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.

Monday, July 25, 2022

Turning PBM "Arbitrage" On Its Head: Bypassing Insurance to Save

The word of the day is "arbitrage". 

Officially, Merriam-Webster defines the English language word "arbitrage" this way: "The nearly simultaneous purchase and sale of securities or foreign exchange in different markets in order to profit from price discrepancies". However, arbitrage does not exclusively apply to securities sold on Wall Street. The term has also been appropriated by the Pharmacy Benefit Manager ("PBM") industry. 

But PBM's are not Wall Street investment banks. And that's something we all need to realize.

The PBM Accountability Project 2021 report "Understanding the Evolving Business Models and Revenue of Pharmacy Benefit Managers" (download their highly informative report by visiting HERE) defined the term "arbitrage" this way:

"PBMs' lack of transparency is critical to their operations and allows them to buy a product (or service) [such as a drug or biologic medicine] from one stakeholder in the system and re-sell that product (or service) to another stakeholder at a significantly higher price, all without the payer understanding the true cost or inflationary nature of the services they have just purchased — a practice [euphemistically] referred to [by the PBM industry] as 'arbitrage'".

Adam Fein, President of Pembroke Consulting and another entity he calls The Drug Channels Institute described the situation this way when he observed how a surprising majority (74%) of GoodRx customers actually have a drug benefit provided by insurance. He wrote (see his post at https://www.drugchannels.net/2021/03/how-goodrxs-rapid-growth-creates.html for details):

"Incredibly, three out of four consumers who used GoodRx already had commercial, Medicare, or Medicaid insurance. This means that someone — the consumer, their employer, and/or the government — paid insurance premiums for a pharmacy benefit managed by a PBM. Yet it was still worthwhile for people to bypass their plan's out-of-pocket costs and PBM network rates in favor of a different PBM's rates ... such arbitrage creates potent conflicts between PBM's and their plan sponsor clients".

Adam Fein also included this image which comes directly from GoodRx:

GoodRx 2020 Payer Mix



 

 

 

 

 

 







In a separate post about GoodRx and its disruptive impact on the pharmacy business (see HERE), Adam Fein further observed:

"Discount cards succeed by enabling people to arbitrage network pharmacy rates across PBM's."

He adds:

"...benefit designs and network rates can differ among PBM's. This difference can allow a patient to reduce their out-of-pocket expenses by accessing the rates of another PBM — or maybe even another network from their own plan's PBM — by using a discount card."

PBM Arbitrage Is A Clever Term to Describe Ripping-Off Both Pharma and Patients

According to a 2018 White Paper (see https://healthpolicy.usc.edu/wp-content/uploads/2018/03/2018.03_Overpaying-for-Prescription-Drugs_White-Paper_v.1.pdf for the paper) published in March 2018 by the University of Southern California's Schaeffer Center for Health Policy and Economics, about one-quarter of the time patients visit the pharmacy counter, prescription drugs end up costing them MORE money when paying with insurance than just paying with cash. Bypassing your own insurance company's pharmacy benefit to save a LOT of money on prescriptions defies what we've been taught, and yet a growing body of data suggests it is happening more and more.

Of course, paying "cash" is further complicated by PBM arbitrage.

Paying cash often includes using various readily-available discount coupons (including PBM-powered coupons such as those from GoodRx, or any number of rivals such as SingleCare which I'll tell you about, as well as manufacturer coupons from the pharmaceutical companies) to reduce YOUR prices which may or may not always work with your insurance or Medicare, but the point is you could be paying too much by using your insurance (including Medicare), and that happens at least 25% of the time.

But It Counts Towards My Deductible ... Right?

The single biggest myth is that patients should simply tolerate paying artificially-inflated list prices for prescription drugs because they mistakenly believe doing so contributes meaningfully towards reducing the deductible they must satisfy.

That's a falsehood which you need to forget about.

In reality, insurers only credit covered patients for the deeply-discounted prices their PBM's negotiate on their behalf, not the bloated cash list prices patients are charged at the pharmacy for prescription drugs. One trouble is that covered patients really have no idea of how much credit each drug purchase is being applied towards their deductibles. Your health insurance company is keeping that information secret from you. That lack of disclosure is key.

That makes shopping for prescription drugs in the U.S. an unnecessarily complicated decision-making process. The real issue is that patients never really know what the price will be until we get to the pharmacy checkout counter (although you can ask a pharmacy tech before-hand, but its time-consuming).

The PBM Accountability Project report again described the situation this way:

"Excess complexity in the U.S. prescription drug distribution system and information asymmetry in the market currently prevents patients and payers from properly evaluating PBM decisions which directly impact them."

There are, of course, various other factors to consider.

For example, if you have deductibles to satisfy before pharmacy benefits go into effect, then you may directly experience this corrupt form of "arbitrage" annually (usually on January 1, although some plans reset their deductibles on their plan anniversary date) when deductibles are reset to zero.

I find it helpful to try a simple sanity-check if the price you're being asked to pay just "seems" like it makes sense to bypass your insurance. I experienced this bizarre arbitrage on prescription drug pricing dynamic earlier this year.

My spouse uses a generic hypertension drug (the name of the drug was eplerenone 50 mg tablets). Using our insurance to buy the drug, insurance and its PBM Caremark had charged $48.40 for a 30-day supply of a generic drug which is very literally "Made in India".

That was not OK.

I understand that many drug companies now make drugs offshore because it earns them even more (according to researchers, 40-50% of the nation's generic prescription drug supply comes from India these days because it enriches the pharmaceutical industry), but that was still an unreasonable cost of $1.61 per tablet! In my gut, I just KNEW we were being ripped off. In other cases, it may not be so certain. In which case, I would suggest you use your best judgement. It may be worth several hours of your time to shop around.

Sanity Check: Generic Drugs Made Offshore Should NOT Cost Us More Than $1/Tablet

Since we still had several refills before the next doctor's appointment, in our case, I first searched for coupons to at least reduce our out-of-pocket price. Oddly, many generic drugs now have coupons; we were taught generics are a way to save money, but now they are a way for PBM's to mark up prices without anyone knowing.

Weird Glucagon Example

Consider this: one of several generic glucagon emergency kits which are now FDA-approved can be purchased, including one for a mere $5 with a co-pay coupon from the generic drug manufacturer Fresnius Kabi USA whose U.S. base is located in suburban Chicago. The parent company is based around Frankfurt, Germany.

But the odd PBM "arbitrage" has influenced patient prices in a very negative way.

The bogus list price for a Fresnius Kabi Glucagon Emergency Kit https://glucagonemergencykit.com/ without the manufacturer co-pay coupon is a stunningly uncomfortable $260.47 at CVS or $245.03 at Walgreens according to GoodRx. 

This is the second generic glucagon emergency kit approved by the FDA in 2020 (the first was from California-based Amphastar Pharmaceuticals), yet the price on those generics is MORE expensive than old-school glucagon kits from Lilly or Novo Nordisk sell for which defies logic. Get a coupon for the Fresnius Kabi USA Glucagon Emergency Kit at https://glucagonemergencykit.com/index.php/information-for-caregivers/assistance-program/ — just pay very close attention to the mice-type on the coupon disclosure, because the coupon only works for commercial healthcare insurance claims, or alternatively cash-payers subject to monthly cap of $125 and separate annual maximum cap of $1,500. The impact is that it will only mark the price paid down by $125 for any one purchase, which makes it critical to buy it at the pharmacy that sells it for the lowest price.

Just Not for Medicare? But Only if You Tell Pharma or PBM's.

Medicare patients are technically exempt from using many of the manufacturer and PBM discount coupons, and patients will be asked to reveal to the drug company (or the PBM) that they are "NOT enrolled in a governmental program". 

But no law requires patients to tell the drug company or PBM how they will actually be paying for a drug; it's none of their business and they are not entitled to know that. Coupons and Medicare don't mix. But patients can simply answer that they're not enrolled in government healthcare program to pay for the drug, because no federal law (and I'm not aware of any state laws) that entitles a PBM to ask for that information.

None. 


The drug companies and PBM's ask you for the information anyway and try and suggest they are entitled to that info, but they really are not. No law requires patients to answer the "eligibility" questions truthfully. They cannot prosecute patients for fraud because they are paying cash instead of submitting it as a Medicare Part D claim. Patients should be suspicious about telling a third-party how they'll be paying;  after all, as long as they are being paid (and they ARE being paid), why should they care? Patients simply cannot use their Medicare card to pay for the drug at their pharmacy and also use the discount coupons, and that's fine.

With a SingleCare coupon, the price for a Fresnius Kabi USA generic glucagon kit was just $56.66 from a Rite Aid pharmacy. SingleCare coupons discounts are from the RETAILER, not a PBM or manufacturer, which means you may also be able to use a manufacturer coupon on the same purchase. If you don't have a Rite Aid pharmacy near you, its also possible (and maybe preferable given the price difference) to use the virtual online pharmacy known as Capsule pharmacy and buy it for a price for $48.42 which is even cheaper, and then use a Fresnius Kabi USA KabiCare coupon to buy it for just $5 out-of-pocket. With prices like that, there's no reason to use insurance or Medicare to pay for it. Using that method, patients would also likely not encounter the manufacturer coupon cash limit at all. They'd pay just $5 for it.

That's quite literally turning PBM "arbitrage" on its head. 

And, no, it's not illegal.

I've heard stories that patients sometimes find it easier to pay cash and use coupons at one pharmacy (say Walgreens or Rite Aid), and then fill regular scripts with Medicare at a completely different pharmacy like CVS. That makes it easier on the pharmacy staff who won't mistakenly try to submit a purchase as a Medicare claim. Its just sad when generic drugs push patients into the Medicare drug "donut hole", yet our elected lawmakers in Congress have enabled this bizarre type of unethical PBM arbitrage to happen. Perhaps the U.S. FTC will finally crack down when its formal investigation into PBM wrongdoing is completed. I certainly hope so.

Back to Our Rx Markdowns

Anyway, for my spouse's generic hypertension drug, I did find a discount coupon to reduce the price on a site called InsideRx (which also has an app). I later learned InsideRx is owned/operated by the giant PBM owned by Cigna known as Express Scripts. That also explains why the prices are lowest using Express Scripts Cash-Pay Mail Order Pharmacy by InsideRx compared to other pharmacies in its own network. Using that coupon with our insurance slashed $10 off the price Caremark intended to charge us, which reduced our price down to $38.40 for a 30-day supply. The realized cost was still a stunning high $1.28/tablet, which was very expensive for a generic drug imported from India, although it brought a bit of temporary relief of 14% off the marked-up price Caremark said we should pay. And, I used their biggest rival to do it. However, I realized that still wasn't great for a generic drug made in India. The cost of generic drugs should usually be considerably less than $1 per tablet (like $0.50 to $0.70 per tablet).


Low and behold, I then discovered Caremark's PBM rival Cigna's Express Scripts offered an even lower price using its cash-pay mail order pharmacy and an InsideRx coupon. But I had to bypass our insurance to do it. So I did just that. I later learned that Aetna would only credit us for $7.50 for the drug, so the decision to simply bypass our insurance made financial sense. Express Scripts Cash-Pay Mail Order Pharmacy by InsideRx does have some peculiarities. For example, it only accepts e-scripts, so on the next appointment with the doctor, we asked them to send an e-script for the same drug to Express Scripts. That move not only got us a 90-day supply of the drug for a lot less money (it saved us a stunning 82% off the $48.40 our own PBM Caremark intended to charge us for the same medicine). Our price ended up being $25.39 for 90 tablets (that's 3x as much medicine), and that price didn't even require insurance. Its just sad that our own insurance was screwing us financially that way and they get away with it all the time.

HOW I Searched to Save 82% on Rx Drugs

Searching for lower prescription drug prices requires an investment of your time. The most significant cost savings on Rx drugs is often for those used on a chronic basis (not that it doesn't work for drugs taken to treat acute illnesses, its just that the savings will be for short-term meds prescribed for acute conditions may not be worth the extra effort unless the price is very high because you will fill it once, and then be done with the treatment). Nine of the sites are PBM-powered coupons which is essentially saving money with the parties responsible for runaway prices in the first place. One of the sites is one whereby the site works out discounts with the pharmacies directly.

To find the best prices, you really need to search ALL of the following websites/apps.

Also, be prepared to patronize different pharmacies for different drugs. Try to view them as transaction-oriented purchases which you can switch when it personally benefits you. The cost-savings can make a small amount of effort well worth the effort (sometimes using different mail-order pharmacies which is easier than going to multiple pharmacies all around town). I invested a Sunday afternoon price-shopping for prescription drugs. Finally, beware: these rules usually only apply for prescriptions which have lost their patent protection. For newer drugs still protected by patents, the best option for discounts may be coupons from the drug manufacturers. Just beware of the unique eligibility requirements for certain manufacturer discount coupons. For example, some manufacturer coupons may require a claim to be submitted to a commercial healthcare insurance plan in order to work (in which case, the coupons may not work with Medicare claims, and sometimes [but not always] coupons may not work for cash-payers). 

Key is to read the fine-print on the coupon carefully (get your magnifying glasses out).

WHERE I Found Savings of 82% on Rx Drugs

Here is my comprehensive list; search ALL of the sites carefully and let price drive your purchase decisions.

GoodRx https://www.goodrx.com/ The proverbial elephant in the room of prescription drug price comparison and coupon-generating websites/apps is GoodRx Holdings, Inc. which describes itself as a "health technology company" based in Santa Monica, California. The company was described as a "unicorn" when it went public in September 2020. At the time of its IPO, GoodRx's adjusted net income — earnings before interest, taxes, depreciation, and amortization (EBITDA) was an impressive 40%. It also had $388M in 2019 revenue and $139M in operating profit at the time of its IPO. GoodRx has non-exclusive contracts with several different PBM's, including MedImpact, Cigna's Express Scripts, United Healthcare's OptumRx, and Navitus (which is a PBM owned by the nonprofit hospital chain SSM Health & warehouse wholesaler Costco). In April 2021, GoodRx also acquired a rival coupon website/app known as RxSaver https://www.rxsaver.com/ by RetailMeNot from Vericast which previously ran RetailMeNot. However, the reason any one coupon-generating website/app including GoodRx cannot always offer the lowest prices is because each only offers access to a single prescription drug formulary offered by each PBM, and most PBM's offer multiple drug formularies. For example, the PBM known as Express Scripts' biggest formulary (which reportedly covers more than 28 million lives) is a high-price/high-rebate formulary known as the National Preferred Formulary (NPF). But rival InsideRx accesses a different drug formulary called the Express Scripts National Preferred Flex Formulary with lower prices on many generic drugs. To find lower prices, you are basically FORCED to shop other websites/apps.

SingleCare https://www.singlecare.com/ Of all of the Rx price comparison/coupon-generating websites/apps, Boston-based SingleCare is currently unique among coupon-generating websites/apps in that it contracts directly with major pharmacy chains to negotiate discounted cash prices rather than using a PBM or combo of PBM's. Avoidance of paying a PBM a transaction fee on each prescription sale enables them to share some of the savings with patients directly. SingleCare has pricing deals with Walgreens, Walmart, CVS, Kroger as well as Rite-Aid. In total, the company reportedly has about 8,200 retail pharmacies/stores throughout the U.S., which represents over half of all the pharmacy locations in the country.

MedImpact Healthcare Systems, Inc's. is a San Diego-based PBM which is currently the giant HMO Kaiser Permanente's PBM. Its status as "last man standing" status as one of the last/only remaining independent PBM's not owned outright by a healthcare insurance company (although it is [or WAS] de facto controlled by its largest client: Kaiser Permanente; but note that in early 2022 Kaiser announced plans to drop MedImpact in favor of Express Scripts effective in 2023), it was also among the earliest PBM's to spot Rx drug sales opportunities with prescription drug coupon websites/apps. As a result, MedImpact works with virtually all of them. ScriptSave WellRx https://www.wellrx.com/, AmericasPharmacy https://www.americaspharmacy.com/ and BlinkHealth https://www.blinkhealth.com/ is each "powered" by the PBM MedImpact (the first two of these three are actually owned/operated by MedImpact) to deliver prescription drug pricing info. and discount coupons. Rival GoodRx also counts MedImpact as one of its non-exclusive PBM's, and MedImpact also helps to power McKesson's ScriptHero website/app. I don't think you need to check all three of them (WellRx, AmericasPharmacy and BlinkHealth), but I do recommend including at least one in your online shopping.

InsideRx https://insiderx.com/ Previously, I noted Cigna's Express Scripts which operates the InsideRx coupon-generating site/app whose prices cannot be found on GoodRx but notably also includes low prices for Express Scripts Cash-Pay Mail Order Pharmacy by InsideRx https://www.express-scripts.com/insiderx/#/ which is accessible by anyone whether they have insurance or not, or if their pharmacy benefits are managed by a different PBM (as mine was, being managed by Caremark). Due to self-preferencing, Express Scripts may be the low-price leader on certain generic drugs. Should that change, I have no problem buying elsewhere. While generic drug prices are frequently very low, there are some quirks to using the site/app: for example, it only accepts e-scripts from doctors. As noted, Express Scripts Mail Order Pharmacy drug pricing is not offered via rival sites/apps such as GoodRx, therefore if one wants access to generic drug prices from Express Scripts via coupons (which are occasionally the lowest prices available anywhere), they will need to search InsideRx. Express Scripts' InsideRx tool is slightly cumbersome to use (for example, searches must be done separately for both generic and branded drug names, and the site/app does not enable patients to sort the search results from lowest prices to highest). Still, due to self-preferencing, its own mail order pharmacy often comes in as the lowest-price offering on a number of generic drugs when purchased directly from the Express Scripts Cash-Pay Mail Order Pharmacy by InsideRx https://www.express-scripts.com/insiderx/#/ compared to other pharmacies within its own retail network.

OptumPerks https://perks.optum.com/ Rival United Healthcare's OptumRx PBM unit (or simply "Optum") operates the OptumPerks price comparison/coupon-generating website/app. It's basically a rebranded version of the old SearchRx which no longer operates its own brand. Some patients say that in terms of prices, OptumPerks frequently omits a large number of very heavily-rebated brand-name prescription drugs completely, hence rivals may offer better prices on those drugs. That said, Optum occasionally offers lowest prices on certain generic drugs which OptumRx sells very large volumes, although the company recently raised its prices on statin drugs by 45%, hence Mark Cuban's CostPlus Drug Company is now the clear low-price leader on those. OptumPerks is worth checking. As with rival Cigna Express Scripts InsideRx, sometimes, to get the lowest prices, patients may need to purchase the drugs using Optum's mail order pharmacy known as Optum Store https://store.optum.com/ to attain the lowest pricing on those particular generic drugs. Unlike rival Express Scripts which only accepts e-scripts, patients can actually mail their paper scripts into Optum Store which is an added benefit. In essence, one never knows if and when OptumPerks/OptumRx might enable better-priced offerings, so it should be included among those you search.

WellCardRx https://wellcardrx.com/ A smaller PBM known as Welldyne Rx, Inc. (and its subsidiary WellDyneRx LLC), much like its bigger PBM rivals including Express Scripts, OptumRx and MedImpact, also has a discount card program known as WellCardRx.  The WellCardRx program was moderately more difficult to use relative to programs offered by some of its rivals. To access it, the company requires you to enroll and activate it by completing a form requesting some basic personal info including name, address (to identify nearby pharmacies within its retail network) and email address. Visit https://wellcardrx.com/get-a-card/ to enroll. Buried within the mice-type of the WellCardRx website is the info you'll need to enroll and to activate your card. For example, you'll have to write-in (or type-in on the online form or app) a "Referring Group ID". If you don't have a "Referring Group ID" (and most people won't unless their employer insurance plan-sponsor has hired Welldyne as its PBM), the "default" value for this field is: WDRXDEF. The company also says that for the "Member ID" field, individuals should use their 10-digit phone #, followed by a 2-digit person code, and those codes include: 01=Member, 02=Spouse, 03=Dependent, etc. To search prices on WellCardRx website, visit https://wellcardrx.com/start-saving-now/pharmacy-savings/ and go to the paragraph marked "Discount Pricing Tool" and select the link to see discount price estimates for prescription drugs in your area. It notes: "Discounted prices are estimates. Savings will be calculated at time of drug purchase." In other words, verify with your pharmacist what the price with the WellCardRx coupon will actually be. Beware: you will be asked to enter the drug's name (also beware that some drug names cannot be found; if they cannot, try searching under the brand-name or drug class such as "insulin" until a name comes up automatically on the website or app) and you'll also need to enter the drug dosage/strength, frequency of dosage, how many units of the drug you're buying (such as tablets, vials, bottles, etc.), how frequently you refill the script, and your zip code. WellCardRx will then provide a list of about 5 pharmacies in your geographic area (based on zip code) plus its own mail-order pharmacy. The search functionality is not very user-friendly.

ScriptHero https://www.scripthero.com/ A relative newcomer (as of 2017) was the addition of one operated by drug wholesaler McKesson, which has a small, but relatively new discount coupon site/app called ScriptHero (through CoverMyMeds, which McKesson acquired in 2017); this option is powered by internally via CoverMyMeds, as well as SingleCare and the MedImpact PBM-powered website/app known as ScriptSave WellRx. As for patient prices on prescription drugs, ScriptHero is (like many of the others) hit-or-miss. Interestingly, I have found ScriptHero to deliver lowest prices on some unexpected medicines (perhaps due to McKesson's CoverMyMeds), therefore I recommend you included it in your search. But by combining several different inputs (including the SingleCare model, the PBM-driven model empowered by MedImpact, along with McKesson's own CoverMyMeds), it hopes to provide a more comprehensive Rx drug coupon-generating website/app and serve its community pharmacy client base as well. Patients may wish to consider using ScriptHero when it offers them the most attractive pricing. Some generics are priced very well with this option given its combo of PBM + SingleCare models deployed, and it offers discounts on many therapeutic classes of prescriptions.
 
Another factor to consider is Medicare drug plans.

There, many patients on Medicare subscribe to a supplemental plan sometimes referred to as a "Medigap" policy which they pay premiums for to receive additional benefits, such as avoidance of the proverbial Medicare "Donut Hole". There are stories about patients enrolling in such supplemental Medicare drug plans, and patients experiencing the prices that were promised during Medicare open enrollment can rise within a month (see https://www.npr.org/sections/health-shots/2022/05/03/1095946813/medicare-drug-costs-spike for one such example).

But the solution may be remarkably similar: bypassing your Medigap policy and paying cash for certain drugs without ever submitting a Medicare claim. Patients sometimes find it a hassle and some pharmacy techs don't realize they are not obliged to submit drug purchases to a Medicare drug plan because they're used to everyone on Medicare being handled a specific way.

On generics, in particular, the effort may be well worth simply bypassing your Medigap plan. It is all part of the same dysfunctional "system" (a misnomer if ever there was one). While my example was with a commercial healthcare insurance plan, its easy to envision something similar happening to Medicare patients.

The FTC Is FINALLY Now Investigating PBM Wrongdoing

The FTC's unanimous (5-0) decision to formally study the prescription drug middleman https://www.ftc.gov/news-events/news/press-releases/2022/06/ftc-launches-inquiry-prescription-drug-middlemen-industry) demanding data from the six largest Pharmacy Benefit Managers or "PBM's" and seeking information and records regarding their business practices is likely to eventually yield info about the impact that vertically integrated Pharmacy Benefit Managers has on public access and affordability of prescription drugs. But the study will take some time to actually gather necessary information, although the FTC demands for information are effectively subpoenas which can result in significant fines from FTC if the PBM's fail to comply. Ultimately, however, it will require action from both the FTC and the U.S. Department of Justice to litigate and resolve the underlying wrongdoing.

Meanwhile, the FTC has also formally put the drug companies (like Novo Nordisk) who pay massive "rebates" for exclusive formulary placement, and the PBM's who aggregate such rebates for the insurance companies that own them that it intends to examine possible anti-competitive practices by Pharmacy Benefit Managers (PBM's) with respect to the use of rebate arrangements ("rebates" cash are payments from drug manufacturers to PBM's in exchange for moving market share towards preferred products on the formulary. PBM's and the drug companies regularly pay legally-exempted kickbacks in the form of "rebates" for exclusive formulary placement, but FTC is saying such behavior may actually be in violation of several U.S. laws, including Section 5 of the FTC Act, Section 3 of the Clayton Act, Section 2 of the Robinson-Patman Act, and the Sherman Act to name several (see the new policy statement at https://www.ftc.gov/system/files/ftc_gov/pdf/Policy%20Statement%20of%20the%20Federal%20Trade%20Commission%20on%20Rebates%20and%20Fees%20in%20Exchange%20for%20Excluding%20Lower-Cost%20Drug%20Products.near%20final.pdf for details).

Patients are therefore forced to await the FTC outcome, because it seems very clear wrongdoing is taking place, and at least now the right party is finally investigating. In the meantime, at least one-in-four of us find using the PBM-powered coupon workaround can yield some rather significant savings of 55% to 85% savings; and I encourage readers to consider my own experience as an example.

Friday, July 22, 2022

Novartis' Sandoz Is Back In The Insulin Biosims Market. Can It Succeed?







Back in December 2018, the Sandoz division of Swiss pharmaceutical giant Novartis announced (see the full announcement HERE) "Sandoz enters into commercialization and supply agreement for insulin biosimilars". It also revealed that Sandoz had entered a "commercialization and supply agreement with Gan & Lee" which it added 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".

Few Americans have ever heard of Gan & Lee, although this year, at the American Diabetes Association's 82nd Scientific Sessions in New Orleans, Gan & Lee had its first-ever exhibit in the vendor hall at the event (which was a hybrid event being held both in-person, as well as virtually, hence the exhibit hall wasn't as busy as others are.

Gan & Lee (now has an English language Twitter feed at @GanLee_ if you're inclined to follow the feed) and the company also set up an exhibit of its own at this year's ADA Scientific Sessions. It Tweeted "It's been three years since Gan & Lee exhibited at ADA tradeshow which was held in San Francisco in 2019." However, that was a tradeshow, not the ADA Scientific Sessions. Several pics from this year's ADA are found below.

 




 



 

 

 

 

 

 








The Sandoz/Gan & Lee announcement added that Sandoz intended to commercialize biosimilar versions of insulins "for the European Union (EU), United States (US) and other key territories" adding the "Agreement covers biosimilar insulins in early and clinical development for the top three selling branded insulins by sales: glargine, lispro and aspart."

Then, we heard absolutely nothing more about it, leading many to question what was really going on. Late last year, there were even rumors that Novartis was exploring a sale or spinoff of Sandoz. There were also rumors that Swiss patient organizations and socialists might consider buying Sandoz if it was sold. 

That was until Novartis quarterly earnings release on Wednesday, July 20, 2022. A tiny line in the company's long, 64-page second quarter & half-year 2022 financial statement (see page 21, specifically line three of https://www.novartis.com/sites/novartis_com/files/2022-07-interim-financial-report-en.pdf for detail) actually revealed that Gan & Lee insulin biosimilars are indeed still happening and may actually be further along in development than we ever realized. 

I took a snapshot from page 21 of the announcement which effectively said that Sandoz is now proceeding (see the third line in the image below). However, it will do so for the three bestselling insulin varieties in the U.S.: glargine U-100, aspart U-100 and lispro U-100. There was no mention of Sanofi's proprietary prandial insulin analogue known as Apidra, even though its patients expire in 2022 (the trouble is so few patients use it because Sanofi focused exclusively on selling Lantus), nor Sanofi's highly-concentrated glargine product branded Toujeo because its not a big seller.












The lispro being developed will be one of the first lispro biosimilar commercialized by a company other than Lilly, Novo Nordisk or Sanofi. Civica is the only other company which has stated its intention to sell a lispro biosimilar. There are like 4 different aspart (brand-name: Novo Nordisk Novolog Injection U-100) biosimilars pending approval, leading many to suspect that Novo Nordisk will simply stop making it and commercialize Fiasp instead. Rival Lilly has slashed its prices of Lilly Insulin Lispro Injection U-100 to $35/vial, which puts pressure on biosimilar-makers to match or beat those prices. Civica plans to sell one for $30/vial, which Lilly might be willing to match the price on rather than stop making it. It's newest prandial analogue Lyumjev was FDA approved on June 15, 2020, hence Lilly is still establishing a market for the new & improved prandial insulin analogue.

Chinese Manufacturing is Cheap, But Not Liked By Western Regulators; India Clearly Wins For Offshore Manufacturing

Sandoz itself certainly has the capability to easily make its own biosimilar insulins if it wanted to, but the underlying economics necessitated a partnership with a foreign partner. India tends to be the pharma favorite over China because India, unlike China, allows foreign regulatory agencies ready-access; it's a very straightforward matter and FDA has many regulators located in India.

China, on the other hand, is a communist country and the country's regulators make access to biotech factories very, very cumbersome, hence most biotech firms really prefer to avoid China. The last thing they want to experience is problems because regulators cite Chinese manufacturers for manufacturing problems. Hence, China has struggled to win over India in pharma manufacture. There, India is the clear winner.

One Indian biopharma company known as Biocon is a strategic partner of the company formerly known as Mylan which changed its name to Viatris after it merged with Pfizer's Upjohn business which was spun-off. Viatris today commercializes two insulin biosimilar versions of Sanofi's Lantus: Semglee, which is a branded, high-price/high-rebate product sold primarily to PBM's, and an identical but separate (it has a different NDC number), unbranded product called Viatris Insulin Glargine U-100 Injection which sells for 65% less money. Until Sanofi slashed prices on Lantus and introduced an unbranded U-100 glargine injection product, Viatris Insulin Glargine Injection U-100 was the least costly basal analogue in existence. Now, branded Lantus is cheaper at $35/vial. It's unclear if Viatris has adjusted its pricing on its unbranded glargine insulin to reflect the new market dynamics, but if not, it needs to.

The Viatris/Biocon partnership also now has an aspart biosimilar now pending FDA approval, as well as a U-300 version of glargine (Sanofi calls it Toujeo, but its really just Lantus at 3x as much insulin in every unit aimed primarily at the insulin-resistant Type 2 diabetes population). However, in early 2022, Biocon announced that it had acquired Viatris' half of their joint venture, with access to key staff for two years after the acquisition closes to aid the company in regulatory matters (particularly in the U.S.). Anyway, Biocon built a massive insulin factory, but its located in Johor, Malaysia not far from the Singapore border. Malaysia, similar to India, offers open access to regulatory inspectors whereas China does not. All Biocon insulins sold in the U.S. will be made and packaged in that particular facility. Biocon's Malaysia factory stumbled a bit initially with regulators from FDA, EMA, and Health Canada, but has since resolved the issues. It has also run into labeling problems on glargine insulin pens.

However, the "attractive" COGS (cost of goods sold) which Sandoz bragged about in the Gan & Lee announcement was effectively the entire reason for its partnership with Gan & Lee. By making the insulin Active Pharmaceutical Ingredient ("API") offshore in China, the margins would be much larger and would therefore either flow directly to the Novartis' bottom line, or in the case of the U.S., be used as legally-exempted "kickbacks" in the form of rebates paid to PBM's for exclusive formulary placement. The U.S. is odd in that PBM's consume so much of the profit margins which otherwise flow directly to the company bottom line, but because the U.S. market is so large, it remains too important for drug companies to simply avoid.

Under the terms of the Sandoz-Gan & Lee agreement, Sandoz will be fully responsible for commercializing the insulin biosimilars in the EU, US, Switzerland, Japan, South Korea, Canada, Australia and New Zealand (some other countries such as Sweden which fall outside EU drug oversight is also included). Gan & Lee will be responsible for manufacturing and development, with support from Sandoz, and shall adhere to the stringent manufacturing requirements established for Sandoz biosimilars. But it will do so at prices Sandoz could never accomplish by itself.

Ordinarily, regulatory inspection of biotech manufacturing facilities in China represent a major problem because regulators like the U.S. FDA, the European Medicines Agency ("EMA"), Health Canada, etc. are not free to inspect a facility without planning it months in advance. That leads many to believe that widespread Chinese non-compliance with adherence to Good Manufacturing Protocols ("GMP"), such as keeping a facility sanitary including such basics as staff wearing masks and hairnets all the time, how to handle accidental spills, etc. might not be happening regularly in Chinese biotech factories.

In essence, Chinese manufacturers can "dress-up" their unsanitary, non-compliant biotech manufacturing facilities in preparation for regulatory inspections from the FDA, EMA or Health Canada which they will know about many weeks in advance. But commercial partners negotiate free access to inspectors in their contracts, hence that means Sandoz bears ultimate responsibility if Gan & Lee isn't following GMP manufacturing standards and Sandoz must carefully manage it's Chinese manufacturing partner.

Gan & Lee has global aspirations of its own and rival India's Biocon is years ahead of them, hence it is now trying to establish name recognition among doctors around the world. As for Sandoz and its U.S. insulin aspirations, this much seems clear: first, the U.S. will likely necessitate it having two NDC numbers for each biosimilar. One will be a branded, high-price/high-rebate product aimed at the PBM market, and the other would be an unbranded (except for the Sandoz name) product with a lower list price and no rebates aimed at the patient market. 

Lilly, however, has aggressively cut prices on lispro which means the highest price Sandoz Insulin Lispro Injection U-100 can command is $30/vial. Alternatively, Sandoz may opt to simply bypass the PBM kickback (rebate) issue and focus solely on unbranded products. Given that Lilly has told investors that its unbranded Lispro product now accounts for one-third of U.S. Humalog sales, its not outside the realm of possibility to skip the high-price/high-rebate PBM route and offer an unrebated product instead. By partnering with a Chinese partner, Sandoz can manage it, but it will face stiff competition from very competent rivals. That means success is hardly a guarantee. But perhaps it is willing to sell insulin biosims for LESS THAN $30/vial?!

It will be fascinating to watch the space to see how Sandoz proceeds. It may pave the path for biosimilars of other drug classes.

Tuesday, July 19, 2022

CivicaScript Signs Navitus as Partner; Costco Pharmacies Will Sell Civica Insulin Biosims

$30/vial Could Become The New Normal in 2024

My readers may recall that on March 3, 2022, I blogged about concurrent press releases from both Civica, Inc. and the JDRF (see my coverage HERE for original news, followed by more detailed analysis on how it was poised to disrupt the PBM kickback scheme HERE) that its CivicaScripts operating unit plans to enter the U.S. market for insulin biosimilars starting first with the basal insulin analogue insulin glargine, followed by biosimilars of lispro and aspart, which is expected to happen in 2024 assuming it encounters no regulatory delays.

The original aim of starting with glargine first was to try and disrupt the severe underlying market dysfunction that has resulted in basal insulin analogues being priced at nearly three-times as much money as prandial insulin analogues are now (in part because the unbranded Lilly and Novo Nordisk products introduced in 2020 had successfully brought prices of prandial insulins down while Sanofi had not done the same with Lantus). However, on June 28, 2022, Sanofi announced (see my coverage of that HERE) announced a two-pronged approach to not only slash prices of branded-Lantus to a price of $35/vial with a ValYOU coupon, but will also introduce an unbranded glargine product aimed at bypassing the entire PBM rebate mess which has worked fairly well for rivals Lilly and Novo Nordisk on selected prandial insulins.

Lilly has since revealed to investors during the company's most recent quarterly earnings presentation to investors that its unbranded Lilly Insulin Lispro now accounts for about one-third of the company's total U.S. Humalog sales, while rival Novo Nordisk revealed to investors in the company's 2021 Annual Report that in 2021, Novo Nordisk's U.S. affordability offerings (the biggest one being Novo Nordisk Pharma Inc.'s "unbranded biologic" version of Novolog called simply Novo Nordisk Insulin Aspart U-100) had "reached more than 1 million Americans" since the unbranded prandial insulin analogue product was introduced the previous year.

That said, while the price-cuts have been very welcome relief for patients who have been unfairly victimized by PBM rebate aggregation which has largely left patients without of the benefit of the deep discounting from manufacturers, Civica's model will rely on offshore manufacturing of the Active Pharmaceutical Ingredients ("API's") with a collaborative partner named GeneSys Biologics Pvt. Ltd. based in Hyderabad, India who will make the bulk insulin there, and then ship it to a new "fill & finish" facility in Petersburg, Virginia near the state capital of Richmond, where it will be packaged into vials and insulin pens, and put into boxes with relevant package inserts required by FDA and shipped to pharmacies nationwide. Still, there was still some skepticism that Civica could commercialize insulin in U.S. retail pharmacies. PBM's are notorious for using contracts to punish retail pharmacies that attempt to bypass the PBM rebate complex. 

 





 



However, on July 13, 2022, we saw the first concrete evidence that Civica's retail commercialization plan will actually happen. A joint press release from CivicaScript and Navitus Health Solutions (Navitus is smaller-sized PBM which claims about 7 million covered lives, of which 2.5 million are commercial lives; it is a PBM owned by the nonprofit hospital chain SSM Health and Costco Wholesale Corporation) announced (see the press release at https://www.businesswire.com/news/home/20220713005349/en/Navitus-Health-Solutions-Joins-CivicaScriptTM-to-Further-Availability-of-Lower-Cost-Generic-Medications/) that Navitus had joined CivicaScript as a "founding member", although the most practical impact of this particular announcement is that it guarantees that Civica's biosimilar insulins will be available for purchase from Costco pharmacies nationwide once they're FDA approved. Costco also operates its own mail order pharmacy (to be licensed as a pharmacy in the U.S., no membership can be required, therefore you don't need to be a Costco member to purchase Costco Pharmacy prescriptions online or at its warehouses) which can be found HERE. Users can search prescription drug prices for the Costco Member Prescription Program (which is a cash-pay program which does not accept insurance) option by visiting https://www.costco.com/cmpp. This is believed to be the first of similar deals CivicaScript is now working to arrange to ensure its biosimilar insulins will be available for patients to buy.




 

 

CivicaScript President Gina Guinass said of the Navitus partnership "We are thrilled to have Navitus as a founding member and partner in our commitment to putting people first by lowering the cost of high-priced generic medicines. We partner with organizations that share our commitment to transparency and lowering costs – because everyone deserves access to the medicines they need to stay healthy."

Back on April 2, 2019 (see the FDA statement HERE), the U.S. FDA promised that its new regulatory transition of insulin from the drug to the biologics approval pathway would supposedly help to open up these products to more biosimilar competition, saying at the time "We believe the biosimilar pathway will enable a more robust route for developing lower cost copies of insulin, including products that are fully interchangeable with branded insulins."

FDA added: "While the regulatory transition of insulin products nears, we're cognizant of the fact that it won't be soon enough for the millions of Americans who struggle to pay for their insulin today. Helping to ensure patients have access to the critical drugs is a responsibility shared by all stakeholders, including manufacturers and health plans. We all need to do our part. A drug that's nearly a century old should not have a list price that increases between 15-17% annually. American patients who rely on insulin to live deserve to have high-quality, affordable options. The FDA is dedicated to facilitating access to insulin. We hope our industry partners will join us in doing all we can to help people who need access to the live saving medicines, now."

Indeed, CivicaScript insulins will put the new FDA approval process for biosimilar insulin to the test with applications for three biosimilar insulins at the same time. Civica has already announced that it hired Germany-based Profil to conduct necessary FDA trials, and it's been extraordinarily well-disciplined in the manner it's approaching commercialization. While the process mirrors what rivals including Viatris/Biocon are already doing, being quick isn't exactly something FDA is known for (especially on generic products). Already, there are biosimilar versions of insulin aspart injection U-100 (biosimilar Novolog) from Viatris/Biocon and Lannett/HEC now pending FDA approval, although we have yet to see any concrete evidence of the status of those products which will rely on a very similar FDA approval process. We may wish to watch for forthcoming biosimilar aspart announcements from Viatris/Biocon and Lannett/HEC for clues on what we can expect to see with the forthcoming Civica insulin biosimilars.

However, the most exciting aspect remains the fact that Civica will likely be disruptive to the PBM Kickback scheme, and now we know for certain that Costco will be one of the places where we'll be able to buy these products.

Thursday, June 30, 2022

Sanofi Joins The Ranks of $35/vial Insulin, Adds New Unbranded Insulin to Product Lineup

Yesterday, Sanofi U.S. made an announcement: Effective on July 1, 2022, the company will lower out-of-pocket cost of insulin for uninsured patients and expand access in underserved communities (in reality, the lower prices are available to anyone including those who have insurance deductibles to satisfy or if they're covered by Medicare as long as the insulin purchases are not submitted as insurance or Medicare claims; users must pay cash). The press release can be viewed at https://www.news.sanofi.us/2022-06-29-Sanofi-to-lower-out-of-pocket-cost-of-insulin-for-uninsured-patients-and-expand-access-in-underserved-communities.

Sanofi has been a laggard relative to its rivals Lilly and Novo Nordisk. For example, in 2019, both Lilly and Novo Nordisk each announced plans to introduce lower-priced "unbranded" prandial insulin analogue products which are not impacted by PBM rebating. The NDC number for the Winthrop U.S. Insulin Glargine Injection U-100 vial is NDC Code 0955-1729-01. That could be relevant if you wish to buy the unbranded Sanofi non-branded glargine U-100 product and it may prove least costly. Those unbranded efforts have been generally successful in ensuring more widespread affordability (prices are artificially-inflated due to the manner in which pharma commercializes drugs; relying on Pharmacy Benefit Managers ["PBM's"] to secure an exclusive therapeutic class position on drug formularies). 

The U.S. FTC recently announced a new policy whereby PBM's and the drug companies which pay legally-exempted kickbacks in the form of "rebates" for exclusive formulary placement may be in violation of several laws, including Section 5 of the FTC Act, Section 3 of the Clayton Act, Section 2 of the Robinson-Patman Act, and the Sherman Act to name several (see the new policy statement at https://www.ftc.gov/system/files/ftc_gov/pdf/Policy%20Statement%20of%20the%20Federal%20Trade%20Commission%20on%20Rebates%20and%20Fees%20in%20Exchange%20for%20Excluding%20Lower-Cost%20Drug%20Products.near%20final.pdf for details).

Regardless of what the FTC may or may not do, since launching in 2020, unbranded insulin now accounts for nearly 1/3 of Lilly's U.S. Humalog sales. Lilly continues to commercialize its newer, still patent-protected, slightly faster prandial analogue branded Lyumjev (as does rival Novo Nordisk with Fiasp). However, Lilly no longer sees paying PBM's legally-exempted kickbacks in the form of multi-billion dollar rebates as a competitive necessity to maintain sales of an insulin which has now lost patent exclusivity. 

Lilly found that it was cheaper for the company to simply cut prices on the unbranded insulin to a price of $35/vial with a manufacturer coupon from https://www.insulinaffordability.com/ than it was to increase multi-billion dollar bribes paid to PBM's needed to secure formulary placement. Rival Novo Nordisk is addicted to PBM rebates which is eating into the company's insulin margins forcing it to pursue the GLP-1 market for T2D for most of its profits. It has made no price reductions for Novo Nordisk Insulin Aspart (yet). But, I'm betting the company will simply "retire" Novolog instead. Still, none of the big insulin-makers have reduced insulin prices to $30/vial (which they could; the patents on these insulin analogues have all expired) which is why the March 3, 2022 Civica biosimilar announcement will undoubtedly add competitive pressures to reduce prices by another $5/vial.
 

U.S. sales of Sanofi insulins have been declining. In late 2021, Sanofi's bestselling basal insulin analogue branded Lantus was dropped from several big PBM formularies, including both Express Scripts and Prime Therapeutics who both dropped Lantus in favor of Biocon's interchangeable glargine product branded as Semglee which is commercialized by Viatris (for the time-being anyway; Biocon recently acquired that company's share of their joint venture, with access to key staff for a period of 2 years following the closure of that acquisition). The company also sells a separate unbranded glargine biosimilar known (for the time being, at least) as simply Viatris U-100 Insulin Glargine also exists with a lower list price but the price is still quite high, although price comparison sites do not typically include the unbranded product in their searches. Still, the list price is 65% LOWER than the identical, branded product sold as Semglee.

Anyway, Sanofi's Lantus being dropped from two key formularies has cut very deeply into Sanofi's U.S. insulin sales. A complicated spinoff for insulin and other active pharmaceutical ingredients to a new stand-alone company known as Euro API recently occurred; although for the time being, the nuts-and-bolts distribution of its insulin still remains with Sanofi. Still, Sanofi's ValYOU coupons aimed mainly at the uninsured market (but available to ANYONE) have been caught in a time-warp with prices fixed at $99/vial while its biggest rivals now have products selling for as little as $35/vial. This is especially notable for Sanofi's prandial insulins (including its proprietary but now out-of-patent Apidra and its biosimilar of Lilly Humalog branded as Admelog). Sanofi has been mainly focused on Lantus, letting those other products fall by the wayside in terms of sales.




 

 

As part of this initiative, Sanofi will also introduce an "unbranded" basal insulin analogue (a logo for which is pictured both in the image above, and in the coupon below) which will be called simply Sanofi U-100 Insulin Glargine Injection. The FDA-mandated disclosure insert in the unbranded insulin glargine product discloses the new product is from Winthrop US, which is a separate business unit dedicated to commercializing "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), not too dissimilar to rival's Novo Nordisk Pharma Inc. which commercializes that company's unbranded insulins.

Since Lilly introduced its unbranded insulin lispro in late 2019, it has revealed to company investors that its unbranded insulin called simply Lilly U-100 Insulin Lispro Injection now accounts for nearly 1/3 of the company's U.S. Humalog sales (and that shift has occurred in less than 3 years on the market). In fact, that shift required virtually no marketing, no army of salesmen/saleswomen calling on doctors offices and no costly TV ads. I also estimate that Novo Nordisk's Insulin Aspart Injection likely accounts for about 20% of that company's U.S. Novolog sales because it is 20% more expensive than Lilly's unbranded insulin sells for.

Critics say the big insulin companies' commitment to unbranded insulins are only half-hearted and questionable at best, and appear to be more of a PR move aimed at deflecting criticism away from their role, rather than a core underlying business strategy. For example, none of their newest prandial insulin analogues have unbranded versions, nor do any of their basal insulin analogues (until now, anyway). Therefore, it is perhaps unsurprising that Sanofi's first (and so far, only) unbranded insulin product will only be for insulin glargine.

Regardless, with the new announcement, Sanofi's under-utilized proprietary prandial analogue branded as Apidra [U-100 insulin glulisine rDNA origin] which will soon lose patent exclusivity) will NOT have an unbranded version, although I believe the ValYOU coupons will still work on it. 


 


 


Starting July 1, 2022, the Sanofi ValYOU https://www.teamingupfordiabetes.com/sanofidiabetes-savings-program manufacturer coupons will enable patients to purchase Sanofi insulin products at a cost of just $35/vial. 




 

 

 

 

 

 


As a point of comparison, the lowest price for a branded biosimilar version of glargine known as Semglee can be purchased today from Express Scripts Cash-Pay Mail Order Pharmacy by InsideRx for $86.79/vial, which is considerably more expensive than Lilly Insulin Lispro sells for with a manufacturer coupon at just $35/vial. But the Sanofi announcement will now put more much-needed downward pressure on rival glargine prices whose prices have remained stubbornly-inflated when compared to prandial insulin varieties.

Not ironically, as I have covered in several recent posts this year, on March 3, 2022, nonprofit drug-maker Civica, Inc. announced its intention to commercialize three insulin biosimilars, including one of U-100 glargine for a price of just $30/vial possibly as early as 2024 (assuming it encounters no regulatory delays) promises competitive pressure on big insulin to reduce their prices even further.

The Sanofi move is certainly a step in the right direction after years of doing next to nothing, although it still leaves many unanswered questions about big insulin-makers' long-term commitments to unbranded insulin strategies, and also why their price reductions are only to $35/vial rather than $30/vial?

Still, the price reductions are welcome news for U.S. patients. It will put immediate downward pressure on the prices for Lantus and biosimilars of that product.

Thursday, June 23, 2022

PBM Trade Group "A Summary of Insulin Coverage in Medicare Part D" Study from Milliman, Inc. Health

The PBM trade group known as the Pharmaceutical Care Management Association (PCMA) recently commissioned Milliman Health to conduct a study of Medicare beneficiaries enrolled in a Part D Plan to determine if they "prefer" brand-name basal insulins over the biosimilar Semglee which is made by Biocon (currently commercialized by Viatris, although Biocon recently announced it was acquiring Viatris half of their joint venture). 

In reality, it is little more than smoke and mirrors from a PBM trade group.

The reason PCMA commissioned the study was to try and generate "evidence" that patients somehow prefer costly, heavily-rebated branded insulins over biosimilars. The study can be seen at https://www.pcmanet.org/wp-content/uploads/2022/06/6-7-22-Insulin-Landscape-Summary-report.pdf

If you visit slide #7 (the one which addresses "Long-Acting Insulin"), that addresses the reality that many Medicare Part D plan members are covered by a plan which now "prefers" Biocon's Semglee over Sanofi's Lantus. Cigna's Express Scripts last year dropped Sanofi Lantus in favor of Semglee (likewise, the PBM known as Prime Therapeutics also preferred Semglee, although Prime relies upon Express Scripts for price negotiations and retail pharmacy coverage). So far, there are a handful of basal glargine biosimilars including Semglee, another unbranded version called Viatris U-100 Insulin Glargine, as well as two made by Lilly including Basaglar and another which will be branded as Rezvoglar which was approved under a new FDA procedure specifically for biosimimilars (Basaglar was approved under the old FDA approval method as a "follow-on" biologic).

But this study was more an exercise in trying to prove the value PBM's say they deliver, rather than compelling, methodologically-sound market research.

I would dare say that the reality is that what Medicare Part D beneficiaries want most is for their Part D plans to share the financial benefit of any savings the plan generates by choosing lower-cost biosimilars, rather than making them pay costs which are comparable to the brand-name innovator product for a biosimilar drug (in this case, Sanofi [soon to be known as Euro API] Lantus).

In the end, the research does not actually prove much of anything. If Part D beneficiaries received Semglee at a price of $60/vial, they might find that "preferable" to Lantus. Instead, Express Scripts is charging patients anywhere from $162.11/vial to $194.82/vial for branded Lantus (although with a ValYOU coupon from Sanofi they can buy it for a price of $99/vial), while Semglee can be purchased for a price ranging from $67.94/vial to $85.75/vial.

The basal insulin market is even more distorted price-wise than the prandial insulin market is if you can believe it. Its therefore unsurprising that Civica (which plans to introduce a biosimilar of glargine first) at a price of just $30/vial or $55 for a box of 5 insulin pens will aim to disrupt the basal insulin market first.

Friday, June 10, 2022

How the Civica Insulin Announcement Could Be Disruptive to the PBM Kickback Scheme

Yours truly has written an article. I have given some more serious thought to the Civica insulin announcement made on March 3, 2022 (my article has a link to the original press release) and I think it could be very disruptive to what I have dubbed the "PBM Kickback Scheme". You can read my assessment below, or at https://www.slideshare.net/ScottStrumello/civica-insulin-assessment.


Ironically, this month's New England Journal of Medicine also has a very interesting (and similar) analysis of the exact same topic (the Civica insulin announcement) in its "Perspective" section in an article entitled "A Radical Treatment for Insulin Pricing" (the link to the article can be found at https://www.nejm.org/doi/full/10.1056/NEJMp2203001, although I'm not sure you can buy per-article access to NEJM as unless you subscribe to NEJM, which is different from other journals).

I opted to to self-publish my own article in Scribd because there were points which others have chosen to gloss over which I believe the diabetes world should understand. Those elements happen to be core business strategies. 

Still, my underlying assessment is essentially the same as the NEJM article, and I'm generally in agreement with Harvard's Leemore Dafny: the Civica insulin effort stands to be disruptive. She generalizes it as being disruptive to pharmacy supply chain entities, whereas I believe it will be most disruptive to the PBM kickback scheme (hence my own article title).

In her article, Harvard's Leemore Dafny did identify what she saw as potential risks for Civica which she felt were worthy of acknowledging. For example, she speculated on what types of specific barriers Civica might encounter in executing its insulin plan.

I was especially bothered about the first element she wrote about, because it would be very easy to envision PBMs' doing such a thing using their creepy retail pharmacy contracts (if those don't already contain provisions which they could threaten pharmacies with if they carry Civica insulins), in which she writes:

"Civica will face important barriers to executing this plan, though. In addition to usual implementation and regulatory challenges, intermediaries threatened by this approach may introduce new obstacles; for example, they might pressure pharmacies not to carry Civica's insulin products."

It's easy to envsision PBM's attempting to pressure pharmacies within their retail networks from carrying Civica insulins. After all, the PBM kickback scheme is dependent on patients buying heavily-rebated, branded insulins. If they carry a less costly insulin, that scheme is disrupted. Hence we can imagine PBM's threating pharmacies within their networks that they'll consider it a violation of the PBM contract if they were to carry Civica insulins. The pharmacy contracts PBM's use are now subject to recently-announced FTC scrutiny, which will conduct a study of the impact which PBM contracts have on prescription drug prices for patients and other entities in the prescription drug supply chain.

That said, I believe the other risk she identified isn't a threat at all. She opined: "intermediaries won't try to block Civica's end run and will instead promote new diabetes agents that would be subject to the existing system".

That idea is far-fetched because a vast majority (by some estimates, around 77%) of U.S. insulin users have the autoimmune form (Type 1) of diabetes, and while they use significantly less insulin volume than patients with Type 2 use, the reality is that not one new agent has been ever been developed which has FDA approval for Type 1 diabetes. As a result, no alternative therapies to insulin exist for treating T1D; there are NO new "diabetes agents" for them to promote to that patient population, hence that will not happen.

For the record, NEJM did a very short (7:35) interview with Leemore Dafny about her NEJM article. The NEJM interview link can be found at https://www.nejm.org/doi/full/10.1056/NEJMp2203001 or you can catch that short interview below.
 

I also managed to locate the URL for the MP3 of NEJM interview (NEJM didn't make finding it easy):
https://www.nejm.org/doi/do_file/10.1056/NEJMdo006587/NEJMdo006587.mp3

 

In the article I authored (above), I documented some of the underlying biosimilar insulin business strategies which I thought was particularly relevant to the conversation.

Most notably, my analysis is that biosimilar manufacturers of insulin are essentially FORCED to use offshore manufacturing to ensure their margins are fat enough so they can pay massive rebates to PBM's in hopes of landing one. When that happens, the profits for the biosimilar-maker will roll-in remarkably quickly. In fact, we know that Viatris/Biocon makes its insulin offshore in a massive Biocon factory located in Johor, Malaysia (not far from the Singapore border), and it finally managed to land itself on several formularies in 2021, when its insulin rebates persuaded Express Scripts to drop the innovator Sanofi Lantus from its formularies and instead switch to its FDA-designated "interchangable" U-100 glargine biosimilar Semglee instead. Ditto for the PBM Prime Therapeutics.

Note that Prime Therapeutics as a PBM is basically joined at the hip with Express Scripts anyway. In late 2019, Prime Therapeutics announced a partnership with Express Scripts to provide its retail pharmacy network and pharmaceutical manufacturer contracting, hence it pretty much does whatever Express Scripts does, although unlike Express Scripts, Prime Therapeutics does include both the branded (Semglee) and unbranded (Viatris U-100 Insulin Glargine) versions of the insulin glargine on its formularies, with comparable placement for both on its formularies (Sanofi's Lantus is still excluded), ultimately leaving the decision up to employer plan sponsors if they opt to include the less costly, unbranded product. Many plan sponsors choose not to do so, as it potentially reduces the amount of rebate dollars they can collect as "premium offsets" because patients aren't helping to bankroll it with their own pharmacy expenditures.

For its part, the March 3, 2022 Civica insulin press release contained a curiously little-acknowledged, yet critically important paragraph (see the release at https://www.businesswire.com/news/home/20220303005321/en/Civica-to-Manufacture-and-Distribute-Affordable-Insulin/ for details), which reads:

"Civica has entered into co-development and commercial agreement with GeneSys Biologics for these three insulin biosimilars. Civica will use drug substance produced in partnership with GeneSys and will have exclusive rights in the U.S. to market and sell these insulins at costs that are substantially lower than what is currently available in the U.S."

That means is the Active Pharmaceutical Ingredient ("API") for its insulins will be cultured in biorwactors at Hyderabad, India-based GeneSys Biologics and the API will then be shipped in bulk to Civica's own factory in Petersburg, Virginia which for insulin will essentially become a "fill & finish" facility rather than an actual manufacturing facility where the insulin is actually made. I'm not sure what they mean when they say the insulin will be manufactured in Virginia, because it will actually be manufactured in India. For the record, by some estimates, Hyderabad, India produces some 40% of API's used by U.S. drug companies. Some is due to pharma's greed to line their own shareholder's pockets, and occasionally its because the sources for those API's are mainly from Indian or Chinese companies.

JDRF's CEO Aaron Kowalski acknowledged this reality in an interview he did for the "Diabetes Connections With Stacey Simms - Type 1 Diabetes" podcast. If you listen carefully to that conversation (the link to that podcast can be accessed at https://diabetes-connections.com/i-think-we-have-an-answer-jdrfs-ceo-explains-the-plan-for-non-profit-insulin/) (to hear it; you can skip ahead to 5:46) in which he says:

"So, there's kind of two components to this: one is we're working with a partner in India who will be manufacturing the active part of the insulin, so that would be the insulin molecule itself. And then, that will be shipped to a plant in Virginia where they will package and bottle the insulin or put it in pens. They, the Civica team has been building that plant, and this manufacturer has the capability of making insulin already."

Only Civica will be packaging insulin which has already been cultured in GeneSys Biologics bioreactors located in Hyderadad, India. Why do they insist in saying that Civica is actually "making" or "manufacturing" that insulin when they are essentially packaging and labeling it with a reputable partner located offshore?

Oddly, that's the not-so-little part which I believe really turns the PBM rebate game on its head. The Civica insulin plan will instead use the margins which are derived from offshore manufacturing to instead reduce patient prices, rather than pay legally-exempted kickbacks to PBM's as rebates. By comparison, Viatris/Biocon is using the margins it derives from making their glargine insulin in Johor, Malaysia to pay massive rebates to Express Scripts and Prime Therapeutics so they carry the medicine on their formularies.

That's a very big deal if Civica actually pulls it off.

The NEJM interview with Leemore Dafny said "I've been told that they've hired a number of experts who have a lot of experience in this part of the value chain...they also have partnership from a lot of payers" as a result, she sees room for optimism in the business model Civica will be taking.

Those are certainly positive signs.

But in MY article, I also acknowledge another unappreciated side-effect of the Civica insulin deal which has so far yet to be acknowledged by anyone:

Civica will transfer the ability for patients and their doctors to freely select a particular insulin. That was previously a dynamic which PBM contracting and rebate aggregation effectively ended. That means that now, once Civica's insulins are introduced, biosimilar versions of insulin at an affordable price could effectively become a reclaimed dynamic which PBM's seized from patients and their doctors.

That's how diabetes is managed in most other affluent markets; yet the U.S. is a rare outlier in that our choice of insulin is based on whichever company pays the PBM the biggest rebates, not the one which is therapeutically most beneficial to the patient. Remember: Novolog and Humalog are NOT designated by the FDA as being "interchangeable" with one another, but the PBM's treat them as interchangeable anyway (in effect, PBM bean-counters are practicing medicine without an actual medical license).

In any event, its worth acknowledging that both myself and NEJM concur that the Civica insulin arrangement promises to disrupt an industry which has proven itself resistant to fundamental change. It will be a great day in the U.S. when that happens!