Tuesday, September 14, 2021

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

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

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

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

It defies logic!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Guess what? 

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

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

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

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

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

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