, most of the company's revenue growth has been derived from GLP-1 agonist products used in the treatment of some patients with Type 2 diabetes while the company continues to make minor improvements to those to extend the company's patent exclusivity. The company also acquired an FDA-label extension for its Victoza to be used as a weight-loss drug. But the company's big profit driver is now clearly Type 2 diabetes meds, not insulin which is the only FDA-approved treatment for autoimmune Type 1 diabetes (T1D) whose lives depend upon exogenous insulin. In fact, the company made a rare acquisition when it acquired Ziylo to help it with glucose-responsive insulin, if that makes it thru clinical trials successfully which remains a big IF.

Longtime Business Strategy: "Retire" Old Insulin Varieties and FORCE Patients to Use Newer Patent-Protected Insulins

For their part, both Novo Nordisk and Lilly have resurrected a very old playbook by planning to "retire" their now out-of-patent rapid-acting insulin analogues with new & improved versions which remain patent protected. 

Over my 46 years living with T1D, they've done it to me 3 times where they simply stopped making the insulin I prefer using. First I used the Lilly Iletin Lente series (there were three of them: Semilente, Lente, and Ultralente). That worked reasonably well for my needs. But then Lilly partnered with startup Genentech to introduce synthetic insulins no one really wanted or needed because they did not offer superior glycemic control and had a higher price tag to boot. So Lilly simply stopped making the older products and forced patients to use the new Humulin products which no one was asking for. At that point, I switched from Iletin Lente (L) to Humulin L. That worked no better, and I stopped having signs of impending hypoglycemia which the company worked to discredit in spite of cases being documented globally. But then, a few years later, Lilly stopped making the entire Lente series of Humulin insulins.

Generally speaking, that's been a recurring pattern. 

First, they retired U-40 versions and forced patients to adopt U-100 versions instead. That also meant getting new syringes. Then they dropped insulin varieties sourced from abbatoir animal sources. With that retirement, at least the same insulin varieties were offered. But the Lente series required them to make Semilente and Ultralente and mix them to create Lente. That was the first old-school product to get the axe. But it had a newer, patent-protected version it called Humalog (U100 insulin lispro rDNA origin) to replace it. That was the first truly lab-invented insulin which supposedly delivered superior glycemic control ... for a higher price, naturally.

In 2017, Novo Nordisk got FDA approval for a marginally-faster version of its insulin workhorse Novolog. It is a slightly faster version of insulin aspart, so it gave the new product the name "Fiasp" which means Faster insulin aspart. Rival Lilly followed suit when a faster version of its bestselling Humalog was FDA-approved on June 15, 2020. Lilly branded that as Lyumjev (insulin lispro-aabc rDNA origin), but it acts much like Novo Nordisk's Fiasp does, and Lilly's patent expires 3 years after Novo Nordisk's patents on Fiasp expire. 

Back to the Walmart Relion Novolog analog intro. 

One reason the Walmart announcement wasn't quite the ray of hope some expected was because a subsidiary of the U.S. business unit for Novo Nordisk called Novo Nordisk Pharma Inc. https://www.nnpi.com/ copied its rival Eli Lilly & Company, Inc. also introduced "authorized generic" insulins called U100 Novo Nordisk Insulin Aspart back in 2020. After rival Lilly did so, we discovered that CVS Health, owner of the large Caremark PBM business and also owner of commercial healthcare insurance company Aetna, refused to carry the less costly product in its pharmacies because it wanted jumbo insulin rebates from Lilly and Novo Nordisk on brand-name insulin varieties rather than carrying the less heavily rebated (and cheaper) insulin varieties which would deliver important, more affordable access for patients. But rival Walgreens DID carry the less heavily-rebated product. They may need to order it, but a pharmacist can handle that for patients.

Recall that Eli Lilly announced on March 4, 2019 its plan to sell what the press called a "half-priced" version of its own Humalog merchandised by its ImClone Systems Inc. subsidiary which the company had acquired in 2008. The press release for the Lilly announcement can be read HERE. Lilly dubbed its "authrorized generic" U100 Lilly Insulin Lispro. The effort was a means to try and bypass the pharmacy benefits manager (PBM) mess which demand ever-higher "rebates" from pharmaceutical companies, and artificially bloat the list price cost of prescription drugs for many consumers at the pharmacy checkout counter.

After Lilly's move, Novo Nordisk determined that Lilly's idea was an effective one on the affordability front, so on September 6, 2019 (see the company's press release HERE), it too promised to (just as Lilly was already doing as part of the company's affordability options) to launch its own "authorized generic" version of Novolog. Just as U100 Lilly Insulin Lispro faced struggles persuading some big drugstore chains like CVS to even carry it because they are financially addicted to Rx rebate dollars they haven't earned, Novo Nordisk U100 Insulin Aspart can't be purchased at all pharmacies (but as noted, big pharmacy rival Walgreens carries it).

As I've revealed in several recent posts over the past year (look to the archives), the presence of coupon-generating websites/apps like GoodRx have started to change the rules. Insurance plans haven't quite figured that out yet. 

But many patients find it is still cheaper to use GoodRx coupons while they're satisfying a deductible because they can take advantage of discounted, PBM-negotiated prices on prescriptions by paying cash. Even though it contributes nothing to their deductibles, the reality is that insurance companies only credit patients 25% of the bloated price they pay for insulin, which means it makes more sense financially to simply bypass insurance until their deductibles are satisfied. People with diabetes usually satisfy deductibles about halfway through the year given the costly insulin, glucose meters, CGM sensors, as well as quarterly appointments with their endocrinologists or family doctor which means they satisfy deductibles more quickly than many others.

New & Improved Means Patent Exclusivity for Pharma. Superior Glycemic Control? Yeah, That Too.

Consider these images which come from a presentation I gave in autumn 2020 (see my post about and and the entire presentation HERE) which I believe says more than 1000 words can: 

As noted, Novo Nordisk and Lilly each now have "new & improved" rapid-acting insulin analogues which they will focus on trying to switch patients over to because those products still enjoy years of patent exclusivity on the market. If you think about the recent Walmart announcement with Novo Nordisk, it makes perfect sense. 

Novo Nordisk already has a pretty large inventory of Novolog and we know there are several biosimilars in the works, including from both Viatris/Biocon, and Lannett/HEC. A third may be in the works from Novartis-Sandoz/Gan & Lee, although the latter seems spooked by the rebate problem in the U.S., so we haven't seen or heard much from that partnership. Of note: all of those involve a U.S. business handling FDA applications and approvals, while the products are manufactured in Asia and shipped across the Pacific Ocean via the Port of Los Angeles. Viatris/Biocon has a massive insulin factory in Malaysia, while Lannett is partnering with China-based HEC which already makes Lantus and Novolog biosimilars being sold in China. 

Perhaps you can imagine Novo Nordisk's dilemma. 

It has a massive inventory of a now-old product (Novolog) which is likely to face a number of biosimilar copies in the the next few years. It already has several copies from rivals sold in Europe, although the U.S. is traditionally the company's cash-cow. Cutting a deal with Walmart might offer it a solution to sell its existing Novolog inventory. The price isn't marked-down quite as much as rebates require, so it looks like its a benevolent company partnering with Walmart which is known for lower prices, and it has national distribution. And, if the price is still too high, Walmart can always sell it for even less.

Sounds like a win for Novo Nordisk. But Walmart appears to benefit less. Unless Novo Nordisk happens to pay Walmart some kind of rebate. Instead of reducing prices for consumers, Walmart might keep the rebate dollars. But if sales aren't great, Walmart can always reduce prices on the product even further.

Biosimilars have not materially reduced prices for insulin in the U.S., but the data suggest that once there are several of each biosimilar on the market, prices do tend to fall. Currently, only Lantus (U100 insulin glargine rDNA origin) has more than one biosimilar on the market. There's a Lilly copy called Basaglar and another one from Viatris/Biocon called Semglee. Sanofi also makes a version of Novolog sold in Europe, but has said it won't bother selling one in the U.S. because sales for its Admelog biosim have been falling. In response, Sanofi (to be called Euro API soon) has aggressively slashed prices of original Lantus to keep market share, so both biosimilars have struggled thanks to the "rebate wall" which harms biosimilars.

Fiasp will replace Novolog (Fiasp stands for Faster insulin aspart), while Lyumjev will replace Humalog. Its only a matter of when, likely not IF that happens. Over my 46 years of living with T1D, I've had countless insulin varieties "retired" and removed from the market on me. First, it was Lilly's Iletin. I hated the biosynthetic varieties, which delivered no meaningful clinical benefit in terms of glycemic control, but it caused me hypoglycemia unawareness, plus it raised the prices, too. Some benefit! But retiring the old product was the way the companies forced people to switch from Iletin to Humulin, which hardly anyone wanted to do. 

Of rapid-acting analogue insulins, so far only Humalog has a rival on the U.S. market which is made by Sanofi (soon to be known as Euro API) branded as Admelog. I've tried it and it works as well as Humalog and it is somewhat cheaper with a coupon from Sanofi (catch my post HERE). However, sales of Admelog have been steadily falling. Part of the reason is because parent company Sanofi was more concerned about spinning the company off as a stand-alone company to even worry about it, so insulin product managers lacked resources to effectively address it, but once the spin-off happens, maybe things will change. 

Side note: At the recent ADA Scientific Sessions, another French biotech company called Adocia released news that it will soon trial an improvement to rapid-acting insulin analogues by including an analogue of amylin to those insulins (see the press release HERE for detail). That's a conversation for another day, but its worth noting because a stand-alone (its approved only as an adjunctive treatment to insulin) amylin analog treatment called Symlin already exists, this is the first to add it back into insulin since manufacturers started removing it from insulin years ago. That company (Adocia) said: "In Type 1 diabetes, ultimately, neither insulin nor amylin are secreted (and GLP-1 secretion is deficient). It is therefore possible that the use of insulin alone cannot address all the metabolic deficiencies related to [Type 1] diabetes." If I had to guess, I'd say that Sanofi/EuroAPI could offer "new & improved" biosimilars of lispro and aspart by adding things like amylin to the boiosimilars thanks to research done by a different France-based biotech firm (they'd have to sign a partnership first, so we can look for something like that). That would yield not only improved glycemic control, but would also offer the benefit of longer patent windows for a company whose insulin business has been struggling.

Perhaps that can be something Euro API will investigate to turn its struggling commodity insulin business around? 

Who knows, but its certainly the type of thing which might help the company which has arguably become a one-trick pony in the insulin biz, relying on Lantus for virtually all of its insulin revenues in the U.S.

But Walmart's Novo Nordisk Novolog deal is yet another crack in the rebate wall fortress (and one which is long overdue). Whether its enough to knock the proverbial rebate wall down completely remains to be seen. 

Adam Fein, CEO of the Drug Channels Institute eloquently summarized the utter stupidity of U.S. prescription drug pricing (see his post at https://www.drugchannels.net/2021/03/how-goodrxs-rapid-growth-creates.html for details) this way:

"Pharmacy pricing and benefit design are fundamentally broken. Three out of four consumers who used GoodRx already had commercial, Medicare, or Medicaid insurance. 

This means that someone — the consumer, their employer, and/or the government — paid insurance premiums for a pharmacy benefit managed by a PBM. Yet it was still worthwhile for people to bypass their [own healthcare insurance] plan's out-of-pocket costs and PBM network rates in favor of a different PBM's rates [offered thru GoodRx].

Discount cards such as GoodRx save consumers money by leveraging the craziness baked into the U.S. pharmacy pricing, reimbursement, and dispensing system. It's hard not to dislike a system that enables these games."

"Craziness" is describing the situation kindly from a man whose very business is as a consultant is to help paying clients (pharma, drug wholesalers, pharmacy benefits managers, insurance company formulary managers, and pharmacy retailers) to navigate a dysfunctional U.S. "drug channels" system and maximize their own benefits from it. 

I'm more blunt about it: it is completely stupid, and no other country in the world does it the American way because it costs SOOOOO much more money. So yeah, it is incredibly stupid. It is a way to piss away nearly $200 billion/year kind of stupid.

Patients should still shop around for the best deal on insulin aspart (especially if they still have a deductible to satisfy or they are uninsured). Also, there are several U100 insulin aspart biosimilars in development right now (which explains Novo Nordisk's imperative to "retire" it) from Viatris (formerly known as Mylan)/Biocon and Lannett Company/HEC. Others could be in the works from Novartis' Sandoz unit/Gan & Lee (which was announced with some fanfare back in 2018). 

Just remember: GoodRx coupons may likely enable you to buy insulin aspart (made by Novo Nordisk) for even less than Walmart is currently selling it. I have yet to determine if GoodRx coupons can be used at Walmart to buy Relion Novolog insulin, which might mean the prices are even lower. For me personally, I refuse to pay for Novo Nordisk insulins if I don't have to because they just aren't as effective for me, but currently, GoodRx coupons redeemable at Walgreens pharmacies nationwide are selling vials of Novo Nordisk U100 Insulin Aspart for $52.78. GoodRx offers coupons for vials of Lilly U100 Insulin Lispro purchased at Walgreens for $48.07/vial.







Pharma created this stupid situation, and pharma has an obligation to fix it without the help of government. 

For once, we can honestly say that government did nothing to create the situation we now find ourselves in because the prevailing decades-long U.S. policy has been laissez-faire when it came to drug prices. Pharma lobbied for that, and pharma got exactly what it wanted. Now, insurance companies are bigger than drug companies are, and they are more powerful than drug companies, and suddenly, pharma is crying for Washington politicians to help save them from the rebate system they created and continue to perpetuate. 

Ignore them. 

They lie when they say a 90% price slashing will hurt R&D (we know with certainty they are already slashing insulin prices by 75%); what it will do is force pharma to buy back less of their own stock and pay senior executives less in bonuses.

It's just another day in the insane U.S. insulin market. 

Remember: I called it stupid for a genuine reason. 

But patients/consumers shouldn't have to pay for stupid. If price controls are what fixes it, pharma deserves to have price controls imposed upon them. 

Patients already have enough scars from a completely stupid and dysfunctional Rx market.