Thursday, September 29, 2022

Novo Nordisk Will Sell An Unbranded Version of Tresiba in the U.S.

Sometimes communicating the right message to the right party at the right time may result in a pleasantly unexpected thing happening!

During this year's EASD which took place in Stockholm, Sweden (a beautiful city I've visited more than a few times over the years), at the end of a Live Tweet event with Novo Nordisk Live @NovoNordiskLive, I shared a few thoughts which had been bothering me about Novo Nordisk's commitment to its U.S. unbranded insulin strategy (I described its commitment as "half-hearted"), and I did so by sharing several slide images which I got directly from Novo Nordisk's quarterly investor presentations and the company's 2021 annual report.




 

 

 

 


 

 

 

 


Frankly, I did so because I felt as if the Danish company was simultaneously boasting to company investors about how much "assistance" the company's affordability options in the U.S. were providing, while also doing so for essentially a single product (unless you include its pre-mixed insulin varieties which are not very big sellers anyway). In my mind, that was hardly a corporate commitment to the company's unbranded insulin strategy.

And yet, at the same time, Novo Nordisk is one of the biggest contributors to the PBM rebate problem responsible for runaway U.S. insulin prices in the first place. By last disclosure, Novo Nordisk revealed that the company was paying PBM's 74% rebates of its gross U.S. sales in order to keep competing products off many insurance company formularies. That's why the company has told investors U.S. insulin margins will struggle. The U.S. FTC is currently investigating PBM rebating practices and has stated that rebates paid in order to exclude less costly products may actually be illegal, although it hasn't formally taken any enforcement action (such as with a lawsuit) until it's PBM study is officially finished.

So I shared with Novo Nordisk a few carefully composed Tweets when one of their online chats had just 16 minutes remaining. I never thought much would happen with it. But, I did it anyway.

Below is a "rolled-up" version of my Tweets for convenience of reading them all in the same place. I rolled-up my response on the thread at https://threadreaderapp.com/thread/1573049827528773636.html .

Then, about one week later, I re-visited Novo Nordisk Pharma, Inc.'s (NNPI) website at https://www.nnpi.com/ to see if any other products were included (I check it periodically), and I noticed some things which were not there the last time I visited the site: The inclusion of Insulin Degludec Injection 100 U/mL (as well as another for 200 U/mL, which is a U-200 version of the basal insulin which contains twice as much insulin in each unit and is geared mainly at the insulin-resistant Type 2 diabetes patient population).

As it turns out, the Federal government's National Institutes of Health (NIH) maintains a website called DailyMed https://dailymed.nlm.nih.gov/dailymed/ where images of packages from FDA-approved drugs from each manufacturer are on file. I looked up the newest unbranded products to see what we can expect them to look like; I've included them here for my readers. Note that the UPC bar code hasn't been assigned yet so that information is missing, but the basic package designs are ready to go. 




 

 

 

 

 

 

 


 


 

 

 

 

 



 

To visit DailyMed's page on the newest unbranded Novo Nordisk insulins, go to https://dailymed.nlm.nih.gov/dailymed/drugInfo.cfm?setid=c1be283d-4b1d-4996-b2a7-4488dbff3037 for the images and other basic info. Neither unbranded products were on the NNPI website previously. The image of the package also contains the FDA NDC numbers which may be relevant for patients going into a pharmacy trying to order the unbranded products.

In fact, until now, Novo Nordisk Pharma, Inc. only sold older, out-of-patent products which had identical unbranded versions on the market, which I considered a half-hearted commitment to the U.S. affordability considering that Novo Nordisk is among the biggest perpetrators of the underlying market dysfunction by paying the BIGGEST rebates to PBM's to get its products on exclusive formulary placement. By the company's last disclosure, Novo Nordisk said it was paying 74% of U.S. gross sales to PBM's as rebates.

Although the company did not introduce an unbranded version of Fiasp in the U.S. (yet), but I believe the company will ultimately be forced to do so when it eventually "retires" Novolog and stops selling the product. That is likely to happen before too long if history provides any evidence. That's practically a guarantee with like a half-dozen biosimilar versions of Novolog from rival companies currently pending FDA approval, so I suspect that it's really a matter of when, rather than if it will happen.

Biosimilars of aspart are now in development from Biocon, Lannett, Amphastar, Sandoz, and Civica. And, those are just the ones I actually know about! Each is in various stages of development.

Curiously, Novo Nordisk's first "Lantus killer" known as Levemir (insulin detemir) was not chosen as the next product to be unbranded. That could have happened if the company wasn't really serious. The reasons there are no unbranded Levemir is likely due to the fact that Levemir has already lost U.S. patent protection, hence there's far less which the company can really do to prevent any biosimilars of that insulin product for those interested in copying them. However, Levemir has never really been a best-selling product in the U.S., hence Novo Nordisk didn't bother with an unbranded version of that product.

While I was thrilled that Novo Nordisk responded (indirectly) with a new, unbranded insulin which will soon become available in the U.S., it doesn't appear as if these were considered before now. The company could also have introduced an unbranded GLP-1 inhibitor products (although none of those are not on the WHO's "essential medicines" list), but I suspect that the company's recent supply-chain problems with those products likely explains the main reason it has not done unbranded versions any of those ... yet.

On that front, along with at least four or five biosimilars of aspart now in development from Biocon, Lannett, Amphastar, Sandoz and Civica, a number of biosimilar-manufacturers now also have versions of liraglutide (sold under such names as Ozempic, Trulicity, Wegovy, Rybelsus, and Saxenda) currently in development (likely concluding the clinical trials needed to commercialize them), so those could likely face new biosimilar competition in the U.S. before long too.

Lilly has a competing GLP-1 product to Novo Nordisk's newer iterations of Victoza on the market called Trulicity (dulaglutide) and a new one called Mounjaro (tirzepatide), but those products still face rebate walls Novo Nordisk has erected around those its blockbuster GLP-1 inhibitor products which now generate a vast majority of the company's U.S. revenues these days.

However, as I said previously, GLP-1 products are not currently on the World Health Organization's list of "essential medicines" whereas insulin IS on the "essential medicines" list. Hence, I'm pleased we may soon see a new, unbranded version of Novo Nordisk's Tresiba on the U.S. market. That could bring affordable access of that product to a much-wider U.S. audience. Just remember, the prices for the unbranded insulin is likely to be even cheaper using a coupon from GoodRx, SingleCare or any number of other coupon-generating websites/apps. Check them all and use them to buy the insulin (bypassing insurance) for the lowest price possible.

Sunday, September 11, 2022

More Insulin Biosimilars Are Forthcoming; The Market Outlook for Them

During the past few weeks, in both SEC-mandated (for publicly-held companies) earnings reports and investor presentations, plus in the business news and pharmaceutical industry trade press, we received several important, relevant updates on not one, but on FOUR insulin biosimilars currently in development from two different companies. We also know that in addition to them, insulin biosimilars are in development from at least three additional companies, plus as the "innovators", the traditional "Big Three" insulin-makers of Lilly, Novo Nordisk and Sanofi continue making their bestsellers (for the time being, anyway). 

Economists generally believe that in order for a market to be considered economically "competitive" there must be about five companies making similar products before prices start to come down due to competition. Pharma defies the rules because drug channel intermediaries including both drug wholesalers (the "Big Three" in that space include McKesson, AmerisourceBergen and Cardinal Health) who typically markup drug prices at least 50% before they even arrive on drugstore shelves, as well as Pharmacy Benefit Managers ("PBM's") all of whom interfere with ordinary commercialization rules in order to enrich themselves. Because drug pricing is negotiated behind closed doors and by secret contracts, drug pricing are widely regarded as made-up anyway with few public disclosures, which enables the nonsense we experience to take place.

Back to the recent biosimilar insulin news. 


 

 

 

 

 



The first news came from Lannett Company, Inc., which describes itself this way: 

"We primarily develop, manufacture, market and distribute generic versions of brand pharmaceutical products", also adding "Today, we market more than 100 products, mainly tablet, capsule or liquid oral generic medications." The company was incorporated in Philadelphia in 1942 under the laws of the Commonwealth of Pennsylvania, and later reincorporated in 1991 as a Delaware corporation. Today, the Lannett's corporate headquarters remain in the Philadelphia-area, specifically in the Pennsylvania town of Trevrose which is located in the northern suburbs along the I-476 "Blue Route" corridor (the beltway that surrounds Philadelphia) about halfway between Philly and Trenton, New Jersey. Lannett views insulin biosimilars as key products in the company's drug development pipeline, and as a result, it has been remarkably forthcoming about their development (even though its not exactly a big pharma company, hence what it does generally doesn't make national headlines).

Unlike the big three insulin makers who mainly use their quarterly earnings for colorful investor Powerpoint "Presentations" (Lannett occasionally does them, but they tend to be limited), however Lannett tends to use its SEC filings to provide extensive details on its insulin biosimilars. Unfortunately, its a pain in the @$$ to read thru them all because there's so much tiny text to read.

Lannett's SEC 10K filing (its 2021 annual report) says:

"In 2016, the Company announced a strategic partnership with YiChang HEC ChangJiang Pharmaceutical Co., Ltd., an HEC Group company, to co-develop a biosimilar insulin glargine pharmaceutical product for the U.S. market. The product is currently in development, and a healthy human Pharmacokinetic/ Pharmacodynamic modeling ('PK/PD') clinical trial was conducted in South Africa. The study met all of its primary endpoints. Subsequently, Lannett held a Biosimilar Biological Product Development Type II meeting with the FDA. The feedback was consistent with our expectation. The Company plans to manage the clinical and regulatory steps for FDA approval and will have the exclusive U.S. marketing rights to the product. Drug substance and drug product have been produced at a newly commissioned facility and we submitted an Investigational New Drug Application ('IND') on December 20, 2021. The pivotal clinical trial is now underway and top-line results of the study are expected to be available at the end of calendar year 2022. We anticipate filing the BLA (Biologics License Application) for the biosimilar Insulin Glargine in early calendar 2023 and a potential launch in calendar year 2024. In February 2021, the Company expanded its strategic relationship with HEC and added a new co-development agreement for biosimilar Insulin Aspart, which is expected to potentially launch in calendar year 2025. In addition, we will market other generic products developed by HEC with several launches expected over the next few years."

The Lannett 10K (the quarterly earnings release filed with the SEC) filing further elaborates: "Four of the product candidates," including "generic Advair Diskus and generic Flovent Diskus, combination drug/devices for the treatment of asthma, and biosimilar Insulin Glargine and biosimilar Insulin Aspart for the treatment of diabetes both delivered in a device [insulin pen devices], are widely-used medications that we believe represent a combined U.S. addressable market opportunity of approximately $16 billion in 2022, according to IQVIA although actual market sales will be less. Most of this value is related to the entire Insulin Glargine and Aspart markets."

The Lannett 10K filing further adds: 

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

Then, on September 7, 2022, the trade publication known as Drug Store News (see the article at https://drugstorenews.com/lannett-completes-clinical-trial-subject-dosing-biosimilar-insulin-glargine for details) added some additional news based on an interview with Lannett management: "The company [Lannett] completed subject dosing in the pivotal clinical trial of biosimilar insulin glargine, a product being co-developed with partners within the HEC Group of companies.

No serious adverse events have thus far been reported, Lannett said.

Tim Crew, CEO of Lannett, said 'We achieved the subject enrollment goal to meet our statistical endpoints. Dosing of all subjects has now been completed in the healthy volunteer pharmacokinetics and pharmacodynamics study of Lannett/HEC's biosimilar insulin glargine. We continue to expect top-line data and analytics to be available toward the end of this calendar year. We then anticipate filing the Biologics License Application for a biosimilar and interchangeable insulin glargine to Sanofi's Lantus Solostar in the spring of 2023 and potentially launching the product in the first half of 2024.'"

So, in essence, we can anticipate a formal new drug regulatory filing for Lannett/HEC insulin glargine injection U-100 biosimilar in the U.S. in the first half of 2024 with it expected to hit the market the following year. Lannett also has an insulin aspart injection U-100 biosimilar which is expected to formally apply for FDA approval in sometime in 2024, likely hitting the market the following year.

Interesting. 

While I suspect Lannett will simply copy what Viatris/Biocon did with the launch of Semglee (introducing both a branded but high-price/high-rebate product aimed at the PBM segment, and an identical unbranded low-price/low-rebate product aimed at the patient/pharmacy house-brand (white-label which is identified in the company's SEC filings) market, Lannett has not mentioned doing any of that ... yet, which is appropriate since neither product has been approved by the FDA yet, hence the FDA doesn't want to see the company talking about those things until the products are actually approved. By comparison, big pharma dances around the issue with investors by hinting and suggesting things to inform investors without actually saying anything that FDA might slap them with. Small pharma can't really do that.


 

 

 

 


Next up was news from Amphastar Pharmaceuticals, Inc. which is based Rancho Cucamonga, CA (located in San Bernardino County in the Los Angeles exurbs), which describes itself as a company focused on developing, manufacturing, and marketing injectable, intranasal, and inhalation products; and Complex medications including biologics recently announced plans for several of its own insulin biosimilars which I had not previously been aware of (although the fact that its now selling generic glucagon was a clue). 

In truth, Amphastar, much like biosimilar insulin rivals including both Lannett, Sandoz and even Civica, is also relying on co-development partners located offshore (Amphastar has several partners in China, although it claims to be "vertically integrated" with them, but I believe under Chinese law, Amphastar cannot technically "own" its Chinese partners outright) to manufacture the Active Pharmaceutical Ingredients ("API's") offshore and will then package the product into vials and insulin pens domestically for sale in the U.S. I should clarify that Amphastar says on slide 5 of its presentation that it is "vertically integrated" with manufacturing, which suggests that the company actually OWNS its Chinese partner; when in reality it may have a minority stake in the company and have an exclusivity contract with it.

As hinted, you may recall that Amphastar made headlines within the diabetes community back on December 28, 2020 as the first-ever generic glucagon emergency kit to receive FDA approval. That product became the cornerstone of Amphastar's "Diabetes" portfolio (in spite of being the first, the FDA very quickly approved a second generic glucagon from Fresnius Kabi USA not long after the Amphastar product was approved). These are inconvenient, old-school, mix-and-inject glucagon products as opposed to a more "modern" forms of glucagon which most patients and caregivers seem to prefer. Now that those products have gone generic, sales are falling. Not that the prices have come down very much. GoodRx reports that one Amphastar generic glucagon product sells for $233.12 at Walmart pharmacies, which is quite high. By comparison, the lower price is $88.28 at Rite Aid pharmacies.

Hence, Lilly is pulling the plug and discontinuing its old-school product at the end of 2022 to focus exclusively on marketing its Baqsimi intranasal glucagon product, while this week, rival Novo Nordisk announced a new partnership to commercialize Zealand's Zegalogue Hypopens since Novo Nordisk does not have a "modern" glucagon of its own to commercialize. A partnership between them seemed a forgone conclusion since both companies are based in Denmark anyway.

 


But this week we saw a presentation which Amphastar Pharmaceuticals gave at the Jeffries Healthcare Conference on June 8, 2022. SeekingAlpha shared the presentation (the company's Investor Relations website is at https://ir.amphastar.com/ but is limited in the archived content found there. Note that the corporate website presentation differed only in that the cover slide clearly said "Jefferies Healthcare Conference, June 8th, 2022" but every other slide is identical. You may see the archived presentation from SeekingAlpha at https://www.slideshare.net/sstrumello/amphastar-pharmaceuticals-sep-2022-corp-presentationinsulin-biosimspdf, or above. In particular, observe slide numbers 5, 6, 11, 16, 18 and 20. Amphastar announced more details on the company's plans to sell four insulin biosimilars, including a version of glargine, aspart and rather curiously, old-school rDNA biosynthetic "human" insulin product (most likely regular and isophane/NPH, which would bring the total to four). The latter was particularly surprising to learn, although I welcome it. The insulins (and not its glucagon product) is the focus of the second part of this week's post.

In its investor presentation, Amphastar was very clear that it intends to attain approvals for biosimilars of Lantus, Novolog and Regular (and likely isophane/NPH (not simply biosimilars, but INTERCHANGEABLE biosimilars which suggests plans to target the PBM segment of the market without acknowledging the patient market); the presentation did not specify which, but slide 6 specifies that it has four injectable products now in development, while slide 18 says those will be glargine, aspart and "recombinant human insulin" which is essentially regular, and isophane/NPH which would total four products; its unclear if any licensing is even necessary to Novo Nordisk which developed isophane/NPH back in the 1950's because the patents are all now really expired, although Lilly did pay licensing fees for isophane at that time). But it was clear that its a multi-step approval process and Amphastar, unlike rival Lannett, tends to be more tight-lipped about where things stand until the company is closer to launch.

So, Which Insulin Biosimilars Are Currently In Development (and from Whom)?

We now have solid evidence that in spite of the supposed challenges facing U.S. biosimilars (including insulin) caused by so-called "rebate walls" erected by branded drug companies that pay billions in rebates to PBM's, that there are more than a few insulin biosimilars currently in development even in spite of those challenges.

We can count on: 

(1) Lannett/HEC plans to sell glargine and aspart, 

(2) Amphastar Pharmaceuticals/Amphastar Nanjing Pharmaceuticals (ANP) in Jiangsu China plans to sell glargine, aspart and two rDNA "human" insulin (likely Regular and isophane/NPH), 

(3) Civica/GeneSys Biologics (GeneSys is based in Hyderabad, India) plans to sell glargine, aspart and lispro, and 

(4) Sandoz/Gan & Lee (in Beijing, China) have all announced plans to enter the U.S. insulin market in the next few years selling glargine, aspart and lispro. 

I also strongly suspect that we could also still see Fresnius Kabi USA also enter the U.S. insulin biosimilars space given that it already has a glucagon emergency kit already on the market, although I find no evidence of the company having insulin biosimilars now in development. 

Fresnius Kabi USA is based in the Chicago suburbs, although the parent company is based in Switzerland, with the generics and the global biosimilars business based outside of Frankfurt, Germany. 

Each company has unique commercialization (notably, pricing) strategies, but the path which was already paved by a FIFTH (or a sixth if Fresnius Kabi USA eventually enters the U.S. insulin space) entity, specifically Viatris/Biocon in Johor, Malaysia which already has two versions of FDA-designated "interchangeable" U-100 insulin glargine injection already being sold in the U.S. right now seems to be the likely direction for others. Viatris/Biocon also has biosimilars of both aspart and U-300 glargine now in development. Note that Viatris agreed to sell its half of its joint venture with Biocon to Biocon Biologics and the sale has already received regulatory approvals in India and the U.S., therefore that will close by Q2 2023 and the Viatris name will disappear from the packages and be replaced by Biocon Biologics instead.

Unexpected Developments Since My Jan. 8, 2007 Article on Insulin Biosims

I must admit: when I first wrote about the unnecessarily long-delayed insulin biosimilars in the U.S. market over 15 years ago (all the way back on January 8, 2007; catch my groundbreaking post at https://blog.sstrumello.com/2007/01/business-of-diabetes-real-story-behind.html for my original coverage), I had some doubts we might ever get here. And, beyond that, thanks to the aggressive PBM rebate aggregation, I also never envisioned the absolute necessity of having offshore manufacturing partners would be so desperately needed in the insulin biosimilars space for biosimilar-makers to pay multibillion dollar, legally-exempted "kickbacks" in order to bribe PBM formulary managers for a spot on their drug formularies. Now, at least, the FTC seems to be of the opinion that rebates paid to PBM's in order to exclude less costly competition may actually be in violation of no fewer than five different U.S. laws, although not much has changed aside from a formal policy statement revision. I expect once the FTC's PBM study is done, they along with the U.S. DOJ will eventually be forced to sue the insurance company-owned PBM's to bring that corrupt practice to an end.

But fast forward 15 years, and here we are.

That said, I am actually quite optimistic about the possibility of biosimilar insulins. In the past, when Novo Nordisk and Lilly discontinued insulin varieties, patients were FORCED to pay higher prices for a new insulin they might not even have wanted to switch to. Now, biosimilars will change that dynamic. If Novo Nordisk opts to "retire" Novolog and stop making the product, patients will still be able to continue using biosimilar versions of aspart, only other companies will be making it, even if Novo Nordisk "retires" the product. Only this time, patients will not be FORCED to "upgrade" to Novo Nordisk's newest, patent-protected insulin variety in order to line that company's pockets. That means biosimilars have already altered the U.S. insulin market in a very important way.

Incidentally, that USED to be how the U.S. insulin market worked (that patients upgraded when they and/or their doctor wanted it to happen, not when pharma forced them to upgrade to pad big-insulin's bottom lines), but somewhere along the way, the market became an oligopoly which put profits over patients. In that way, many patients have become victims of big pharma marketing tactics because no alternatives existed. That dynamic has been changed by the advent of biosimilars, and that is a very welcome change in my assessment.

But I am also not naïve about what may happen next.

We still have Lilly, Novo Nordisk and Sanofi who dominate the branded insulin market right now (although Sanofi's U.S. insulin business is currently on life-support now that Lantus has lost all patent exclusivity and a half-dozen biosimilars are either already on the market, or currently pending FDA approval right now), but it's theoretically possible that we could simply see one or more big insulin-makers like Lilly willing to slash its prices on its"authorized generic" Insulin Lispro to a price of just $30/vial (which is what Civica/GeneSys Biologics plans to sell their biosimilar insulins for), and I suspect Sanofi would (eventually) likely match them. That's why Civica announced that its forecast is that Civica could potentially capture 30% of the U.S. insulin market, rather than a much larger percentage.

Novo Nordisk is assuredly more in-bed with the PBM/rebate issue, hence its "authorized generic" unbranded biologic is slightly more costly than rival products from Lilly and Sanofi. The company admits its now paying "rebates" to PBM's amounting to 74% of the company's gross U.S. sales, hence its profit margins in the U.S. are falling rapidly. But if my insurance wasn't paying for it, I wouldn't even bother with Fiasp anyway; I don't really care for it, and would prefer lispro if I had a choice in the matter. When prices fall to $30/vial, I will be able to choose whichever insulin replacement therapy works best for ME, rather than the one which pays my insurance company's PBM the biggest kickback!

Friday, August 26, 2022

Novartis To Spin-Off Sandoz as Stand-Alone, Public Company

 



 

My readers may recall that I disclosed (see my post at https://blog.sstrumello.com/2022/07/novartis-sandoz-is-back-in-insulin.html for details) some information buried in Novartis' July 20, 2022 quarterly earnings release, when buried on page 21 of the company's 64-page Q2 & half-year 2022 financial statement, when we finally learned that the company's planned insulin biosimilars first announced in late 2018 were still very much in development. In fact, the Gan & Lee-manufactured insulin glargine U-100, insulin aspart U-100 and insulin lispro U-100 bisimilars were indeed still happening and may actually be further along in development than we ever realized.

 





Sandoz has chosen a co-development partner offshore, specifically Beijing China-based Gan & Lee Pharmaceuticals Co., Ltd., which Sandoz originally stated was "a leading insulin supplier headquartered in China with more than 20 years' experience in insulins and production capacity with attractive cost of goods sold (COGS) structures".

It is believed Sandoz, much like such companies as Biocon as well as Lannett/HEC Pharma and even Civica/GeneSys Biologics all opted to use an offshore manufacturing partner so they were in a position to actually pay Pharmacy Benefit Managers ("PBM's") multi-billion dollar, legally-exempted kickbacks used to secure exclusive formulary placement (the exclusivity part may actually be illegal). 

Civica is unique among them in that the company has gone on record as saying its biosimilar insulins will be commercialized with no intention of playing the PBM kickback scheme, and instead, the benefit of lower-cost offshore manufacturing will go directly to patients in the form of lower prices. If the rebate mess sounds corrupt, its because it is corrupt. For years, the PBM industry has sold lawmakers and Americans a falsehood that they work to save the healthcare system money, when all they do is line their own pockets with most of that cash (estimated to be $236 billion in 2021).

Still, having a significantly lower cost of goods sold would theoretically enable Sandoz to compete in the PBM rebate game as long as Sandoz is able to manage its Chinese partner's compliance with Good Manufacturing Protocols ("GMP"). Of note is that the U.S. Federal Trade Commission ("FTC"), when it unanimously voted to formally study PBM contracting practices in the spring of 2022 also issued a formal revised policy statement effectively saying that that rebates paid to PBM's that aim to exclude competition from less expensive alternatives may, in fact, constitute unreasonable agreements in "restraint of trade" under Section 1 of the Sherman Act; as well as unlawful monopolization under Section 2 of the Sherman Act; or exclusive dealing under Section 3 of the Clayton Act. Additionally, manufacturer payments that induce PBM's to place higher-cost drugs on formularies in place of lower-cost alternatives "may violate the prohibition against unfair methods of competition or unfair acts or practices under Section 5 of the FTC Act."

The FTC also highlighted that paying or accepting fees in exchange for excluding lower-cost drugs from formularies may violate Section 2(c) of the Robinson-Patman Act, "which prohibits payments to agents, representatives, and intermediaries who represent another party's interests in connection with the purchase or sale of goods.” The FTC noted "at least one court has held that this provision may reach rebates paid by drug manufacturers to PBMs."

The FTC intends to closely scrutinize the impact of rebates and fees on patients and payers to determine whether any of these provisions have been violated. Additionally, the FTC will monitor private litigation and "file amicus briefs where it can aid courts in analyzing unlawful conduct that may raise drug prices," and will continue to study this issue.

While the new FTC policy statement does not exactly bind the FTC or the public — or confer any right of action on any person — the FTC's issuance of a new policy statement on the heels of its announced inquiry of the six biggest PBM's signals a much more aggressive approach in targeting the prescription drug market. The issuance of the new policy statement "should put the entire prescription drug industry on notice: when we see illegal rebate practices that foreclose competition and raise prescription drug costs for families, we won't hesitate to bring out full authorities to bear," said FTC Chair Lina Khan in a statement. From that statement, PBM's should take note that the policy statement appears to directly challenge the PBM industry to demonstrate that rebate savings are sufficiently passed through to payers and patients and that fees are justifiable for legitimate services.

Should the FTC and the U.S. Department of Justice ultimately sue in order to dismantle the PBM rebate kickback scheme (which they should), that could position Sandoz/Gan & Lee insulins in a much more favorable position to compete with Biocon and even Civica/GeneSys Biologics if its prices are low enough. Making them offshore in China is how Sandoz plans to do so, and that was evidently the Sandoz plan all along; only now it looks more likely to happen and perhaps sooner than we initially imagined. We should look for FDA approval decisions for Sandoz insulins in the not-too-distant future, although Biocon and Lannett/HEC each have products which we know are ahead of Sandoz/Gan & Lee.

Anyway, while Sandoz has made its commercialization plans more clear and definitive, after months and months of rumors, on August 25, 2022, Novartis formally announced (see the announcement at https://www.novartis.com/news/media-releases/novartis-announces-intention-separate-sandoz-business-create-standalone-company-way-100-spin for detail, along with the investor presentation at https://www.novartis.com/sites/novartis_com/files/2022-novartis-sandoz-spinoff-presentation.pdf for more) that the company intends to formally spin-off its Sandoz generics and biosimilars business. Novartis says it is in order to sharpen its focus on its patented prescription medicines. Starting in October 2021, the company began a formal strategic review of Sandoz examining a range of options for the Sandoz business, including either retaining the business, spinning it off or selling it.

Of note is that Novartis had previously tried to divest part of Sandoz back in 2018, but a $900 million deal with India's Aurobindo Pharma ran afoul of antitrust rules in Switzerland and elsewhere. 

Novartis reportedly received interest from a number of private equity buyers, due to poor market conditions and the struggling broader market for generics, analysts said the spin-off announcement did not come as a surprise. Sandoz generated nearly $10 billion in sales last year selling generics and biosimilars (less costly versions of biologic drugs made from living organisms) will emerge as Europe's leading generics company, according to Novartis. Sandoz will return to U.S. growth, with expected biosimilar approvals for blockbuster medicines such as Humira and Tysabri next year as well as three insulin biosimilars (glargine, lispro and aspart) being co-developed with China-based Gan & Lee are also in development. 

The standalone Sandoz is expected to be headquartered in Switzerland and will be listed on the SIX Swiss Exchange, with an American Depository Receipt program in the U.S. Mr. Richard Saynor will remain CEO following the spin-off. Sandoz is also now forecast to become Europe's largest generics and biosimilars company based on sales when the spin-off occurs. The spin-off is expected to be completed in the second half of 2023 according to the company, subject to market conditions, tax rulings and opinions, final board endorsement and shareholder approvals, Novartis said.

In some ways, freeing itself from Novartis could actually benefit Sandoz to pursue growth in the generics and biosimilars markets the company already now competes in. However, as Biocon has discovered suggesting to The Pink Sheet, that the company's primary focus on the U.S. PBM market segment has left the company's insulin biosimilars in a curiously precarious situation. While it landed itself on the Express Scripts and Prime Therapeutics formularies, that move has eaten into margins, and a singular focus on the PBM market could ultimately prove to be a fatal error for biosimilar-makers. Biocon recently announced plans to acquire Viatris' half of the two companies joint venture, and as it discovered with its FDA-designated "interchangeable" insulin biosimilar of Sanofi's Lantus, sales have struggled. For the branded insulin Semglee, most of the revenues are pissed away as rebates paid to the PBM's, while the unbranded product has had rather low sales. To top matters off, on July 1, 2022, Sanofi slashed prices on branded Lantus to $35/vial and its Winthrop US business also launched an unbranded U-100 Insulin Glargine Product of its own, which also sells for $35/vial. That means Semglee and its unbranded identical product are currently overpriced, and not by a small margin.

Right now, patients can buy Semglee with an InsideRx coupon for a low price of $67.94/vial, which is nearly twice as costly (94% to be precise). Presumably the unbranded product is comparably priced to the "net" price for Semglee since it has no back-end rebates. By comparison, both Sanofi insulin glargine products (Lantus and the newly launched unbranded product) now sell for $35/vial with a manufacturer ValYou coupon https://www.teamingupfordiabetes.com/sanofidiabetes-savings-program/.

While we can speculate on how Biocon ultimately plans to respond, it seems clear that it needs to slash its prices at least in half. That should certainly be feasible; its the reason the product is manufactured in Johor, Malaysia in the first place.

As for Sandoz and its Gan & Lee copies of Lantus, Novolog and Humalog, again, we know that the high price it can command is $35 for the lispro and glargine products since both now have manufacturer coupons reducing prices to $35/vial right now. Only Novo Nordisk's unbranded biologic copy of Novolog (Novo Nordisk Insulin Aspart Injection U-100) is more costly; about the lowest available price for that product is currently $57.33 at Walgreens with a GoodRx coupon, which is about 20% more costly than Lilly's unbranded prandial insulin analogue (Lilly Insulin Lispro U-100) now retails for with a manufacturer coupon https://www.insulinaffordability.com/ from Lilly.

Sandoz will need to determine whether it even wants to play the PBM rebate game (its possible the FTC and DOJ may rewrite the rules of the game to look more like they do in Europe which could change the decision-making process), or whether it will focus as a pure-play generic/biosimilar entity focused on direct-to-consumer sales. If I had to guess, I'd say it will try to market to both segments with branded and unbranded products, but as Biocon is now discovering that doesn't mean it can price its products too high or sales will go nowhere. We shall see if Sandoz as a stand-alone company is prepared for that. Starting in the 2nd half of next year, we will have detailed financial statements and investor reports from Sandoz to keep us informed of where that's going.

Monday, August 22, 2022

Generic Crestor Pricing Insanity

For a number of years, I've used a statin drug (like 35 million Americans in the United States do). Also for more than a few years, these drugs were rather costly and protected by exclusive patent protection, although at the time, they were mostly covered by my insurance to prevent major heart attacks which could cost them even more (hundreds of thousands of dollars in claims).

I've used several different low-dose statins over the years, mostly for their preventative benefits. I initially began with Pfizer's Lipitor (atorvastatin calcium), but I experienced some pretty severe muscle aches which made it difficult for me to even get myself out of bed in the morning because my leg muscles were so cramped, which was not OK for a drug I did not even HAVE to be taking. As it turned out, muscle aches are a very common adverse effect of many statins. So my doctor switched me to rival AstraZeneca's Crestor (rosuvastatin calcium) which worked better, so I stayed on it. I use a single, 10 mg tablet daily. Statin drugs are not complex biologics; they are simple, small-molecule drugs which means they are incredibly easy to manufacture.

When I was still covered by United Healthcare, that company even sent me a free pill-splitter and suggested that I could slash my out-of-pocket costs in half by asking my doctor to prescribe the statin at twice the potency of the drug I had previously used, effectively taking a half-tablet instead. Evidently, the company paid the same exact price whether it was for a 10 mg tablet as it did for a 20 mg tablet which defied logic. Two single 90-day orders lasted me all year (because I cut the tablets in half). Since then, I've learned that nothing in pharmaceutical pricing makes any logical sense and it's best not to try and analyze it beyond how it impacts me personally at the time.

Broken Generics Market, Too

The U.S. market for prescription drugs is fundamentally broken. Nowhere is this more clear than in the market for generic drugs. A 2018 study from Consumer Reports showed a survey of pharmacies' cash prices for five common generic drug prescriptions. The results were rather startling. Prescription prices ranged from $66 to $1,351 — which Drug Channels reported (see HERE) was "a nearly 2,000% difference. The big three retail drugstore chains — CVS, Walgreens, and Rite Aid — consistently had higher average prices compared with those of other pharmacies."
 

Drug Channels added in a section of the post which it called 'The Warped Logic of Pharmacy Pricing', writing:

"Some prescriptions have no third-party payments, because patients pay the full cost out of their pocket. Patients buy these prescriptions at a pharmacy's usual and customary (U&C) retail list price — the price that a pharmacy charges to a cash-paying consumer.

Why do pharmacies persist in publishing U&C prices that provide ludicrous profits margins from the neediest patients?

The unfortunate answer concerns the pharmacy industry's own little gross-to-net problem.

A third-party payer will not reimburse a pharmacy above the pharmacy's U&C list price. Consequently, pharmacies typically establish U&C prices that exceed the maximum expected reimbursement from any payer. In doing so, the pharmacy eliminates the risk that it could be reimbursed an amount less than what a third-party payer would have been willing to pay.

Hence, CVS set its average cash price at $928 for the five prescriptions surveyed by Consumer Reports. That's at least 33 times higher than the published acquisition cost. As the largest buyer of generic drugs, CVS has an acquisition cost that was likely even lower."

Generic Financial Gamesmanship


Eventually after maneuvering around brand-name drug pricing games, then came multiple generics. I was under the (mistaken) impression that would lead to cost-savings. Historically, the introduction of multiple generics means prices would fall, and prices did come down, but only somewhat. However, the generic drug market for U.S. drugs is also very fundamentally broken. More than half of the drugs themselves are made offshore in India, China, Malaysia and elsewhere which costs the companies next to nothing, and yet the prices on many of them remain stubbornly high due to endemic financial gamesmanship from entities in the drug distribution system.

Statin drug prices have been adversely impacted by PBM profiteering. In fact, I would not be surprised if they end up playing a prominent role in the litigation from the attorneys general of virtually every U.S. state and territory alleging illegal price-fixing collusion among generic drug manufacturers. Anyway, when I was still covered by Cigna, I never even noticed the price it because under my plan, the company had adopted the 2019 IRS rule (see my coverage at https://blog.sstrumello.com/2019/09/in-2020-people-with-diabetes-may-wish.html for detail) classifying statin drugs (as well as insulin) as a "preventative treatment" eligible for pre-deductible coverage, therefore I paid nothing for the drug.

Then, my employer healthcare plan sponsor switched carriers from Cigna to Aetna (then recently acquired by CVS Health). Initially, I presumed both companies would treat "preventative" treatments all the same. Unfortunately, that was untrue. Insurance companies can pick and choose which drugs they wish to treat as "preventative" treatments; no doubt their actuaries evaluate whether the tax benefits are worth more than overcharging the masses. 

When I ordered my first 90-day supply using Caremark mail order pharmacy, I was charged a ridiculous price of $33.85 for that 90-day supply, meaning MY cost was about $0.38/tablet. Again, not horrifically overpriced, but it just SEEMED kind of high to me for a new generic with lots of companies making it. A search around the internet confirmed that was no bargain. So I decided there was no way I was being robbed like that again. While Caremark charged patients nearly $34 for 90 tablets, its Aetna sister business unit was only crediting me about $7.50 for spending all that money; thereby padding someone else's bottom line at my expense.

My First Go-Around Bypassing Insurance Was Successful

As noted, although the price I was charged for generic rosuvastatin calcium 10 mg tablets wasn't obviously overpriced, but because I had discovered Caremark was overcharging my spouse for another generic drug called eplerenone 50 mg tablets made in India (overcharging us by a stunning 82% for that generic), I decided to check out prices for ALL of the generics used in my household just to be sure.

My Expectation of 56% Savings Was Established This Year

At the time, I discovered I could buy rosuvastatin calcium 10 mg tablets for considerably less (56%) at a price of just $15.00 for 90 tablets by using CVS Caremark's biggest rival, United Healthcare's Optum with an OptumPerks coupon purchased via Optum Store. Since my doctor had already given me an undated paper script for it, I investigated and discovered that at the time, Optum would accept a mailed-in prescription (others do not; they only accept e-scripts). It is my opinion that a price around $15 for 90 tablets of rosuvastatin calcium 10 mg is likely a "fair" retail price close to the actual cost-plus a small margin for the drug; anything vastly over that amount is simply price-gouging by some entity/entities.

Optum's Unexplained, Unjustified 40% Price Increase

That plan worked for most of spring 2022 except for very my last refill in June, when Optum unexpectedly raised the price on the drug by a stunning 40% to $21.00 for a drug they previously charged me just $15 for. I was annoyed, but still felt justified because I still paid less than the $33.85 CVS Caremark intended to charge me for the same prescription. Fortunately, I only incurred that inflated cost just once, then I had satisfied my own deductible so it was back to Caremark, only this time they were paying the entire cost (at least until the deductible resets next January).

Deductible Resets Routinely Expose "Covered" Patients to Bogus Rx Drug Prices

However, it occurred to me that I would be back to this stupid overpriced generic market dysfunction effective on January 1, 2023. And, I was bothered by the lack of transparency enabling this to happen and the fact that prices were subject to change at any time because the PBM saw an opportunity to make even more money. So I did what I did last year, and got on my computer and began searching for better prices.  I discovered that generic Crestor and all other statin drugs are oddly overpriced right now. We cannot blame raw material cost increases for this; its because someone is behind the scenes, manipulating the prices. And, I'm quite certain we can blame the PBM's for most of that.

Rx Coupons: Some Are PBM-Powered, Others Are Not. Alternatives to Coupons Exist, too.

Anyway, since most (not all) coupons are powered by different PBM's (some like GoodRx have non-excusive contracts with multiple PBM's although they only have access to a single formulary from each PBM which limits its ability to always deliver the lowest prices), so I turned first to non-PBM powered coupons, including SingleCare https://www.singlecare.com/ which are retailer provided discount prices which is often impressive on generics and medical devices like test strips and CGM sensors. The second one I turned to was ScriptHero https://www.scripthero.com/ (which is mainly powered by CoverMyMeds, plus the PBM MedImpact as well as SingleCare). Suffice to say, I was rather underwhelmed by the discounts I found. The lowest price I found there initially was $24.65 for 90 tablets which was not materially better than the price I paid with my insurance company's PBM Caremark.

ScriptHero (owned/operated by drug wholesaler McKesson and powered internally by CoverMyMeds, as well as the PBM MedImpact and SingleCare; I'm not sure how it chooses which input to use, but I suspect it uses CoverMyMeds whenever possible, and then turns to the others when CoverMyMeds isn't able to discount a particular drug). ScriptHero's price WAS better than SingleCare's price was: the lowest price with ScriptHero was $15.44 for a 90-day supply, but it was from a small, independent pharmacy I've never patronized before and I was worried knowing PBM's sometimes pay those pharmacies LESS THAN their actual acquisition cost for the drug (which sounds like it should be illegal; maybe FTC will eventually conclude just that?) that the price might potentially be lower than their acquisition cost for the drug, so I didn't necessarily jump at it (although I could have), but at least I had a viable alternative at a price much lower than I was paying.

So I explored further.

Costco: Powered by the PBM Navitus Which It Co-Owns

I know, for example, that Costco actually co-owns the PBM known as Navitus, so I looked at Costco's prices. Sometimes, on generics, their prices are pretty decent. But Costco's prices were marginally more expensive than the alternative options I already explored: Costco's price for a 90-day supply of rosuvastatin calcium 10 mg was $20.99 (or $21.99 if I used its mail order pharmacy which I prefer for small-molecule pills), so I wasn't enamored with that, although it was certainly better than what Caremark intended to charge me.

New Coupon Site from New PBM: CapitalRx Advantage Savings

There was an alternative I never tried before: According to Forbes (see https://www.forbes.com/sites/joshuacohen/2022/02/02/capital-rx-aims-to-disrupt-the-pbm-market/ for the article) CapitalRx is currently the nation's fastest-growing PBM. CapitalRx is an anomaly in that it uses National Average Drug Acquisition Cost (NADAC) prices and sells at a cost-plus a fixed, flat fee per prescription claim processed rather than proprietary rebates off the average wholesale price or wholesale acquisition cost. CapitalRx also does not engage in secretive rebating or spread pricing.






CapitalRx says it now serves hundreds of thousands of covered lives. The company grew by 400% in 2020, and doubled in size in 2021. Matt Gibbs, President of Commercial Markets, projects that CapitalRx will have close to one million covered lives by the end of 2022. And, CapitalRx owns/operates a coupon-generating website/app of its own as rivals Optum, Express Scripts and MedImpact do. Its coupon-generating website/app is called Capital Rx Advantage Savings https://capitalrxadvantage.com/ which I never used before. But it was worth a look. As it turned out, the prices at all of the pharmacies in its retail network was $16.04.


I could have bought generic Crestor using another coupon-generating website/app for a price of $15.44, though I was still concerned it might be screwing a small, independent pharmacy by paying them less than the drug costs them because it still uses a traditional PBM model. 

Alternatively, Costco was an option at a price of $20.99 for 90 tablets (I can literally walk to my nearest Costco, so IMHO, they ARE a neighborhood pharmacy. But lines at the store and parking there are both nightmares), and price wasn't even the lowest. Then, it occurred to me: what about COMBINING Costco with a CapitalRx coupon?

Suddenly, I discovered a price that was not available on its website (CapitalRx only provides 5 choices in the immediate vicinity of your zip code, whereas it expands it on your phone): Using a CapitalRx Advantage Savings coupon AT Costco yielded a price of just $6.54 for a 90-day supply of 10 mg tablets of rosuvastatin calcium tablets! I really couldn't believe it. I will verify this at Costco pharmacy, of course, and then ask them if I can fill future refills via its mail-order pharmacy to avoid the parking nightmare that is my local Costco store.

CostPlus Cash-Pay Only Rx Drug Options

There is yet another worthy alternative possibility worth looking into:

A growing roster of cash-only (no insurance accepted) pharmacies now exist, including most prominently Mark Cuban's CostPlus Drug Company https://costplusdrugs.com/. I discovered Mark Cuban's CostPlus Drug Company sells 10 mg tablets of generic Crestor for $5.70 for a 90-day supply + $3.00 Pharmacy Labor Fee + $5.00 shipping charge bringing its total cost for the drug to an impressive $13.70 which was quite good. But I double-checked several less heard-of rivals, including Blueberry Pharmacy https://blueberrypharmacy.com/ based outside of Pittsburgh which gives the customer a choice from several generic manufacturers (the cheapest of which was priced at $17.20 for a 90-day supply manufactured by Ascend Laboratories) or a Texas-based rival ScriptCo Pharmacy https://scriptco.com/ which had prices generally comparable to Blueberry.

And My Likely Winner Was Mark Cuban's CostPlus Drug Company, Possibly With Costco/CaptialRx PBM Coupon as the Alternative

While the Costco/CapitalRx combination seemed to be the lowest-price, things could potentially change by January. However, a big reason I might still opt to go with CostPlus is because it has no "membership fee" which has to be factored into the equation for total out-of-pocket. Remember, this is to buy a single generic drug made in India. I don't use many others and don't want to pay for membership (Blueberry charges $5/month, ScriptCo has a $50 membership fee which is billed quarterly, up to $200 annually which supposedly covers the cost of shipping. But you need to use a LOT of generic drugs to justify that). Also, big pharmacy chains like Walgreens also have a prescription savings club which charges an annual fee of $20. However, my general rule is to never pay any sort of membership or enrollment fee.


 

 

 


The point is the number of options for getting generic drugs like generic Crestor by bypassing insurance has never been greater. Unfortunately, patients are left to figure it all out by themselves which is a major hassle. As I said, I think I'll go with Mark Cuban's CostPlus for this go-around given its prices seemed to be lowest and most reliable at those prices. But I won't again be victimized by PBM and insurance company gamesmanship on what are supposed to be inexpensive generic drugs.

Again, I wish this nonsense wasn't necessary, but at least I'm more competent in the Rx shopping game than most others. Maybe someone can use my experience as a guide.

Author P.S., September 23, 2022: So, I recently filled a prescription for a 90-day supply of generic Crestor (rosuvastatin calcium) 10mg tablets. This was an example whereby I opted to simply bypass the pharmacy benefit of my own insurance because my own insurance company's PBM Caremark was ripping me off. That happens about 25% of the time according to academic research. I actually bypassed insurance since the beginning of the year. Initially, I got the medicine from rival Optum Store (which is owned and operated by United Healthcare Group). For the first three refills, I paid just $15 compared to $23.40 Caremark intended to charge me. Then, with my last refill, Optum unexpectedly raised the price to $21, which was still less than the price Caremark would have charged me. Still, I was perturbed by a 40% price increase, but I had no refills remaining, so I paid it knowing it was still a tiny bit cheaper than Caremark would have charged me. I could have insisted that Caremark pay for this drug since satisfying my deductible, but the savings wasn't worth the hassle, hence I simply opted to continue bypassing my own insurance for this medicine.

I ended up buying generic Crestor at Mark Cuban CostPlus Drug Company for a price of $10.70 (and the price includes $5 for shipping), which was actually a price reduction from what I paid earlier. Mark Cuban CostPlus Drug Company also revealed an NDC number, which was 72205000399. A quick search on the internet at NDCList.com https://ndclist.com/ revealed that particular drug was actually sourced from Novadoz Pharmaceuticals, LLC, which is a Piscataway, New Jersey-based generic drug company, although I believe the company relies on contract manufacturers with suppliers located in India. Still, the point was that all of the big PBM's are currently selling generic statin drugs for really rediculous, marked-up prices right now. Not even Costco had a good deal (they were charging more than $20 for the same quantity of the same drug), so I went with CostPlus Drug Company, and I was satisfied I had made a rational decision.

Wednesday, August 17, 2022

Lilly Pulls the Plug on Mix-and-Inject Glugagon Rescue Kits

For those who didn't hear the news when it broke, diaTribe news reported (see https://diatribe.org/glucagon-options-expand-lilly-discontinues-emergency-kit for the news) that Lilly announced that the company intends to discontinue manufacturing its traditional Glucagon Emergency Kits https://www.lillyglucagon.com/ by the end of 2022. The kits are old-school, mix & inject kits which many patients (and caregivers alike) really despise because they are rather cumbersome and inconvenient to use when time is of the essence. Having an unpopular product works in the absence of competition, but when newer, more convenient products or cheaper generic products emerge, the product has reached the end of its product lifecycle.




 

 


Previously, on July 24, 2019, Lilly announced (see https://www.prnewswire.com/news-releases/baqsimi-glucagon-nasal-powder-3-mg-the-first-and-only-nasally-administered-glucagon-to-treat-severe-hypoglycemia-in-adults-and-children-with-diabetes-ages-four-years-and-older-approved-by-fda-300890782.html for details) that it had received FDA approval for BAQSIMI (see the FDA approval letter at https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2019/210134Orig1s000ltr.pdf for details) which aimed to be a more convenient and easier-to-use glucagon product. Some patients don't like the nasally administered product and therefore prefer easier-to-use "pens" which are similar to EpiPens. Fortunately, those options now exist too.

Cause #1: Newer, More Convenient Glucagon Products

Lilly said that the different, newer glucagon products including the company's own proprietary form of glucagon branded as BAQSIMI as the main reason sales are declining on the older glucagon rescue kits. Personally, I'm not a big fan of BAQSIMI because I used it once and got a terrible bloody nose and I must have used an entire box of tissues to stop it from bleeding (my bed sheets still have blood stains), but to each his or her own; not exactly the way I wanted to recover from a hypo.

But a number of other more convenient rivals including autoinjector pen devices now exist including Xeris Pharmaceuticals, Inc. which received FDA approval for its Gvoke glucagon prefilled syringes and ready-to-use glucagon rescue pens on September 10, 2019 https://www.businesswire.com/news/home/20190910005829/en/Xeris-Pharmaceuticals-Receives-U.S.-FDA-Approval-GVOKE%E2%84%A2/ and then in 2021.

Then, on March 22, 2021, Zealand Pharma received FDA approval (see the press release at https://www.globenewswire.com/news-release/2021/03/22/2197267/0/en/Zealand-Pharma-Announces-FDA-Approval-of-Zegalogue-dasiglucagon-injection-for-the-Treatment-of-Severe-Hypoglycemia-in-People-with-Diabetes.html for detail) for its dasiglucagon analogue product which is branded as Zegalogue and has an aggressive manufacturer coupon program, plus the product is being trialed in Beta Bionics' dual-hormonal insulin/glucagon pump which also has the ability to reverse low blood sugars. Collectively, these rival products have no doubt decreased demand for Lilly's older Emergency Glucagon Kits.

Cause #2: Cheaper Generic Glucagon Products

Left unsaid in diaTribe's announcement is the emergence of cheaper generic glucagon products which are now competing aggressively on price with old-school kits from Lilly and Novo Nordisk (those products are generally commercialized without rebates to PBM's since many generics tend not have back-end rebates to PBM's).

For example, the FDA announced on December 28, 2020 that it had formally approved an abbreviated new drug application for glucagon for injection 1 mg/vial in an emergency kit, manufactured by Amphastar Pharmaceuticals Inc. for its glucagon injection emergency kit which was approved under the FDA's abbreviated new-drug application (ANDA) required for generic drugs. The Amphastar glucagon product was reportedly the first-ever generic glucagon product approved by the FDA using the FDA's abbreviated new-drug application (ANDA) process required for generic drugs. See the Amphastar press release at https://www.globenewswire.com/news-release/2020/12/29/2151177/0/en/Amphastar-Announces-Approval-for-Glucagon-for-Injection-Kit-1mg.html for details.

But Amphastar's generic market exclusivity didn't last long.

Also in 2020, rival Fresenius Kabi USA which is based in Lake Zurich, IL (in suburban Chicago, although the parent company is based in in Bad Homburg near Frankfurt, Germany) which announced that it had also received FDA approval for a new, generic glucagon kit. See Fresnius Kabi USA's press release at https://www.businesswire.com/news/home/20200205005106/en/Fresenius-Kabi-Introduces-Glucagon-Emergency-Medicine-Kit for details.

FDA's Sally Choe, Ph.D., who was the the director of the Office of Generic Drugs in the FDA's Center for Drug Evaluation and Research, said (see the FDA press release at https://www.fda.gov/news-events/press-announcements/fda-approves-first-generic-drug-used-treat-severe-hypoglycemia for details) said at the time "Until today, there has been no approved generic of this important drug that can save the lives of people who may experience the serious condition of very low blood sugar."

Cho added: "Today's approval reflects the FDA's continued commitment to advancing patient access to lower-cost, high-quality generic drug products that are as safe and effective as their brand name counterparts. Supporting development and expanding opportunities to bring generic copies of complex drugs, like glucagon, to the market has been a major focus of our efforts to improve competition and help lower drug prices."

At the time of the first-ever FDA-approved generic glucagon product, Amphastar revealed that it estimated (see https://www.thestreet.com/investing/amphastar-generic-hypoglycemia-injection-fda-approval for detail) that U.S. sales for Eli Lilly's Glucagon rescue kit were about $144 million and that overall U.S. sales of branded products containing glucagon for injection, 1 mg, were about $306 million for the 12 months ended September 30, 2020.

In response to declining sales due in part to more convenient, newer options as well as much cheaper generics, on August 1, 2022, Lilly formally announced it will cease production of its traditional Emergency Glucagon Kit on December 31, 2022. It's pulling the plug on a product which is effectively dying in terms of sales. The old-school glucagon products have been on the market since the early 1960's.

Sarah Noel, senior director of US Diabetes Advocacy & Professional Relations at Lilly, said "By announcing Lilly's Glucagon Emergency Kit discontinuation well in advance of the last manufacturing date, we can help people who have traditionally relied on our Glucagon Emergency Kit to prepare and discuss alternative glucagon options with their healthcare providers."

Left unsaid on Lilly's announcement that it will discontinue making old-school glucagon kits is the uncomfortable reality that significantly cheaper (for PBM's, anyway) generic forms of glucagon rescue kits from generic manufacturers including Amphastar Pharmaceuticals and Fresnius Kabi USA which have further accelerated the decline in sales of traditional, mix & inject glucagon products from both Lilly and Novo Nordisk (both of which remain curiously very heavily-rebated to Pharmacy Benefit Managers ["PBM's"] causing retail prices for patients to sell for more than $300 per kit which represents sickening price mark-ups.

Novo Nordisk: An Also-Ran in Glucagon, But its GlucaGen HypoKit Remains (For Now)

Rival Novo Nordisk has not (yet) announced any plans to discontinue its own traditional mix & inject glucagon emergency kit which it brands as GlucaGen HypoKit https://www.glucagenhypokit.com/. Unfortunately, Novo Nordisk is essentially addicted to PBM rebates to commercialize all of its products in the U.S., and as a result, its traditional glucagon treatment has an artificially-inflated retail price since the company has focused exclusively on selling via the PBM channel rather than directly to patients, and the PBM channel requires massive rebates totalling more than a quarter of a trillion dollars annually across all drug classes.

On insulin, for example, Novo Nordisk has repeatedly told investors that it's now rebating 74% of its gross U.S. sales to PBM's in the form of rebates. Unfortunately, Novo Nordisk's U.S. margins are declining as a result; the company relies on GLP-1 products for virtually all of its U.S. revenues right now. The U.S. is no longer a growth engine for the company's profits, but it's a global company and can rely on profits abroad to keep profits flowing.

Novo's Previous GlucaGen HypoKit Outsourcing Mess

Prior to 2011, Novo Nordisk did not even manufacture its own GlucaGen HypoKits. Instead, the Danish company relied upon contracting manufacture to Boehringer Ingelheim's Bedford, Ohio plant. But the FDA found that particular facility had rusty tools, mold, and a barrel of 'unknown liquid', which was later revealed to be urine from factory workers who were not permitted to leave the factory floor for restroom breaks, suggesting poor oversight and management. The Bedford, Ohio site was ultimately shut down when FDA regulators repeatedly cited the facility for GMP noncompliance violations, and the cost of cleanup made it cheaper for the company to simply shut it down and open a newer, compliant manufacturing facility located elsewhere. Since that happened, Novo Nordisk just imported its glucagon kits which are made in its own site in Denmark. Because it pays so much in rebate dollars to PBM's, it's GlucaGen HypoKit has never really been a huge seller and its not particularly profitable for the company. But because its not a big seller, importing the product is relatively easy for the company.

Novo Nordisk does not currently have a "modern" glucagon rescue product sold in the U.S., putting the company at a competitive disadvantage in that therapeutic class of drugs. Today, Novo Nordisk is exceptionally dependent on revenues from its Type 2 diabetes GLP-1 inhibitors and various line extensions as weight-loss drugs, although rival Lilly sells one called Trulicity which was approved by the FDA in September 2014.

Lilly and then-partner Amylin Pharmaceuticals effectively created the GLP-1 space with the product formerly known as Byetta (exenatide), the two companies' partnership rather unceremoniously ended when Lilly's former CEO dumped Amylin to sign a new partnership with rival Boehringer Ingelheim Pharmaceuticals which ended with an announcement made on November 8, 2011 (see https://www.fiercebiotech.com/biotech/lilly-and-amylin-mutually-agree-to-end-diabetes-alliance-and-transition-exenatide for details).

Seeing the rebate-driven mess causing its insulin margins slip, Novo Nordisk copied and ultimately improved upon the GLP-1 drug category, while Lilly's Trulicity was late to the GLP-1 inhibitor drug category, although its Trulicity pen injector device is pretty clever (and it takes some innovation considering how rival Novo Nordisk has an entire team dedicated to insulin pen injector devices and has dominated that space for decades). When Lilly brought Trulicity to market, instead of sending hundreds of salespeople to endocrinologists and other doctor's offices, or producing expensive mass advertising, Lilly initially focused its marketing of Trulicity on insurance company payers, specifically those in commercial managed care. It saw some success there, and that really forced Novo Nordisk to aggressively compete very aggressively on its rebated prices.

Still, Lilly's Trulicity was essentially a very late "me-too" (or "me-better") drug. However, that was launched before biosimilars which are now pending approval which are likely to shake the market up further which won't really help Novo Nordisk or Lilly. There will be at least a half-dozen biosimilars of Novo Nordisk's first generation GLP-1 drug originally branded as Victoza (Biocon has one, as does Lannett/HEC and several other companies). Once biosimilars of that product hit the market, market conditions will become a whole lot tougher for branded products because the cheaper, unrebated biosimilars may become favored or else the branded products will have to increase their kickbacks ("rebates") to PBM's. Remember: 74% of Novo Nordisk's U.S. sales are today being pissed away as rebates paid to PBM's. Is it going to increase them even more so it's paying 99% of gross sales? That seems pretty unlikely.

Biosimilars Aren't Generics; Neither Are Generics -- Anymore

There was once a time whereby generics came to the market and that spelled the end of fat profits for branded drugs. But PBM's no longer work to or even really pretend to save money for anyone other than insurance companies anymore. They are now vertically-integrated with insurance companies, so their primary motive is to keep profits flowing to firms like United Healthcare, Cigna and CVS Health's Aetna business. Profits are the only thing that matters to PBM's anymore. The PBM business is also a convenient work-around to an ACA rule which requires that insurance companies commit at least 80% of premium dollars collected be allocated to health care, instead of CEO pay. But PBM revenues are not premium dollars, so the CEO's can still get massive compensation if they have a profitable PBM business.

Today, generics no longer necessarily dominate the end of a branded drug's lifecycle. The drug industry has work-arounds to extend their product lives, including so-called "authorized generic" drugs which are branded drugs with a generic drug name on the label. That matter resulted in the FDA being forced to expand the National Drug Code numbering system (catch my coverage of that HERE). Instead, today, secret rebates paid to PBM's dominate U.S. prescription drug spending. Until the FTC finishes its formal study of PBM contracting practices (much of what they do appears to be at best, marginally legally-exempt or at worst, illegal), that's the corrupt world we live in. Then, once a formal study from FTC wraps up, the U.S. Department of Justice may ultimately be forced to sue and that will also take some time. 

Remember when the DOJ broke up AT&T in the telephone space? Today, the old AT&T monopoly no longer exists. Today's AT&T is re-assembled pieces of the former regulated monopoly which were re-assembled by the Baby Bell formerly known as SBC. But rival Verizon has its own strategy with a focus on mobile and broadband internet delivered via fiber optic cable in certain Northeastern states, so its fair to say that more than a few of the old AT&T's pieces today aren't exactly gems.

Anyway, while Lilly pulling the plug on old-school, mix & inject glucagon rescue kits is indeed the end of an era, it doesn't spell the end of the product (just from Lilly). While patients and caregivers prefer more convenient, newer options, cost-conscious buyers have several generic alternatives to choose from. Now, if only the U.S. can fix the PBM rebate kickback problem, we might see progress in reducing prescription drug prices. There, the FTC and ultimately the U.S. DOJ will play a critical role in undoing the damage of bad policy choices which have aggravated the problems rather than fixing them.

Thursday, August 04, 2022

UHC's August 2022 Optum Insulin Announcement: More PR Fluff? We Don't Really Know.

On August 1, 2022, United Healthcare Group's PBM business known as Optum made a press release of its own related to insulin:

Optum to Offer Lower-Cost Insulin for Uninsured People Living With Diabetes on Optum Store  https://www.businesswire.com/news/home/20220801005282/en/Optum-to-Offer-Lower-Cost-Insulin-for-Uninsured-People-Living-With-Diabetes-on-Optum-Store/

This comes on the heels of United Healthcare's own goodwill-generating PR move made on July 15, 2022 which was as follows:

UnitedHealthcare To Eliminate Out-of-Pocket Costs on Several Prescription Drugs, Including Insulin, for Eligible Members https://www.businesswire.com/news/home/20220715005174/en/UnitedHealthcare-To-Eliminate-Out-of-Pocket-Costs-on-Several-Prescription-Drugs-Including-Insulin-for-Eligible-Members

I quickly tore the United Healthcare announcement to shreds, citing the headline which said it ONLY applied to "Eligible Members", and how healthcare insurance industry critic Wendell Potter did the math in his own article (see https://wendellpotter.substack.com/p/its-just-spin-unitedhealth-group for his assessment) on the United Healthcare announcement, concluding "The money 1.3% of United's health plan members might save in out-of-pockets on insulin and a few other medications likely won't amount to a rounding error for this enormous company."

Regardless, Optum's own, more recent goodwill gesture deserves its own assessment, so here it is.

First, Optum's press release was deliberately vague, saying:

"People can access Optum Store to determine whether their insulin is part of the affordability program, get qualified and download an insulin savings card, and then fill their prescription at the $35 price point at any retail pharmacy."

Let me start by saying that any patient, using a Sanofi ValYou coupon, can now buy any Sanofi insulin for a price of $35/vial, and from virtually any pharmacy. Patients don't need to buy it online from Optum Store. So that struck me as rather odd.

That said, it's also completely unclear if any of the Optum PBM's preferred "formulary" brands of insulin (currently, the UHC preferred formulary brand of insulins for 2022 are those made by Eli Lilly & Company, which includes such brands such as Lyumjev, the marginally faster prandial analogue approved by the FDA on June 15, 2020). 

It's very possible the Optum move merely includes insulin varieties sold to anyone at a discount with a manufacturer or PBM coupon, such as "authorized generic" products such as Lilly Insulin Lispro Injection U-100, as well as Sanofi's entire insulin portfolio, which that company announced effective July 1, 2022 would be available to anyone with a Sanofi ValYou coupon (see my coverage HERE). The press release said: "By working with Sanofi, we will improve access and lower costs for people who need this life-saving medication."

So, it appears Optum is using Sanofi's previously-announced insulin price-cut to make itself look like a hero. My biggest question is whether Optum will offer consumers via its Optum Store the same discounts it offers to its insurance plan sponsor clients, such as branded Lilly insulins such as Lyumjev or Humalog?

We simply don't know these answers to my question. 

But if it's anything like the July 15, 2022 United Healthcare insulin announcement, it looks more like the company is simply trying to prove to lawmakers in Congress its actually doing something while actually doing nothing (positioning a program already announced by Sanofi as something Optum is doing to try and ensure widespread insulin affordability while keeping its formulary brands out of the hands of masses.

Americans are growing tired of the insurance company/PBM complex PR stunts. We KNOW with absolute certainty that PBM's are responsible for drug list price growth, and the reality that patients satisfying deductible are forced to pay list prices. Instead, Optum might want to make Optum Store a destination to access the company's entire negotiated price portfolio; that might shake things up. But we can expect them not to do so because they don't want to cannibalize their own plan-sponsor clients. Even though they do just that.

Tuesday, August 02, 2022

FDA Moves to Expand NDC Numbering to Accommodate Rapid Rise in "Authorized Generic" Drugs

On July 22, 2022, the U.S. Food and Drug Administration ("FDA") announced a proposed new rule (see https://www.federalregister.gov/documents/2022/07/25/2022-15414/revising-the-national-drug-code-format-and-drug-label-barcode-requirements for the announcement in the Federal Register, or the FDA's own page on the announcement at https://www.fda.gov/drugs/drug-approvals-and-databases/proposed-rule-revising-national-drug-code-format, effectively Revising the National Drug Code Format and Drug Label Barcode Requirements (Docket No. FDA-2021-N-1351), that is intended to minimize the impact of the FDA running out of ten-digit national drug codes (NDC's) by adopting a single, uniform 12-digit format for FDA-assigned NDC's. In other words, its expanding the NDC numbering system from 10-digits to 12-digits.





 

 

 

 





In recent years, because of the manner in which vertically-integrated (with commercial healthcare insurance companies) Pharmacy Benefit Managers ("PBM's") aggregate Rx rebate dollars (forcing drug list prices to INCREASE as a result), FDA has seen many drug manufacturers respond by introducing so-called "authorized generic" products (the FDA defines an "authorized generic" as exactly the same product as an approved branded drug, but is marketed without the brand-name on the label) in an effort to try and bypass the impact of PBM rebating which puts upward pressure on drug list prices, and make the "authorized generic" drug products more affordable.

People with diabetes have benefited directly from the dual branded/unbranded strategy.  



 

 

 

 



In March 2019, Eli Lilly & Company, Inc. announced it was introducing an unbranded prandial insulin analogue identical to brand-name Humalog. Rival Novo Nordisk announced a nearly identical plan to introduce Novo Nordisk Insulin Aspart Injection U-100 in September 2019. Sanofi followed suit three years later when it formally announced the launch of Sanofi Insulin Glargine U-100 earlier this year, and offered coupons for patients to buy any Sanofi insulin for a price of $35/vial (exactly the same price as Lilly Insulin Lispro Injection U-100 now sells for with a manufacturer coupon). Even biosimilar makers are selling branded/unbranded products. Biocon (and current U.S. partner Viatris) sell both the interchangeable (with Sanofi Lantus) glargine product branded as Semglee, and a separate NDC number which sells for 65% less called Viatris Insulin Glargine Injection U-100.

To be sure, the dual branded/unbranded strategy has proven to be a very effective method of reducing patient out-of-pocket costs. This is particularly true on very heavily-rebated classes of drugs like insulin.

For example, Novo Nordisk A/S revealed in the company's 2021 Annual Report that the company's insulin affordability offerings in the U.S. had reached "more than 1 million people" in 2021. 


 

 

 

 

 

Rival Sanofi revealed that Sanofi's recently modified "ValYOU" coupon program was "Used more than 97,000 times, providing more than $37 million in savings to people living with diabetes" in the U.S. during 2021. And, that was before the company reduced its insulin prices from $99/vial to $35/vial.

 



 

 

 


 

 

Meanwhile, Lilly revealed to investors that since Lilly introduced its unbranded insulin lispro product in late 2019, its unbranded insulin called simply Lilly U-100 Insulin Lispro Injection now accounts for nearly 1/3 of the company's total U.S. Humalog sales (and that shift has occurred in less than 3 years on the market). In fact, that shift on Humalog to Lilly Insulin Lispro required virtually no marketing, no army of salesmen/saleswomen calling on doctors offices and no costly TV ads.




 

 

 

 

To be sure, insulin-makers aren't the only ones introducing less costly "unbranded" prescription drugs. We are seeing it happening in countless therapeutic classes of prescription drugs. FDA maintains a listing of "authorized generic" drugs HERE. For example, there are "authorized generic" versions for erectile dysfunction meds, depression meds and more. All told, there are currently nearly 2,000 "authorized generic" medicines now on the market. They have become popular with manufacturers because it's a way of extending the product lifecycle for now patent-expired drugs without ceding sales to generics.

As a result of this uniquely American problem in prescription drug affordability, the number of identical drugs with different NDC numbers has grown quite rapidly. The FDA hopes that by expanding the numbering system it can accommodate the demand for new NDC numbers.

I certainly support the FDA's efforts to accommodate the rapid growth in authorized generic drugs. I only wish it wasn't a necessity.