Thursday, March 03, 2022

Civica Rx: We're Entering the U.S. Insulin Biosimilar Business!

This morning, I woke up and unplugged my phone from its charger, and went to close Twitter (which I forgot to close last night before I went to bed) and at the top was a press release from Civica Rx. The press release is here: Civica to Manufacture and Distribute Affordable Insulin http://dlvr.it/SL0QZV 

The news was greeted as a welcome development by JDRF, Beyond Type 1 and the Helmsley Charitable Trust to name a few. The ADA said nothing formally about it as of 10:00 AM. In essence, Civica Rx says it plans to sell biosimilar versions of Lantus, Humalog and Novolog. 

As usual, there's a lot of details unpack here. 

Here are some details you aren't likely to get elsewhere. 















One highlight is that Civica Rx isn't selling anything...yet. The company expects to do so starting in 2024 assuming it encounters no unexpected approval delays. The company announced a while back that it was creating an operating unit called CivicaScript dedicated to lowering the cost of select high-cost generic medicines at the pharmacy counter. 

It is following a "cost-plus" (which is the actual cost plus a limited margin) model similar to others such as Mark Cuban's CostPlus Drug Company startup (which could also offer insulin biosimilars, but hasn't committed to doing so), but Civica says it will require that retailers sell its insulin biosimilars for "no more than" $30/vial, or $55 for a pack of 5 pens". Civica already has a website for the insulin products at https://civicainsulin.org/. Civica Rx also published a detailed fact sheet at https://www.civicainsulin.org/wp-content/uploads/2022/03/Civica-Insulin-Announcement-Fact-Sheet.pdf which I encourage you to read. 

Civica has some advantages over other biosimilar makers. For one thing, it will be packaging the insulin in the U.S. state of Virginia (it appears to be still making the insulin in bulk offshore in India, at least initially), but the fill & finish is definitely being handled domestically. The overwhelming strategy of biosimilar-makers (so far) has been to work within the rebate-driven mess that defines the U.S. insulin market. The reason they need to do it offshore is so the margins are high enough, and then using those margins to pay rebates in order to bribe (I mean pay "rebates") to PBM's to "prefer" the biosimilar insulin brands over the innovator brand-name products. They're forced to make the drugs offshore in places like China or Malaysia. But by avoiding the rebate-driven mess, Civica can use the savings to pass them along to patients instead.

Rival biosimilar manufacturer Viatris/Biocon are already doing just that with the Lantus biosimilar branded as Semglee, which Drug Channels says Viatris proudly announced that Semglee would become the "first-ever interchangeable insulin biosimilar preferred on Express Scripts' largest formulary. Currently, that gives Semglee an exclusive, 12-month period to be the only "interchangeable" biosimilar of Lantus. For 2022, the branded Semglee product will be on Express Scripts’ National Preferred Formulary (NPF). The NPF is Express Scripts' largest commercial formulary, with more than 28 million lives. Express Scripts also highlighted the exclusion of the Lantus reference product from its NPF. Put another way: Viatris had to nearly triple the list price of Semglee before Express Scripts would add the product to its formulary." 

Drug Channels adds: "Rival PBM Prime Therapeutics also added Semglee over Lantus to its drug formularies". But Drug Channels notes: "For Prime Therapeutics' 33 million members, both the branded and unbranded versions will have comparable formulary placement. (Lantus will be excluded.) Prime's press release states: "we are not beholden to rebates, as we're able to also prefer the lowest net cost therapy." Adam Fein who is the principal author of the Drug Channels blog says: "I interpret that statement to mean that the net costs are comparable for the two versions." 

A few companies now deploying semi-successful work-arounds using the dual branded/unbranded strategy whereby a high-price/high-rebate branded version sells to PBM's, and another identical "unbranded" version of the same product with a different NDC number are already on the market now. Both Lilly and Novo Nordisk are already doing this for their Humalog and Novolog innovator products, and their unbranded products can be purchased for cash at prices which are about 75% less than the rebated products (to get them for 75% off, patients must use coupons, such as from the manufacturer or a firm like GoodRx). But the companies are NOT doing the dual strategy for a host of other insulin varieties they sell, including their newest (and still patent-protected) prandial insulin varieties known as Novo Nordisk Fiasp (the name means "Faster Insulin Aspart") and Lilly Lyumjev. 

Similarly,  Novo Nordisk's is not selling any unbranded versions of its basal insulin varieties, including Levemir and Tresiba, nor does Lilly's own Lantus biosimilar branded as Basaglar sell an unbranded version. Novo Nordisk also questionably sells a more costly version of Novolog merchandised as Walmart Relion Novolog which sells for MORE money than Novo Nordisk Insulin Aspart sells for at WalGREENS with a GoodRx coupon, raising questions about exactly how "affordable" the Walmart co-branded variety of that insulin actually is. More likely, that is simply padding Novo Nordisk's bottom line. Biosimilar makers including Biocon are now also planning to deploy the same branded/unbranded strategy for a biosimilar of Novo Nordisk's now out-of-patent Novolog (Biocon has a version of aspart now working its way through the FDA approval process). 





Civica doesn't appear to want to play the PBM rebate game at all, which is to its (and patients') benefit. It seems that it will sell insulin varieties sold through pharmacies and then directly to consumers. 

Based on Civica Rx's actions and statements, it appears to want to bypass the PBM's completely. For patients this means lower, more-predictable out-of-pocket costs for medicines needed for survival. Patients can ask their doctors to prescribe insulin under the generic drug name, enabling the patient to switch from the unbranded and/or biosimilar branded to the innovator branded versions once any deductible has been satisfied. 

With any luck, more insurance plans will eventually adopt the 2019 IRS guidelines which classifies insulin as a "preventative" treatment eligible for pre-deductible coverage, although I'm still forced to use the insulin brand my insurance company "prefers" due to rebates. My (pre-deductible!) insulin cost is actually quite reasonable; but if Civica Rx's price is $30/vial, it could still potentially be cheaper for me to buy that product than the formulary brand my insurance says I should be using. I would likely choose to use insulin lispro over insulin aspart (which is Aetna's preferred brand right now). Unclear is if Lilly might respond by further reducing prices on its own "authorized generic" Lilly Insulin Lispro. The company has already reduced prices by an additional 40%, and its theoretically possible it would (and COULD) reduce its prices to be comparable. Right now, they are collecting as much as the company thinks it can.

You may recall that Civica Rx is a startup drug company based in the Salt Lake City, UT area which was launched by seven health systems/nonprofit hospital chains along with philanthropic funding. It was formed four years ago with philanthropic backing from the Arnold Foundation (a Texas-based nonprofit bankrolled by multibillionaire John D. Arnold, whose Arnold Ventures LLC also helps to fund a number of other nonprofits in the healthcare space, including T1International and David Mitchell's Patients for Affordable Drugs) and a few others. Civica Rx was started in response to repeated shortages for drugs hospitals rely on but were oddly in very short supply. Among them: IV bags of saline (which is basically sterile salt water) which curiously experienced acute shortages a few years ago.

Civica Rx's press release today was a validation of something which the startup had been hinting it was thinking about doing for the past few years: Civica Rx has officially announced it intends to sell its own biosimilar versions of three widely-prescribed insulin analogue brands at no more than $30 a vial, or $55 for a box of five pen cartridges which it says is for people with or without insurance. However, based on the company's statements, the insulin will not become available until early 2024, while a manufacturing facility is completed and regulatory approvals are obtained. It also says it will start with insulin glargine, which already has several biosimilars, but those are curiously expensive. But a number of others are now pending FDA approval, so perhaps the Civica price will be a differentiator. 

The Civica Rx insulin biosimilars will reportedly be produced in partnership with GeneSys Biologics (a privately-held Indian biotech firm which is based in Hyderabad, India) at Civica's 140,000 square-foot "fill & finish" facility, now being built in the vicinity of 2820 N Normandy Dr Petersburg, VA 23805 (just south of the state capital Richmond). The facility is expected to be operational in early 2024. Civica also says that as a result of its partnership with GeneSys Biologics, it will have exclusive rights in the U.S. to market and sell these three insulin biosimilars at costs that will be substantially lower than what's currently available in the U.S. 











Based on the information in the press release, it appears the biosimilar insulin varieties that Civica Rx plans to market might actually be manufactured (cultured in bioreactors) in bulk offshore at GeneSys Biologics Pvt. Ltd. facilities in Hyderabad, India (located about 450 miles away from Mumbai). Hyderabad reportedly manufactures about one-third of India's bulk drugs. The actual GenSys Biologics manufacturing facility is located separately (the address can be found HERE) from the privately-held company's executive offices, but are still quite nearby.  Its unclear whether Civica Rx's Petersburg, Virginia factory will simply be a "fill & finish" facility whereby bulk drugs are packaged and labeled for sale to consumers, or whether there are longer-term plans to actually manufacture the insulin someday in Virginia with GenSys Biologics' assistance. That's what most biosimilars do so the margins are large enough to pay bribes to PBM's in the form of cash rebates to secure formulary placement. That not-so-little problem badly needs disruption.  

This much seems abundantly clear: U.S. insulin prices are badly distorted because of the PBM rebates needed to secure formulary placement. But if costs can bypass that mess, there is room for Civica's model to be successful. 

India-based Biocon recently announced plans to acquire its partner's half of its partnership with Viatris for $3.335 billion. Viatris has been under pressure from investors to shore-up the company's balance sheet and to start repaying some of its substantial debts. 

Kiran Mazumdar-Shaw, Biocon's executive chair said in an interview that Biocon Biologics' acquisition "Fills the gap in our missing capabilities in developed markets, especially around supply chain and commercialization". 

News outlets also reported that for the next two years, Viatris will continue providing commercial and other transition services before turning things over fully to Biocon. Rajiv Malik, president and CEO of Viatris, will also join Biocon Biologics' board. 

As noted, the two companies are already commercializing an FDA-designated "interchangeable" insulin biosimilar to Sanofi's Lantus (U-100 insulin glargine) branded as Semglee (the FDA designation as "interchangeable" is a meaningless distinction because PBM's routinely force patients to switch between non-interchangeable insulins regardless of whether they are designated as interchangeable or not). 

The "interchangeable" designation is relevant mainly to drug companies which want the ability for pharmacists to switch their products without the doctors' permission, but "therapeutically equivalent" non-interchangeable product switches by PBM's happen all the time (switching patients from Humalog to Novolog, for example because the PBM is paid a bigger rebate; the products are NOT the same), combined with a second, unbranded version called simply Viatris Insulin Glargine which avoids the costly rebate problem is the work-around. It does work and enables less-costly products to be sold in pharmacies with lower out-of-pocket costs. 

The Semglee/Glargine biosimilar products are manufactured in a massive factory Biocon set up that's located in Johor, Malaysia not far from the Singapore border. The dual branded/unbranded biosimilar strategy was developed largely thanks to Viatris ability to successfully navigate the peculiarities of the U.S. market for pharmaceuticals and the PBM rebate mess that now exists. Other biosimilar joint partnerships, such as Lannett Company, Inc. and China's HEC seem to be pursuing the same strategy as Biocon and Viatris followed using what they did as a guide for commercialization success. They use cheaper, offshore manufacturing to enable lower manufacturing costs to accommodate massive rebates needed to bribe PBM's to "prefer" their products over the innovators'. 

The two companies (Biocon and Viatris) already have a version of insulin aspart (innovator brand-name: Novolog) now proceeding through the FDA-approval process. In January 2022, the application received a complete response letter (CRL) from the FDA for the biologics license application (BLA) for Insulin Aspart which was filed by Viatris. 

The CRL on insulin aspart did not identify any outstanding scientific issues with the product, but Biocon did not provide any other specifics in its statement. The company said it intends to respond to the FDA’s requests but did not elaborate further. But in a follow-up to the announcement, CNBC reported that the CRL had to do with process data provided by the companies. In an interview with the news outlet, Kiran Mazumdar-Shaw of Biocon, said that the FDA informed the companies that its BLA was "incomplete". Exactly what made it incomplete was not disclosed. The insulin aspart product already sells in Europe under the brand-name Kirsty (it was previously branded as Kixelle). 

Beyond Kirsty, Biocon and Viatris also have a U-300 version of insulin glargine in development. Innovator Sanofi calls that insulin variety Toujeo which contains 3x as much insulin in each unit and that is also now working its way through FDA approval. That's slightly behind in development relative to insulin aspart (the Novolog biosimilar), but is expected to follow. Toujeo mainly targets the insulin-resistant Type 2 population, but is really little more than a much higher-concentration version of U-100 insulin glargine branded as Lantus. 

Meanwhile, the Biocon-manufactured insulin biosimilars now selling in the U.S. at different price-points in the U.S. thanks to the PBM-rebate mess. For example, while the list price for insulin glargine-yfgn (which is the generic drug name used for Biocon's Lantus copy) ranges from $62.19/vial at Rite-Aid pharmacies to $104.49/vial at Walgreens. But Walgreens is now promoting its own Walgreens Prescription Savings Club which it charges $20/year for individuals or $35 family each year, and under that program, is currently selling Viatris Insulin Glargine as a vial for $71.99 and a box of five pens for $84.99. The price for pens is good but its a rip-off for a vial of glargine insulin.

Walgreens Savings Club's prices on insulin pens, in particular, are quite competitive (but patients have to pay an annual fee to get the price). Patients can buy vials of glargine (or maybe Semglee?) for even less by using an InsideRx coupon and buying from Express Scripts Cash-Pay Mail Order Pharmacy by InsideRx for $67.94/vial. Note that Express Scripts only accepts e-scripts from cash-paying customers. 

For whatever reason, the prevailing insulin manufacturer mindset seems to be that glargine should mainly be sold in more costly insulin pens. For example, I think Lilly's Basaglar only comes in pens, not vials. Some may be as a way to avoid patient and doctor resistance among insulin-na├»ve Type 2 patients as pens are possibly viewed by manufacturers as being less threatening than vials and syringes, But the cost differential to patients is significant: insulin pens cost about one-third more money even though patients only use them once per day and do not need portability as they do with prandial insulin varieties. As a long-term T1D, I'm not really bothered by injections (I've been doing them for 46 years), and have found cheaper vials are an effective way to slash prices on insulin because you receive more insulin on a per-unit basis than you do with costly pens. 

But the Civica Rx announcement is the first of what will hopefully be several startups which aim to cut out the expensive PBM middlemen and slash patient out-of-pocket. It's possible that others, including the Mark Cuban CostPlus Drug Company could also pursue the same strategy of bypassing PBM's on insulin (maybe?) which increase (not decrease) costs for all involved. 

But the success of the Civica Rx insulin venture may determine if they decide copy other insulin varieties. 

While some are still patent protected, others like Sanofi's rapid-acting Apidra (U-100 insulin glulisine rDNA origin) could also be added if enough consumers buy Civica Glargine, Lispro and Aspart and whose patents have already expired.

Sanofi's Apidra is the last of the first three FDA-approved prandial insulin analogue varieties from the 1990's. I used it myself a number of years ago. In terms of speed, I found Apidra fell in between Humalog which is still fastest (even faster than Novo Nordisk Fiasp) but not quite as slow as Novolog or Fiasp are, which have much slower peaks of activity. But it was a competent rapid-acting analogue and some may find its time-activity profile works better for them than Humalog or Novolog (not certain how it compares to Lyumjev).

Today, hardly anyone in the U.S. uses Aprida these days because Sanofi was focused solely on selling Lantus and Sanofi salespeople never really talked to doctors about Apidra and many patients are unaware of its existence. 

I applaud Civica Rx's announcement. If its prices are what they promise, it will be less than my own co-pay now is, meaning it will still be a less costly option than the "preferred" formulary brand of my insurance company. That's a great disruption IMHO!

Author P.S., March 15, 2022: Since I originally published this post, on March 15, 2022, Scott Benner's Juicebox Podcast: Type 1 Diabetes interviewed JDRF CEO Aaron Kowalski about how the Civica Rx announcement came about, and some more details about that partnership. I particularly enjoyed the discussion Aaron Kowalski had about how he believed it was necessary for JDRF to actually manufacture insulin given that the market had proven impervious to efforts to market reforms to the Rx rebate-driven market dysfunction and the conversation he had about that with the JDRF Board. Listen to his podcast by visiting https://podcasts.apple.com/us/podcast/juicebox-podcast-type-1-diabetes/id962416631?i=1000554077747.

Author P.S., March 29, 2022:  On March 29, 2022, D-Mom and Podcaster Stacey Simms' podcast called Diabetes Connections also interviewed JDRF CEO Aaron Kowalski. Her questions were slightly different from those of Scott Benner, hence I recommend listening to her interview as well since it provides greater understanding of the Civica Rx insulin announcement and how that will actually work. Listen to that particular podcast by visiting https://diabetes-connections.com/i-think-we-have-an-answer-jdrfs-ceo-explains-the-plan-for-non-profit-insulin/.

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