Friday, June 02, 2023

Podcast Episode Recommendation: Dear Diabetes Podcast with hostess Reneé Rayles Episode 7


The Dear Diabetes Podcast with hostess Reneé Rayles is a relatively new podcast covering the subject of diabetes; it began quite recently on March 29, 2023. However, Reneé Rayles recently interviewed Civica, Inc.'s current CEO Ned McCoy.  Recall that on June 1, 2023, Ned McCoy succeeded Martin VanTrieste as Civica's President and CEO (see the press release at for details). She spoke with Mr. McCoy about the company's affordable insulin biosimilar effort, which is proceeding according to plan. It has been a while since anyone spoke with Mr. McCoy about its biosimilar insulin plan.

Civica has released news about many key steps in its affordable insulin plan along the way, and I am sharing those in this post.

For example, since the original March 3, 2022 Civica biosimilar announcement, the company's consumer-facing CivicaScript operating unit announced a partnership with the drug wholesaler formerly known as AmerisourceBergen (that company subsequently changed its name to Cencora) [see AmerisourceBergen Kicks Off Strategic Relationship with Civica, January 23 2023, BusinessWire, AND Drug Wholesaler AmerisourceBergen Announces Intent to Change Name to Cencora, January 24, 2023, BusinessWire, for news about its name-change] as its drug distribution partner to get its insulins on pharmacy shelves nationwide.

Last June, Civica selected a Germany-based org. known as Profil to undertake necessary clinical trials needed to secure FDA approvals (see Civica Selects Profil as Clinical Trial Partner for Affordable Insulin Initiative, June 2, 2022, BusinessWire,

In January 2023, Civica signed an agreement with Switzerland-based Ypsomed to license that company's insulin pen designs (see Civica Welcomes Ypsomed as Injection Pen Partner for Its Affordable Insulin Initiative, January 31, 2023, BusinessWire, Since then, Ypsomed has revealed to investors that it will supply Civica with the company's disposable UnoPen design.

Civica also signed contracts with a few innovative PBMs (both of which are Public Benefit Corporations which do not engage in "spread pricing" which are known to push prescription drug prices up) to work with insurance companies to gain coverage, including both Navitus and EmsanaRx (also note that on May 16, 2023, EmsanaRx announced it was changing its name to AffirmedRx) to help with insurance company coverage.

For the news releases on Civica's announced PBM partnerships, see: Navitus Health Solutions Joins CivicaScriptTM to Further Availability of Lower-Cost Generic Medications, July 13, 2022, BusinessWire,, and EmsanaRx Joins CivicaScript to Make Lower-Cost Generic Medicines Available to its Pharmacy Benefit Members, June 14, 2022, GlobeNewswire, and the name change  was revealed at EmsanaRx, PBC Announces Corporate Name Change to AffirmedRx PBC, May 16 2023, EIN Presswire,

Finally, I would be remiss if I failed to acknowledge the fact that Civica's consumer-facing CivicaScript operating unit is already selling at least one prescription drug to patients which resulted in major price-cuts for the drug across the industry. The company makes and sells the generic drug at prices which were much lower than what it sold for before Civica stepped-in (see CivicaScript Announces Launch of its First Product, Creating Significant Patient Savings, August 3, 2022, BusinessWire, for details on that). 

Collectively, these Civica insulin (and a few related) press releases prove without doubt that Civica knows what it's doing, and that its announced introduction dates are very likely to be true. I fully expect we shall see Civica insulin biosimilars in 2024, but more importantly, they will re-introduce the concept of therapeutic choice in insulin therapy to doctors and their patients, rather than the routine non-medical switching of non-interchangeable (according to FDA) insulins based on whoever is paying the PBM the biggest rebate kickbacks. That's how things used to work until PBMs decided it was better to help themselves than it was to save everyone else money.

For its part, Civica has said all along that the company aimed for "market impact" rather than market share with its affordable insulin initiative. The company forecast that it anticipated making enough insulin to supply about 30% of the U.S. insulin market, although it could expand capacity if necessary. But Civica never aimed to unseat Novo Nordisk or Lilly, but force them to opt out of the PBM kickback scheme and lower their prices. That finally happened in March 2023.

Big three branded insulin makers (Lilly, Novo Nordisk and Sanofi) each announced in March 2023 (catch my coverage at AND of their intention to slash insulin list prices, in order for big insulin to cut their insulin prices, they will effectively opt-out of the PBM commercialization channel which requires huge legally-exempted cash rebate kickbacks paid to PBM formulary managers which amounted to an estimated total (across all drug classes) $236 billion annually as of 2022 according to estimates from Pembroke Consulting. We also know thanks to USC research that about half of all that cash was lining the PBMs' pockets (see for more).

Since 2019, the big three branded insulin-makers have seen the evidence they needed that it was safe for them to "opt out" of the PBM commercialization channel for (at least for patent-expired) insulins. In effect, PBMs threatened them that insulin price reductions would result in the insulins being dropped from formularies. But last spring, Lilly told investors that nearly one-third of domestic Humalog sales were the unrebated, unbranded version rather than the heavily-rebated (to PBMs) branded version. In the company's 2021 Annual Report, rival Novo Nordisk also revealed that more than 1 million Americans had taken advantage of the company's "affordability options" and the biggest component of that are the company's two unbranded "authorized generic" versions of Novolog and Tresiba (Novolog/aspart being the much bigger seller of the two). Collectively, this information provided sufficient proof that big insulin really did not need PBMs to sell their insulin (at least patent-expired varieties). PBMs then tried to say they would dump other drugs made by the same manufacturers from their formularies, but that never happened, which proved the PBM were bluffing on that.

One thing Civica's President Ned McCoy did not really acknowledge in this podcast was the reality that the Civica biosimilar insulins will actually be cultured in GeneSys Biologics laboratories located offshore in Hyderabad, India (see the company press release at for details on that). The insulin Active Pharmaceutical Ingredient ("API") will then be shipped to a Civica "fill & finish" facility in Petersburg (in Chesterfield County), Virginia near the state capital of Richmond in the Meadowville Technology Park where the insulin APIs made in India will be packaged into vials and insulin pens and distributed nationwide. All biosimilars plan to make the insulin APIs offshore (so far, all of the publicly-held companies have announced they will make the insulin APIs in Malaysia, India and China). Originally, the biosimilar plan was to use the margins derived from that to pay PBMs legally-exempted rebate kickbacks, but now it looks as if that won't be necessary. But they may have to slash their prices, instead, so it looks like a wash from a business perspective.

While the Dear Diabetes Podcast does not appear to break any new ground which hadn't already been addressed after the March 3, 2022 announcement (I covered several podcasts including HERE and HERE), the interview was with the new company CEO, hence we can get his unique perspective on the company's biosimilar insulin plan, and he does talk a bit more about how the company is implementing its commercialization plan for the company's biosimilars of Lantus, Novolog and Humalog.

The link to Dear Diabetes Podcast with hostess Reneé Rayles Episode 7 can be listened to below, or by visiting

Thursday, June 01, 2023

Humira Biosimilar Gross-to-Net Pricing Bubble Was Preceded by the Same Pricing Bubble Burst for Insulin Just Months Ago

Today's post is not about diabetes per se, although there IS a diabetes connection. But this morning, the big news was that a biosimilar of Abbvie's blockbuster anti-inflammatory biologic Humira will be sold by Mark Cuban Cost Plus Drug Company (see the press release at for more) at what amounts to an 85% discount to the innovator drug. Mark Cuban Cost Plus Drug Company announced the Humira biosimilar on social media today. See the Tweet thread below, or by visiting

While there are seven biosimilars of Humira which have been approved by FDA (see, many were approved but delayed due to patents which were due to expire before the biosimilars could come to market, hence so far, none of the Humira biosimilars which have launched have been particularly aggressive on prices.

Until now!

Abbvie's Humira is currently the best-selling prescription drug in the U.S.. More than 300,000 patients in the U.S. take Humira each year, and it costs the U.S. healthcare system a stunning $90,000 per patient each year according to some estimates. AbbVie generated $21.2 billion in Humira revenue in 2022 alone. Now, a Redwood City, California company known as Coherus BioSciences Inc. plans to sell an interchangeable biosimilar of Humira at a price of about $13,000 per patient each year, which amounts to an 85% discount. Mark Cuban Cost Plus Drug Company will sell the biosimilar for $569.27 for a two-dose carton. The company aims for prescription drug price transparency and marks every drug it sells up by 15% plus a distribution fee. More recently, it has expanded to a network of independent retail pharmacies who accept the Team Cuban Card which is currently available as a Beta Test in California, Florida, Indiana, New Jersey, New York, Pennsylvania and Texas, but it began in just four states not long ago and has since expanded. That is also how the company aims to handle biologics which require more careful temperature controls, but it could prove far more disruptive to the PBM dominated prescription drug market than the PBMs realize.

Although the Coherus biosimilar adalimumab product was actually approved by the FDA on December 20, 2021, Coherus agreed by arrangement with AbbVie (the maker of reference adalimumab branded as Humira), that the Coherus biosimilar product would not be launched until July 2023. The Coherus biosimilar is indicated for all eligible conditions of Humira, including plaque psoriasis, psoriatic arthritis, rheumatoid arthritis, juvenile idiopathic arthritis, ankylosing spondylitis, Crohn's disease and ulcerative colitis. But not all biosimilars are approved for every indication as the innovator, Coherus' biosimilar is, and it also has the FDA designation of being interchangeable with Humira. 

Pharmacy Benefit Managers have tried very hard to stop this type of competition (low cash prices) from emerging because the legally-exempted rebate kickbacks generate so much money for them. Really, they are just misappropriating money paid by drug companies intended to be used for patient financial relief, but instead the cash flows to the parent companies of the PBMs, which are big, vertically-integrated commercial healthcare insurance companies (except for CVS Health, which was a slight role-reversal when a PBM acquired insurance company Aetna back in 2018). Some of the companies such as United Healthcare's OptumRx PBM business pass the rebates back to United Healthcare which then uses those dollars given to employer plan sponsors as "premium offsets" so the company can sell even more insurance policies. Cigna's Express Scripts does the same thing. CVS Caremark does the same thing with Aetna, although Aetna is a smaller insurance carrier based on number of covered lives.

Coherus BioSciences Inc. announced that it will launch the cheapest-ever Humira copycat, to be branded as Yusimry in July 2023, with a list price of $995 for two autoinjectors, the company said on June 1, 2023. That's far below the $6,922 AbbVie currently charges for the same supply of its branded drug Humira.

However, the Coherus/Mark Cuban Cost Plus Drug Company Yusimry move could put added pressure on other biosimilar-makers including Amgen which now sells two identical biosimilars to Humira (including a high-price/high-rebate version targeting the commercial payer/PBM market branded as Amjevita, and a second unbranded product sold under the generic drug name adalimumab which is about 55% cheaper than Amjevita. Amgen is a big biosimilars seller, and is trying to play both sides of the market. But it has not been as aggressive as Coherus on prices, but the company could modify its own pricing strategy in response. Ideally, that is what SHOULD happen in a truly competitive market.

The era of easy money on Humira and its copies seems to be ending a bit sooner than the PBM's had anticipated. Consider the more than a decade of financial gamesmanship they played on insulin prices. In 2019, Lilly and Novo Nordisk introduced unbranded versions of several insulin varieties (including Humalog, Novolog and Tresiba). In 2022, Sanofi's Winthrop business unit launched an unbranded version of Lantus as well. But true biosimilars are now on the horizon from Civica/GeneSys Biologics, Sandoz/Gan & Lee, Lannett Company/HEC, and Amphastar/ANP as well as the branded/unbranded versions of glargine from Biocon which also has an aspart biosimilar in developments. Numerically, the most biosimilars will be of Lantus, followed by Novolog, with Humalog expected to have just three. However, in March 2023, there was news that the gross-to-net pricing bubble on insulin prices had finally burst, when all of the three largest insulin manufacturers announced (see Lilly's March 1, 2023 announcement at, Novo Nordisk's March 14, 2023 announcement at and Sanofi's March 16, 2023 announcement at that they were slashing insulin list prices and they would pay for that by ending rebate kickback paid to PBMs to secure formulary placement. 

Recall that this was preceded by the nonprofit drug company Civica, Inc.'s announcement a year earlier (see its announcement at for some details, along with a concurrent press release on the Civica biosimilar insulin announcement from JDRF at — note that JDRF's version of the press release specified actual maximum out-of-pocket insulin prices, while Civica's press release revealed it would acquire the insulin active pharmaceutical ingredients from Hyderabad, India-based GeneSys Biologics) of its intention to sell biosimilars of the three bestselling insulins at a maximum retail price of no more than $30 a vial or $55 for a box of 5 prefilled insulin pens. Almost exactly one year later, the three major branded insulin sellers (Lilly, Novo Nordisk and Sanofi) each announced they would match Civica's biosimilar prices, and to do so, they would stop paying rebate kickbacks to PBMs for preferred formulary placement. For its part, Civica said its intention all along was to disrupt the artificial inflation in the insulin market, and it was not aiming for market share, but for market impact.

While Humira involves a lot more money in rebate kickbacks than insulin, suddenly, what some refer to as the "gross-to-net" bubble seems to now be deflating on that biologic, too. However, as Pembroke Consulting's Adam J. Fein predicted back in 2021 (see, the Semglee story shows just how weird 2023 might become when Humira biosimilars emerge. 

Make no mistake: there is still room to undercut Coherus prices on its Humira biosimilar. Remember: the cost of developing biosimilars is a fraction of what it cost the innovator originally. But the signs do look suddenly more ominous for entities like PBMs which have grown far too accustomed to being able to manipulate drug prices behind-the-scenes for their own financial benefit, often to sell more insurance policies in what the vertically-integrated insurer-PBM business viewed as a "virtuous cycle" for their own bottom lines. There was, of course, nothing virtuous about taking money which was intended for patient price relief and keeping it for themselves. Incidentally, on April 19, 2023, healthcare insurance industry whistle-blower Wendell Potter has observed several times in 2023 already (see for more) that the biggest commercial health insurance companies now earn more money as drug channel intermediaries than they do on their core insurance business, which incidentally, is incredibly profitable but no longer provides much room for growth.

The PBM industry is now reaping what it has sowed. I only hope it's as painful for PBMs as the marked-up prices were for patients!

Wednesday, May 31, 2023

Caremark's President Speaks at 'Forum 2023'

David Joyner is President & EVP of CVS' Caremark PBM business. Caremark refers to a recent event and business as "Payor Solutions" whose website is at Truth be told, CVS Caremark would rather patients whose insurance use Caremark as their PBM do not know what the PBM's executives say or do behind their veil of secrecy. Caremark is a business used to operating while serving itself first and everyone else as an afterthought.

On May 5, 2023, the Caremark PBM business of CVS Health hosted an event it called "Forum 2023", and Mr. Joyner gave a presentation on "What' next for payors". It was rather amusing that CVS Health said: "though the [PBM] system is working – from claim adjudication to drug dispensing, it's important that payors understand what's on the horizon". 

For example, David Joyner blames insulin manufacturers for continually raising prices, while ignoring the rebates his own industry and his company in particular work to "aggregate". 

He also talks only of how Caremark offers clients low "net" prices, while ignoring that the back-end rebate discounts are the very reason drug manufacturers are forced to raise drug prices so they can pay ever larger rebates to PBMs. 

Mr. Joyner addresses the recent developments in the insulin market and how that no longer appears to be a way for insurance companies (including one in his own company Aetna) use to bankroll premium offsets given to their employer clients and those rebates lower premiums for all at the expense of patients. He cites the spread between retail and list prices, while ignoring that his company is one of the only reasons those disparities exist. He also laments the PBM industry's weakness for lobbying advocacy in the states and how that could adversely impact the PBM business. He warns the audience that there are "over 900 bills" in states across the country targeting the PBM industry. In particular, he warns the states are targeting ERISA preemption, but recall that the Supreme Court essentially gutted ERISA preemption when it ruled unanimously on Rutledge v PCMA back in 2020 as far as PBMs are concerned. But remember: PBMs are notorious for lying with straight faces. Nothing the industry says or does should be presumed as true.

But because of wrongdoing of entities like Caremark, spread pricing exists. For example, I blogged about the insanity of my experience with Aetna/CVS Health/Caremark in getting a cheap generic statin drug made in India. 

Ultimately, because CVS Caremark was so aggressive in its spread pricing on that generic drug, that I as a patient covered by sister company Aetna actually noticed the games they were playing and initially, I simply patronized their biggest competitor: United Healthcare Group's OptumRx (catch my coverage of that experience HERE) saving myself 56%.

However, more recently, Optum has sold its Optum Store to a third-party entity known as RVO Health, LLC (see more about how Optum Store is getting out of the direct-to-consumer mail order pharmacy with limited exceptions HERE). Anyway, when they raised the price of generic Crestor 40%, I found a new supplier which was even cheaper: Mark Cuban Cost Plus Drug Company.  In fact, it was so cheap that I didn't even bother letting Caremark pay for it after I satisfied my deductible because it wasn't worth the temporary savings to do so.

In fact, "the system" as David Joyner describes it is working great for vertically-integrated insurance company payors like Aetna (whose sister business units include Caremark), rival Cigna (which owns Express Scripts) and the other rival United Healthcare (which owns OptumRx), but for every other payor including employers and patients, thanks to PBM financial gamesmanship, there are legitimate questions as to whether the system is really working. 

Prescription drug prices continue to go up and up and up, coverage complaints are endemic, and PBM's use cumbersome tools designed to reduce drug spending such as step therapy whereby a patient must fail first on a preferred formulary drug before the PBM will even cover alternative medicines their doctors actually prescribe, and runaway prices on commoditized prescriptions like insulin have forced manufacturers to launch unbranded, unrebated versions which are frequently even less costly for patients than to even use their insurance company's PBM formulary brands, all while PBM's contribute more to their parent companies' bottom lines than insurance premiums now do (if you believe healthcare industry whistle-blower Wendell Potter who wrote about that HERE). In his article, Mr. Potter opined:

"I've decided it's time to stop calling UnitedHealth and two of its biggest competitors–Cigna and CVS/Aetna–insurance companies. All three are now getting or making more money as drug supply chain middlemen than providing health insurance in the United States."

So, in Caremark's view "the [PBM] system is working – from claim adjudication to drug dispensing" when the data on everything else suggests otherwise. Still, David Joyner (President & EVP of CVS' Caremark PBM business unit) comments are worth a listen. The company disables sharing their videos, but anyone with rudimentary knowledge of html can figure out how to share it with a little work. Catch them at or see the video below. Other presentations made at that event can be viewed at

Saturday, May 06, 2023

"Endocrine News" Podcast Episode 69: Biosimilar Insulin

The Endocrine Society has several podcasts; one of its podcasts is known by the name of "Endocrine News". 

Ordinarily, I ignore most of the Endocrine Society podcasts because: a) they tend to be disproportionately focused on the topic of Type 2 diabetes and treatments for that and b) even when the podcast subject matter includes Type 1 diabetes, I find alternative sources provide considerably more information on the same topics. Partly, it is because the Endocrine Society's Endocrine News podcast tends to be only about 10-30 minutes in length which is frequently insufficient to address the topics they aim to address.


Still, I pay attention to their podcast topics and will occasionally listen if the topic is of interest. A recent episode featured an interview with Dr. Irl Hirsch, MD who is a professor of medicine at the University of Washington Medicine Diabetes Institute. In which he talks about biosimilar insulin: its safety, efficacy, what sets it apart from biologic "human" insulin, and when it should be considered for use.

Dr. Irl Hirsch, MD

Dr. Hirsch talks about insulin biosimilars as well as "authorized generic" versions of branded insulins (without actually calling them "authorized generics" in his dialogue, even though that's what the FDA considers them), but he also discusses the outlook for broader biosimilar insulin availability expected in 2024, where we can anticipate biosimilars of Sanofi Lantus from Sandoz/Gan & Lee, Lannett/HEC, Amphastar/ANP, and the nonprofit Civica/GeneSys Biologics, in addition to several on the market from both Biocon as well as Lilly, biosimilars of Novo Nordisk Novolog from Sandoz/Gan & Lee, Lannett/HEC, Amphastar/ANP, and the nonprofit Civica/GeneSys Biologics as well as Biocon, and biosimilars of Lilly Humalog from Sandoz/Gan & Lee and the nonprofit Civica/GeneSys Biologics in addition to one already on the market branded as Admelog from Sanofi.

To be sure, the market is evolving rapidly and not every biosimilar insulin is guaranteed to succeed. But it IS possible that a majority of U.S. insulin-users could become biosimilar users rather than branded insulin users since the big three insulin manufacturers in March 2023 announced plans to slash insulin list prices and to opt-out of the PBM commercialization model (at least for patent-expired insulin varieties). Dr. Hirsch talks very briefly about the market dynamics in the U.S. insulin market and acknowledges the impact of biosimilar insulins in the near future, although he said he could not predict what the market would look like at the time of the "Endocrine News" podcast episode.

The podcast episode can be accessed by visiting or listen below.

Tuesday, May 02, 2023

Optum Store Opting Out of Direct-to-Consumer Pharmacy Biz

Last November [2022], I blogged (see my post at for reference) how Cigna's Express Scripts was discontinuing the company's cash-pay mail order pharmacy by InsideRx (the coupon website/app is owned by Express Scripts). Well, now rival United Healthcare's OptumRx is doing the same, effectively shutting down its Optum Store. 

Have a look at this notice:

For the moment, the page can also be read online at but it's unclear how long that page will remain available. I know the image above is impossible to read, but the first paragraph reads:

"We're sad to say that starting June 1st, 2023, you will no longer be able to fill prescriptions through the Optum Store except for on-demand prescriptions, such as Latisse, birth control, erectile dysfunction, and hair loss."

But it looks as if Optum Store is trying to copy what the men's health website is trying to do, which is sell baldness treatments, erectile dysfunction medicines [boner pills] and similar products and getting out of the mail order pharmacy business more generally. One thing I will point out is to note that the footnote claims: "Optum Store is an affiliate of RVO Health, LLC" which means that today, Optum Store is no longer even owned or operated by United Healthcare Group's PBM business known as OptumRx. Exactly WHEN that occurred is unclear, but evidently, the PBM OptumRx felt it was appropriate to sell the online pharmacy and its OptumPerks coupon-generating website/app business to RVO Health LLC. Incidentally, RVO Health LLC also happens to be the entity which owns Healthline, and Healthline acquired the old DiabetesMine (which was formerly a blog which sold itself to Healthline, which then proceeded to shut it down a few years later). RVO Health LLC evidently now runs Optum Store as well as the OptumPerks coupon-generating website and app. In my view, it's not as if the brand "Optum" is a well-known name which has strong brand recognition because it really does not. Unless you're covered by United Healthcare, you may never have heard of OptumRx.

Now, I could also remind you when, back in August 2022, Optum Store tried to pull a bait-and-switch on the diabetes patient community by claiming it was suddenly making insulin prices affordable for anyone via Optum Store (catch my coverage at for more) when in reality, it was doing nothing other than using Sanofi's ValYou coupons and claiming Optum was somehow helping people with diabetes to afford their insulin. In reality, Optum was responsible for the rebate-driven price inflation in the first place by demanding ever-higher rebates and failing to share the benefit of those discounts with patients. Now it appears, United Healthcare has bailed on the whole direct-to-consumer pharmacy operation completely, not unlike what Cigna's Express Scripts by InsideRx did last fall.

For my part, I knowingly chose to bypass my insurance (which, at the time happened to by Aetna, which is owned by CVS Health which owns/operates the giant PBM Caremark) to buy the generic statin drug rosuvastatin calcium (catch my coverage of that HERE), and I did buy it from Optum Store for a year. Doing so saved me 56% over what Caremark intended to charge me. I hear "Yeah, but it doesn't contribute towards satisfying your deductible" at which point, I tell them "That's only partially true because they only credit you for the PBM-negotiated price, not the artificially-inflated cash price you end up paying." The reality is that Aetna/Caremark planned on charging me $33.84 for 90 rosuvastatin calcium tablets, which worked out to a cost of $0.38/tablet, and yet I got it for $15 instead (or $0.17/tablet), which saved me 56% out-of-pocket. Plus, after calling Caremark, I learned that Aetna would only have credited me about $7.75 for that purchase of 90 generic Crestor tablets anyway, hence it made perfect sense for me to simply bypass my own insurance in this case. In fact, thanks to what the PBM's call "spread pricing" (most typically, on generic drugs), USC researchers investigated and found that nearly one quarter of filled pharmacy prescriptions (23%) involved a patient copayment that exceeded the average reimbursement paid by the insurer (and their PBM) by more than $2.00. In other words, it ends up being cheaper for patients to just pay cash and cut their insurance completely out of the transaction about 23% of the time. (see HERE for more). Then, Optum Store inexplicably raised its price on the generic statin drug by 40% to $21 for 90 tablets (or $0.23/tablet). I had only 1 refill remaining, so I paid the higher price. But I searched elsewhere for the next fill, and ultimately, I said goodbye to Optum Store. Instead, I bought the drug from Mark Cuban Cost Plus Drug Company, and even with shipping added to the price, it saved me even more than I enjoyed by buying it from Optum Store initially. Funny how when every Rx price is fake, you can save so much "money"!

On the upside, we now know that big insulin has grown tired of the PBM commercialization channel eating into their profits and driving list prices through the roof, so they are opting out of the PBM commercialization channel for patent-expired insulin analogues completely (see my coverage on that HERE and HERE), and they have decided to slash prices and cut the PBM's out altogether. No entity deserves that more than the PBM's. As for Optum Store's getting out of the direct-to-consumer pharmacy business, its likely copying what rival Cigna Express Scripts did, along with reading the tea leaves with startups like Mark Cuban Cost Plus Drug Company able to beat them at what they were trying to do, so they're opting out instead.

Monday, May 01, 2023

Info On What It Costs To Make Insulin API's Offshore (Courtesy of China's Gan & Lee Pharmaceuticals Ltd.)

When pharma companies refer to API's, they are referring to "Active Pharmaceutical Ingredients" (which is different from what an internet company means when they say API; to internet companies, the acronym API means "Application Programming Interface"). Regardless, pharma API's are commonly made offshore in places like India, Malaysia, China and elsewhere because its cheaper for them and therefore helps their own bottom lines. Its unclear to me exactly how they manage issues including transporting the products across the world for some items which must be temperature-controlled, but if it fattens pharma's bottom lines, they figure it out.

Beijing, China-based Gan & Lee Pharmaceuticals Ltd., which in 2018 signed a cooperation agreement with Sandoz to sell biosimilars of the three bestselling insulin analogues currently sold in the U.S. (specifically for glargine, aspart and lispro) has made news in 2023 largely due to the company's Sandoz agreement. (Incidentally, I believe Sandoz also intends to commercialize made by Gan & Lee of a GLP-1 receptor agonist FDA approved for the treatment of Type 2 diabetes [designated as GZR-1] which is a copy of the old Victoza formerly sold by Novo Nordisk.)

Regardless, on February 23, 2023, Gan & Lee made news when the company disclosed it had become the first-ever China-based insulin manufacturer to formally file a Biologics License Application (BLA) with the U.S. Food and Drug Administration for an insulin biosimilar (specifically for insulin glargine injection rDNA origin U-100) intended to be sold in the U.S. 

Evidently, Gan & Lee's BLA application for insulin glargine injection had been formally submitted to the FDA via the 351(k) pathway which was done sometime in December 2022 and the FDA formally accepted the BLA on February 23, 2023 (see the company press release on the news at for more). Recall that the U.S. FDA formally reclassified insulin as a biologic in March 2020; prior to that, insulin was stuck in a regulatory neverland because historically, it was governed as a "drug" rather than a biologic (insulin was the first-ever FDA approved biologic medicine), but in 2020, FDA formally fixed that regulatory anomaly.

No doubt, Sandoz helped guide Gan & Lee through the laborious application process in an effort to help prepare the company how to handle its BLA's for U-300 glargine, aspart U-100 and lispro U-100. It is necessary to ensure the applications themselves leave no room for matters which could be grounds for clinical trial dismissals, hence seasoned applicants such as Sandoz know pitfalls to avoid. As we know from national academic performance records, many Chinese applicants pride themselves on being outstanding students, hence we can presume Gan & Lee used its own learning from Sandoz to help guide the company's future BLA filings for insulin aspart, insulin lispro and also for patent-expired GLP-1 inhibitors, although Sandoz will be available to its partner to formally review its BLA applications.

Of note is both Gan & Lee's insulin lispro and insulin aspart injection BLA submissions are also now "in their final critical stage of preparation" according to Gan & Lee's financial statements. When submitted, each BLA will reportedly include the application for interchangeability as well.

My followers may also recall that the primary reason that Sandoz chose to partner with Gan & Lee as its offshore partner to make biosimilar insulin API's in the U.S. (Sandoz was more than capable of making the insulins themselves) was, according to Sandoz SEC filings (under the ownership of Novartis), due to its "attractive Cost of Goods Sold [COGS]". However, I really did not have much detail beyond that to know exactly what that entailed. My presumption was that Sandoz initially expected it would be forced to pay rebate kickbacks to PBM's which consumed most of those margins in order to secure formulary placement. Now that the insulin rebate kickback scheme has been abandoned by Lilly, Novo Nordisk and Sanofi, it would appear to put further pressure on biosimilars since they will no longer be significantly less costly to payers (which includes patients). Price is a powerful point of differentiation; once that is no longer so large, how do biosimilars compete then? We know that two biosimilar-makers including Amphastar (which has a Chinese-based operating unit known as ANP and as well as a France-based API manufacturing unit) and Lannett Company (which is partnering with China-based HEC Pharmaceuticals) have noteworthy "white label" (also known as "private label") businesses whereby they sell their products under their retail pharmacy partners' names. Civica, meanwhile, will use a partner named GeneSys Biologics based in Hyderabad, India.

However, I never knew (nor did Sandoz ever disclose) exactly what the Gan & Lee insulin COGS actually were (we just knew it was cheaper than it would be by making the insulins themselves or they wouldn't have partnered with another company). However, Gan & Lee is trying to become more transparent in an effort to expand into the U.S., Canada, Europe and elsewhere in the world. Hence, Gan & Lee has started to formally publish quarterly and annual reporting information which would theoretically suitable for submission to the U.S. Securities and Exchange Commission (SEC) if its commercial partners require it.

I recently read Gan & Lee's 2022 Annual Report (see for the report) and fast forward to page 62 of 375. There, I found some interesting factual details which Sandoz never disclosed about its biosimilar insulin development program. Throughout the Gan & Lee annual report itself, the company repeatedly refers to "volume based" production, which is evidently something Gan & Lee views as a point of differentiation for the company.

In Gan & Lee's annual report, there is some disclosure about actual costs. While there's disclosure of the impact of the Chinese government's national drug preparation (insulin special) which it says was organized by the State in 2021, and the impact of that discounting on the company's revenues. It writes (in the English language translations; the report is both in Chinese and English):

Price before the centralized procurement (RMB/Unit; note that when it says "per unit", I must presume the company means the cost of a 10 mL vial since there are no quantity measurements disclosed, but if it were the cost of an actual unit measurement in a syringe, the cost would be FAR above even what Sanofi, Novo Nordisk and Lilly charge for their branded innovator insulins) and it reveals that the costs (disclosed in Chinese Yuan, referred to as "CNY") so I've used the current conversion rate to U.S. Dollars ("USD") using Forbes' currency conversion tool at

  • Insulin glargine injection 143.97 CNY = $20.83 USD
  • Insulin aspart injection 59.63 CNY = $8.62 USD
  • Insulin lispro injection 60.00 CNY = $8.68 USD

Also note: the company notes that after the Chinese-government mandated insulin discounts, it then gives discounts ranging from 60% to 67% off the price of these three most commonly-prescribed insulin analogues.

Although Gan & Lee has not formally filed BLA's for prandial insulin analogue biosimilars yet, for whatever reason, basal insulin glargine is more than twice as expensive as aspart and lispro are even though we know unequivocally that the actual manufacturing costs are NOT materially more. There, I attribute that to Sanofi's longstanding premium pricing on that which was aimed at the massive Type 2 patient market. But, comparing the cost of prandial insulin analogues aspart to lispro, we find that insulin aspart is clearly slightly less costly while lispro costs marginally more to make and sell (aspart costs $8.62 while lispro costs $8.68, so a $0.06 price difference). That may partially explain why there are so many glargine and aspart biosimilars in development while there are considerably fewer of lispro. Lilly's aggressive price-cuts on its unbranded lispro product (which since last year has sold at a cost of $35/vial with a Lilly Insulin Value Program coupon from Lilly) don't explain prices outside the U.S., but they may explain why we're seeing fewer lispro biosimilars in development. Remember: Humalog's U.S. patents all expired several years ago.

Obviously, the Gan & Lee's insulin prices are quite low compared to what it would otherwise cost Sandoz to manufacture the biosimilar insulins themselves either in the U.S. or in Europe, and volume-based production is something Gan & Lee is very proud to discuss. In fact, in its annual report, Gan & Lee discusses how in China, the government mandates volume-based discounts as all commercial healthcare insurance companies (via their PBM's) do in the U.S. primarily via rebates. In effect, the Chinese government says "Look, we're buying XXX units of insulin; hence we DEMAND you provide us discounts and we will pay no more than YYY for that". Pharma does that everywhere the do business (including in the United States), and that also applies to China. Gan & Lee (and partner Sandoz) still makes a profit; the discounts are a part of doing business. Novo Nordisk sells its products in China, but its exclusive patents have all expired in China (including on GLP-1 inhibitors for Type 2 diabetes), therefore biosimilar-makers such as Gan & Lee are now allowed to copy those products and sell them for less money. The open question remains: just how low will they actually sell for in the U.S.?

Thursday, April 27, 2023

Podcast Episode Recommendations: The Pulse by Wharton Digital Health with Mark Cuban and GoodRx Co-Founder Doug Hirsch

The Wharton School at University of Pennsylvania (you know, the Colonial-era Ivy League school which has a massive endowment due to the fact that the school began when Pennsylvania was still a colony back in 1740) has a health podcast. Those not in-the-know sometimes mistake University of Pennsylvania for Pennsylvania State University, which is the Keystone State's massive public university), so allow me set the record straight on that. The University of Pennsylvania's business school known as The Wharton School which is regularly ranked among the best business schools in the country and it has a price-tag to match, although most students feel the cost is worth it since they end up with excellent job offers when they finish. The Pulse by Wharton Digital Health is the health podcast produced by the business school at University of Pennsylvania and sometimes has interesting interviews.

The Pulse by Wharton Digital Health describes its mission this way: "Our mission is to capture the pulse of healthcare innovation spanning leaders across the healthcare ecosystem." Among the interviewers include Wharton students who are pretty well-informed about the topics (and the guests) they are interviewing.

The guest on the first episode of The Pulse Podcast by Wharton Digital Health I am sharing today is Mark Cuban. The interviewer is Alex Wess, who is a second-year MBA candidate at the Wharton School at UPenn. This conversation was interesting because it occurred after the company was already around for more than a year, plus they can discuss some of the business issues impacting the Mark Cuban Cost Plus Drug Company PBC business in the past year.

One gem of a quote from Mark Cuban was the following:

"The greatest trick PBMs ever pulled was convincing people they were saving money."

Quote from Mark Cuban of Mark Cuban Cost Plus Drug Company on bringing transparency to pharmacy.

The episode itself can be visited at or you can listen to it below.

Beyond this particular episode of The Pulse was another interview conducted on October 4, 2021 with Doug Hirsch, who began a company (actually, he co-founded it) known as GoodRx. This week, GoodRx made news because the co-founders Doug Hirsch and Trevor Bezdek actually stepped down and have transitioned into new roles as Chief Mission Officer and Chairman, respectively. On April 25, 2023, GoodRx Holdings, Inc. announced that Scott Wagner had been appointed Interim Chief Executive Officer, effective April 25, 2023. For more info on that announcement, visit the press release at for more details.

However, the October 4, 2021 interview with Doug Hirsch was another one worth listening to. The interviewer is Timothy ("Tim") Baker, who spent his time before Wharton in healthcare consulting with Oliver Wyman, working with large payer, provider, and pharma organizations undergoing large scale digital transformations. Tim also spent a year working in product management and business development at Practicing Wisely, a claims-based physician decision support asset. Tim is in the Healthcare Management program at Wharton. The podcast episode can be seen at while, again, I have included the podcast episode itself below.

Wednesday, April 26, 2023

Approaching a Half-Century of Life With Type 1 Diabetes (T1D)

On July 24, 2023, I will mark 47 years of having lived with autoimmune Type 1 diabetes (T1D). I was diagnosed as a seven year old, so not quite fifty years ago, but much closer than I ever really anticipated. When I was diagnosed in 1976, no one told me that I should expect horrific complications or that I'd die young because threats weren't part of the conversation; some may have been due to my age. But there was also no such thing as a certified diabetes educator in 1976; instead, pediatric nurses instructed patients on how to give themselves an insulin injection (with the help of an orange or grapefruit which received the trial injection). In fact, scientists had only proven that Type 1 diabetes had a distinct etiology from Type 2 diabetes in 1973; before that, the presumption was that children usually always developed Type 1 and therefore needed insulin. Older patients were more likely to be misdiagnosed. Unfortunately, that remains true in 2023.

The only reason I even have a record of the exact date of my diagnosis is because back in 2007, I'd blogged about my 31st anniversary of diagnosis, catch that post at for more. At the time, my mother was cleaning out her closets and she'd saved my Baby Book, and that contained a calendar from June and July 1976 with everything I had done. Using that calendar, we did some calculations to come up with what was my T1D diagnosis date. My mother had saved those things because I'd spent the summer across the country with my maternal grandmother, uncle, aunt and cousin near Tacoma, Washington and we included the calendar in a scrap book we created as a way to keep me amused while I was an in-patient in the hospital for a week at the time. 

Being an in-patient upon T1D diagnosis is largely unheard of today because commercial healthcare insurance companies now use any excuse possible to avoid paying any claims, but back in 1976 when I was diagnosed, we did NOT have home blood glucose testing (that emerged around 1979 to 1980 or so), hence the ONLY way for a patient to realistically develop insulin dosage/correction ratios was to do so from the hospital, where the hospital could take blood samples, send them to an in-house lab, and test the blood glucose levels in order to help doctors (and patients) realistically set those things. 

That meant patients in 1976 had no possible way to do self-testing of blood glucose for themselves. Fingerstick self-testing, much less CGM's, were little more than someone's fantasy at the time.

My recollections weren't really about diabetes per se, but my first ride on an airplane (to a 7 year-old, the memories were vivid because flying was really expensive in those days). In 1976, I also remember the airlines permitted smoking during the flight, hence certain rows of seats on the plane had their own ashtrays in the armrests. My seven-year old self loaded those nasty ashtrays up with used chewing gum! However, by then, the airlines had designated "smoking sections" which had more ventilation (and curtains to separate the seat classes), which meant only certain seats permitted smoking and the personal ashtrays in other seats were sealed shut. I also had vivid recollections of what an incredible struggle it was to hold-off having to visit the restroom when the captain turned on the "fasten seat belts" sign, so I learned to hold it out of absolute necessity. I also learned to minimize my beverage consumption so I could minimize my restroom trips even though I was incredibly thirsty. It was a different time, but some things were exactly the same as they are for patients in 2023. 

While some of my peers have already crossed-over into the half-century mark of living with T1D (for example, I'm thinking of my friend Riva Greenberg, who eloquently chronicled her own milestone of a half-century of living with T1D in her blog back in 2022, see for her post), and yet for me at age 54, I have 47 years with T1D behind me, yet I still have another 11 years until I'll become eligible for Medicare.

But, I have tried to "pay it forward" to some degree.

For example, in 2016, I worked tirelessly to ensure that seniors with T1D covered by Medicare could get their CGM's covered and I'm proud to say we succeeded in gaining CMS/Medicare coverage (catch my post at for my coverage). Truthfully, I wasn't being completely altruistic or selfless. I anticipated that sometime in my own not-too-distant future, I'd become eligible for Medicare myself, and at the time, I also wanted to make damn certain that CMS would cover the CGM devices when I get there. 

I am friendly with several people older than me who experienced a fair amount of trauma and difficulty when they aged into Medicare and suddenly, coverage of CGMs was no longer available to them (including several people with hypoglycemia unawareness), so I acted a bit selfishly when I saw an opportunity to help persuade the FDA to re-classify CGMs as something other than "adjunctive," but rather as "therapeutic" which was a first step towards realistically securing CMS coverage. There was some risk that doing so could persuade commercial healthcare insurance companies from paying for test strips, but nevertheless, I jumped at making Medicare coverage a reality because I understood just how important it actually was.

I concur with my friend Riva Greenberg's assessment that we are entering a period where increasing numbers of us will enjoy the "luxury" of being people with T1D aging into Medicare coverage in comparatively good health (something previous generations of patients with T1D did not always experience). Unlike Riva, I haven't yet applied for a Joslin 50-year medal (I still have 3 years to decide if I necessarily even want such an award; its still not exactly a milestone I'm looking forward to eagerly). I look forward to eligibility for Medicare, but I still have more than a decade before that happens.


Still, if there's one key element I am more convinced now than at any point in my life (so far) that's helped patients with longstanding T1D, it is resilience, NOT glycemic management as medical doctors will assert.

Why do I say resilience was the key to success? Consider what I've endured over my own lifetime with T1D.

When I was diagnosed, we had no way to even measure our own blood glucose for my entire childhood with T1D (I was a teenager in middle-school when fingerstick testing emerged). At the time, we had Clinitest urine testing, but the reality was, that was never very accurate, and could have been hours after-the-fact, hence it could not really guide our dosage decisions. In many ways, we were flying blind in those days. It wasn't until the early 1980's that we had access to blood glucose testing, and that was really revolutionary. Even then, the insulin was so incredibly slow-acting that it was next to impossible to make the types of adjustments as patients do today. Also, doctors at the time merely suspected without proof that glycemic control made any difference; the DCCT was published in 1992 or 1993.

Instead, my memories were that patients with T1D were forced to live rather regimented lives; we really had to eat meals exactly on a schedule so our meals would occur about when the 8-hour peak of highly-purified Regular insulin happened (which, incidentally, was pork insulin in those days, which is actually significantly closer to human insulin in genetic structure than such analogues as Novolog/aspart/Fiasp are in 2023). Luckily, as a school child, that was pretty easy since we had lunch at a set time each day. We also had to rely on feelings of lows (feeling shaky, for example) to know if we needed to treat hypoglycemia with orange juice (no glucose tablets in those days), for example. I had many problems with overnight hypoglycemia as a child, due to the insulins prescribed at the time. I went back to the hospital and was given an alternative to isophane/NPH called Lente which worked significantly better for me. We did have old-school mix-and-inject glucagon rescue kits (today, there are several generic versions of those older products (I covered those HERE), but most patients prefer more convenient options like Gvoke or Zegalogue glucagon rescue pens, or BAQSIMI, which is an inhalable version.

However, resilience is also what realistically enabled most patients like me to successfully navigate life with predatory third-party drug distribution system middlemen called Pharmacy Benefit Managers (PBMs) whose corrupt rebate-aggregation transformed a century-old medicine known as insulin into one of the most overpriced drugs in existence according to a 2020 Senate report (see for the report).

Being realistic, not every patient survived that, but a 2022 nonprofit company's promise to make less costly biosimilars, including the three bestselling insulin analogues currently sold in the U.S., combined with a number of other biosimilars due to hit the market in 2024, all led to the March 2023 announcements (catch my coverage at for more) that the three biggest branded insulin-makers announced they intend to slash insulin list prices and basically opt out of the PBM commercialization model since it had already been eating into manufacturer profits anyway. 

In 2022, Lilly told investors that one-third of its U.S. Humalog sales was its cheaper, unbranded version, hence Lilly concluded that it could realistically survive without the PBM's after all. Rival Novo Nordisk has also admitted to its company shareholders that the company's U.S. insulin margins had plunged into the negative territory starting in 2017 due to PBM rebating, so they were also eager to opt out of the PBM commercialization model as well. Realistically, that meant Sanofi had no other alternative but to follow-suit, but remember: back in 2020, Sanofi basically cried to the Wall Street Journal about the rebate-driven system which had made the insulin it sold in the U.S. only marginally profitable anyway (see for more). In other words, all three insulin makers really just needed a push to opt out of the PBM commercialization model for insulin. The advent of cheaper biosimilars provided them a convenient excuse they needed.

Which brings me to patient resilience. The reality is that patient resilience is really the key to successful survival with any chronic disease, and especially Type 1 diabetes. Not being resilient could potentially be fatal. In that way, it's not glycemic management (per se) which differentiates the cadre of Joslin Medalists, but instead its been patients' ability to "roll with the punches" and be flexible enough to successfully navigate the never-ending changes required of patients. 

Having decent glycemic management can help, but realize that provides no guarantee, unfortunately. But having flexibility and adaptability is essential if you expect to live long-term with a disease like Type 1 diabetes. You need to be endlessly adaptable to whatever changes either with the illness itself, or perhaps equally important, what living in a predatory healthcare "system" (as the U.S. healthcare delivery system operates). That, in my honest opinion, is equally as critical as your HbA1c, even though no endocrinologist will admit that.

As I approach my half-century milestone, I found two resources on transitioning into Medicare (I have 11 more years to go), and the best among them was from JDRF at (a less helpful document can be read at, although I found the JDRF article contained more relevant information than the old DiabetesMine article, which encouraged patients to consider a Medicare Advantage plan, and my friends already on Medicare tell me that's actually a terrible recommendation, rather they all recommend a supplemental Medigap policy).

Author P.S., May 9, 2023: A while ago, Kerri Sparling solicited a number of diabetes old-timers like me on Facebook for their input on an article she was writing for diaTribe News. I was unsure when her article would be published. Today, her article was published and I was quoted in it. To read it, visit to see it.

Sunday, April 23, 2023

South Korea-Based Undbio Co., Ltd. + Proprietary Insulin; Maybe Biosimilars (someday)

On April 13, 2023, a South Korean biopharmaceutical company known as Undbio Co., Ltd. signed a lease with West Virginia University to build what it refers to as an insulin "manufacturing facility" in the city of Morgantown, WV (see for more information). In all likelihood, that will be for what pharma refers to as a "fill & finish" facility, rather than one where temperature-controlled bioreactors are located.

Meanwhile, a nonprofit drug company known as Civica, Inc. is set to sell biosimilars of insulin glargine, aspart and lispro as soon as 2024 which it says will be "manufactured" in neighboring Virginia in the town of Petersburg (located just outside the state capitol of Richmond). However, we know with certainty from the company's own press release (see for more) that facility will actually be a "fill & finish" facility whereby already-cultured biopharmaceuticals made offshore by GeneSys Biologics in Hyderabad, India will be packaged into vials and pens and then distributed across the U.S.

The Morgantown, WV facility acquired by Undbio was previously owned and operated by Mylan, which completed a merger in November 2020 with Pfizer Inc.'s Upjohn unit to form a new company known as Viatris. Viatris previously commercialized insulin biosimilars which were manufactured offshore by Biocon at a massive biotech facility in Johor, Malaysia including two biosimilars of Sanofi Lantus known as Semglee and an unbranded version called simply insulin glargine injection; the company now has a biosimilar of Novo Nordisk's Novolog/aspart in development. Semglee is made and packaged in Malaysia ready to go to drug wholesalers from the arrival at the Port of Los Angeles.

In 2022, Biocon Biologics Ltd. acquired Viatris' half of their joint venture. Former Mylan CEO Heather Bresch, who is also the daughter of West Virginia U.S. Senator Joe Manchin (D-WV), retired as CEO at the closing of the Morgantown, WV Mylan facility, hence she avoided uncomfortable confrontations about her role in making that happen. Heather Bresch was the CEO of Mylan from 2009 to 2020 (announcing her "retirement" in 2019 at the age of 50) after Mylan (under Bresch's leadership) formally announced that the company was merging with Pfizer Inc.'s Upjohn business unit and subsequently became known as Viatris. During that period, Bresch was called to testify before Congress about EpiPen price increases, and she gave unpersuasive testimony using a well-rehearsed pharma line that she and Mylan had no control over drug prices once they are sold to drug distributors. Unfortunately, Mylan immediately defied that myth when it then sold a less costly "authorized generic" version of EpiPen as an unbranded product, which proved Ms. Bresch's testimony was a falsehood, but she got a golden parachute, so she did not care.

The Morgantown, WV Mylan facility was unceremoniously closed in the name of much-needed cost-cutting since Viatris had billions in debt from Pfizer that needed to be repaid. Before the spin-off of Upjohn, Pfizer loaded Upjohn up with many of its own debts in what was little more than an accounting gimmick for Pfizer which effectively saddled the startup known as Viatris with Pfizer's debts not of Viatris' own creation. The local West Virginia news reported that the Mylan/Viatris Morgantown closure had eliminated an estimated 1,400 workers in West Virginia at the time, 850 [in 2020] of whom were members of the United Steelworkers Union.

The new Undbio 1.1 million square foot facility in Morgantown, WV will employ fewer people than the number who previously worked there; with estimates of maybe around 200 jobs (at least initially; the company has said it could create more jobs once FDA approval is secured for its first U.S. product, its once-weekly dosed basal insulin) compared to 1,400 who once worked there. The State of West Virginia never revealed exactly how much in tax incentives it paid for Undbio to occupy the facility. There are hopes that the number of employees could increase to as many as 1,000 when the facility is fully-running, although robotic automation in pharma have reduced the number of employees formerly required in the name of not only greater efficiency, but also unprecedented sanitation. Robots don't generally carry germs as humans can, and can be sanitized in-between jobs.

In 2022, West Virginia University agreed in a memorandum of understanding with Mylan to pursue other options for the Morgantown manufacturing facility on the terms that the property would be used to provide employment to the Morgantown area under WVU's ownership. That facility was then transferred to the WVU Innovation Corporation for a cost of $1. Jobs remain a hot-button issue in West Virginia, as the state has few business startups of its own, and the state has struggled to attract similar types of investments which its neighbors in Virginia, Maryland, Pennsylvania and Ohio have, due in part to the state's lack of accessibility due to its mountainous terrain, transportation consisting largely of roads, and comparatively lower levels of educational attainment relative to its neighbors. As a college town, Morgantown remains a bit of an exception to an otherwise lackluster economic landscape in one of the nation's poorer states.

On April 12, 2023, the South Korean company known as Undbio Company, Ltd. announced plans to build what it called an insulin "manufacturing" facility in the old Mylan/Viatris facility in Morgantown, WV. According to Undbio's website, the company announced that it intends to build a facility to develop insulin and insulin analogues, with an expected completion date of December 2024. Local TV stations say construction was expected to begin in September or October of 2023. Based on the very short construction timeline (a little over 1 year), it would appear to be more of a facility remodeling/retooling rather than completely new construction. Undbio has another 25,000 square-foot R&D and U.S. headquarters presence in neighboring Rockville, Maryland (in addition to its 1.1 million square foot building in Morgantown, West Virginia).

However, it is something of a perilous time financially for biosimilar insulin manufacturers.

The PBM commercialization channel for insulin now appears to be dead; which means artificially-inflated margins can no longer claimed by PBMs since all three of the big insulin makers have opted out of the PBM commercialization channel; that's not inherently bad for biosimilars, although biosimilars tend not to be heavily-rebated as branded insulins are anyway. However, making insulin active pharmaceutical ingredients (APIs) offshore enables rebating to PBMs if necessary. But in March 2023, the three biggest branded insulin makers doing business in the U.S. (Eli Lilly & Co., Novo Nordisk and Sanofi) each announced significant list price reductions which were previously feuled primarily by PBM rebating, and they would instead bypass the PBMs on insulin, passing the savings onto patients instead. PBMs will have to collect rebates on a different therapeutic class of drugs.

A number of insulin biosimilars are already now pending FDA approval; but all of those are cultured in bioreactors offshore, principally in Malaysia, India and China. They may be packaged domestically at U.S.-based "fill & finish" facilties (packaging the insulin into vials and pens, and labeled for distribution) for insulin cultured in Chinese labs, but selected facilities in India and Malaysia (including Biocon's) may also handle "fill & finish" since those facilities offer FDA inspectors open access. But Undbio appears to have aspirations to sell proprietary insulin molecules, at least initially.

The Pittsburgh Business Times reported (see for more) that Undbio expects to seek initial U.S. Food and Drug Administration approval for a single-shot, once-weekly insulin that it would "manufacture" in Morgantown, WV. In other words, Undbio will focus initially on developing a proprietary basal insulin for sale in the U.S. Its less certain if Undbio intends to sell biosimilar insulins as well (it has said it might); but I suspect much will likely depend on how that market unfolds in the coming years. Undbio's CEO is a man named Jun Yong-soo.

Undbio has already done extensive research on its weekly basal insulin, including testing, and manufacturing of their insulin product in South Korea and already has FDA approval to sell the product in the U.S., but only for the active pharmaceutical ingredient (API) of the product itself, but the company lacks FDA approval for its fill & finish U.S. manufacturing process which will be done in Morgantown, WV.

Basal insulin analogues tend to be used more by Type 2 diabetes insulin users. While Type 1 patients may use basal analogues, they tend to use significantly less insulin volume because their disease is due to an absolute insulin deficiency rather than insulin resistance, which is what differentiates Type 2 diabetes. Undbio won't be alone: rival Novo Nordisk already has a weekly basal insulin called Icodec in development, and the company told investors it expected to file for regulatory approval of once-weekly insulin Icodec in the U.S., the E.U. and China in the first half of 2023 (see for more info).
In March 2023, Novo Nordisk as well as rivals Lilly and Sanofi all announced plans to opt out of the PBM commercialization model for insulin, instead slashing their list prices for insulin instead of raising them and rebating them all back to PBM's on the back-end. Unfortunately, rebates aggregated by PBM's are commonly not passed on to patients, which caused the U.S. insulin affordability crisis in the first place.

Biosimilar insulins tend to be commoditized, whereby the lowest prices win. That said, several biosimilar insulin makers including both California-based Amphastar Pharmaceuticals and Pennsylvania based Lannett Company (also made by offshore business units or partners) will also sell biosimilar products under their pharmacy retail partners' names as "white label" or "private label" products. Those are not for giants like CVS or Walgreens but for smaller, regional chains (according to SEC filings, each company has only biosimilars of insulin glargine and aspart in development; but neither have biosimilars for insulin lispro).

However, both Amphastar and Lannett rely on offshore manufacturing in China or France for the insulin APIs. Having a proprietary insulin similar to whatever Novo Nordisk brands Icodec as could help Undbio establish itself in the U.S. with a differentiated product around the same time Novo Nordisk expects to sell its newest "Lantus killer" (the company keeps trying but has never succeeded commercially) including its branded Tresiba and different NDC's sold as unbranded versions (both U-100 and U-200) called insulin degludec injection, although Novo Nordisk degludec has really struggled to gain a foothold against glargine because prices on glargine have fallen off a cliff.

That will be the U.S. insulin market biosimilar insulins expect to enter.

Of course, the number of biosimilars for each insulin analogue whose patents have expired will impact the odds for success. There will be no fewer than seven iterations of Sanofi's Lantus on the market, including several already being commercialized from Lilly and Biocon. For whatever reason, aspart is expected to see five biosimilars (perhaps some with different NDCs as both branded and unbranded versions), at which point innovator Novo Nordisk is likely to stop making Novolog and "retire" it as it has already done with countless insulin varieties no longer made (including the entire biosynthetic lente series consisting of semilente, ultralente which are mixed together to make lente). Since 2019, it has sold a patent-protected "new and improved" version of aspart which expedites absorption into the bloodstream with the addition of vitamin B6. Lilly Lispro (sold under the brand name Humalog), which already has one biosimilar on the market from Sanofi which is branded as Admelog, faces the fewest biosimilars, with two additional copies from Sandoz/Gan & Lee and Civica/GeneSys Biologics. Lilly has sold a cheaper unbranded version of that product for $35/vial since January 2022.

While making the APIs offshore is expected to assist biosimilar-makers, commercialization remains an untested battleground. With the floor on U.S. insulin prices falling, execution will be key to success. There, Lannett and Amphstar which already sell drugs under pharmacy partners' brand names could have a slight advantage. But Sandoz is no stranger to the U.S., and could prove very aggressive with its Chinese-made (by Gan & Lee) versions of Lantus, Novolog and Humalog. Civica, meanwhile, has already stated that the company does not define success based on unit sales, but on broader "societal impact" (which it can do as a nonprofit, cost-plus entity).

In the end, 2024 is poised to be an interesting year for the U.S. insulin market. The PBMs' shell-game with rebate aggregation is ending with big 3 insulin-makers all opting out of the PBM commercialization channel, which means both biosimilar execution and prices will be key points of differentiation for the newcomers in the space. As for South Korea-based Undbio Co., Ltd., that company will be pursuing a proprietary insulin molecule before it goes down the rabbit-hole of biosimilars. Whether it does anymore than that remain to be seen.

Wednesday, April 12, 2023

"The Second Request" Podcast Episode Recommendation: Spotting Anticompetitive Conduct in Pharma Supply Chain, with 46brooklyn

The Capitol Forum is what I suppose can be called a Washington, DC-based, center-left leaning investigative news organization. In 2017, the website "Talking Biz News" (which is apparently about the news business) operated by Chris Roush, who's dean of the School of Communications at Quinnipiac University (a university which happens to be a few miles away from where I grew up, so it seemed legitimate to me) described The Capitol Forum this way: "Digging deep into the connection between business and government regulation."

Anyway, The Capitol Forum recently shared an excerpt from its "The Second Request" podcast. For its part, The Capitol Forum does not really get a lot of media headlines because most of its articles remain sealed tightly behind a paywall. However, I discovered its podcasts are assuredly more accessible, pretty much from wherever you get your podcasts. 

The "The Second Request" podcast description describes itself this way:

"Exploring Solutions to Monopoly Problems Following forty years of laissez-faire antitrust enforcement and industry consolidation, the White House is considering a fundamental rethink of how to interpret, enforce, and rewrite antitrust law, and many questions remain unanswered for the antitrust community."

That description really intrigued me, so I subscribed! 

Virtual and mostly unregulated monopolies now operate widely across the U.S. economy, which has contributed to inflation. One example: at the start of 2022, a dozen large eggs cost the average American shopper $1.93, but at the start of 2023, that carton cost an average of $4.82 – a 250% increase. The suppliers blamed the price increases on outbreaks of highly pathogenic avian influenza. Yet at the same time, Cal-Maine Foods, which happens to be the largest egg producer in the U.S., reported that company revenue doubled and its profit surged 718% last quarter because of sharply higher egg prices. Coincidence? Unlikely.

More recently, the "The Second Request" podcast has covered a variety of topics related to the healthcare industry, hence I have found recent episodes worth listening to. One recent conversation was with Antonio Ciaccia and Ben Link of 46brooklyn Research on "The Second Request" podcast.

As 46brooklyn dug into the pharmaceutical supply chain on behalf of the State of Ohio, it began uncovering hundreds of millions of dollars in state overspending on prescription drugs through its Ohio Medicaid program. 46brooklyn's founders had begun doing data analytics and research to help uncover massive disconnects between pharmacy reimbursements, the actual costs of prescription drugs, and what the state of Ohio was getting charged through its state Medicaid program.

In this podcast episode, In particular, they discuss the odd dynamic whereby generic drug prices no longer really save patients money anymore. But that is ominous for what it means to newer markets such as the biosimilar insulin market which expects a bunch of approvals starting in 2024. That partially explains why innovative startups such as Mark Cuban Cost Plus Drug Company have been able to disrupt what was previously an odd collaboration where no one discussed what prices really were.

Listen to the full discussion in its podcast below, also available on The Capitol Forum's website at and major podcast-streaming platforms.