Five years ago, back on December 19, 2018, Swiss pharmaceutical giant Novartis Pharma AG quietly issued a press release (see https://www.globenewswire.com/news-release/2018/12/19/1669194/0/en/Sandoz-enters-into-commercialization-and-supply-agreement-for-insulin-biosimilars-anticipating-growing-demand-as-diabetes-burden-rises.html for the release itself) on behalf of the company's business unit known as Sandoz. Specifically, Novartis said that its Sandoz generics unit planned to introduce biosimilars, or near-copy, versions of Sanofi's Lantus (glargine), Novo Nordisk's Novolog (aspart), and Eli Lilly's Humalog (lispro). Sandoz intended to handle commercializing biosimilar, or near-copy, versions of those insulins around the world, while Gan & Lee would develop and manufacture them. The reason Sandoz cited in its press release for partnering with Gan & Lee was revealed:
"Gan & Lee is 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."
At the time, I presumed the reason Sandoz was opting for an offshore partner to manufacture insulin on its behalf (because Sandoz certainly could have done so itself) was so that Sandoz could pay multimillion dollar, legally-exempted rebate kickbacks to Pharmacy Benefit Manager ("PBM") formulary managers. For example, we already have seen Biocon (initially via its co-development partner Viatris) was targeting both the PBM market for insulin with a branded biosimilar of Lantus known as Semglee, as well as the patient market with a cheaper, unbranded (sold under the generic drug name).
Then, patients heard nothing more about Sandoz insulin biosimilars until Novartis revealed casually on page 21 of its 64-page second quarter & half-year 2022 financial statement released on July 20, 2022 (catch most post on that at https://blog.sstrumello.com/2022/07/novartis-sandoz-is-back-in-insulin.html for details) that the Gan & Lee-manufactured biosimilar insulins were indeed still in development and may have been further along in development than investors realized.
In fact, Novartis resulted from the merger of Sandoz and Ciba-Geigy in 1996, although it wasn't until 2003 when Novartis decided to unite its global generics businesses under a single global brand, and opted to use name Sandoz for that.
However, shareholders (primarily institutional investors, including many based in the U.S., such as big mutual fund companies) felt that Novartis needed to rid itself of Sandoz because it was a slow-growth business comprised mainly of lower-margin products, and they wanted the company to sharpen its focus on its patented prescription medicines. They had hoped Novartis could quickly sell the Sandoz business, but it was too big to find a buyer. On August 25, 2022, Novartis finally did what investors wanted, agreeing in August 2022 to spin Sandoz off as a stand-alone, independent business (catch my coverage of that at https://blog.sstrumello.com/2022/08/novartis-to-spin-off-sandoz-as-stand.html for more).
Swiss and U.S. securities laws meant that the Sandoz spin-off process would take some time, and the company was expected to be headquartered in Switzerland and would be listed on the SIX Swiss Exchange, with an American Depository Receipt program in the U.S.
The Sandoz spin-off was expected to be completed in the second half of 2023 (forecast for August 2023) according to the company, subject to market conditions, tax rulings and opinions, final board endorsement and shareholder approvals, Novartis said.
Anyway, earlier this year, we saw Sandoz' Chinese partner Gan & Lee make concrete steps towards securing FDA approvals for its biosimilar copies of Sanofi Lantus (glargine), Lilly Humalog (lispro) and Novo Nordisk Novolog (aspart). On February 23, 2023, Gan & Lee proudly announced that it had become the first-ever China-based company (see https://www.ganlee.com/detail/683.html for the news) to have the U.S. Food and Drug Administration formally accept its submission of Biologics License Application ("BLA") of insulin glargine injection. Then, on June 1, 2023, Gan & Lee announced that FDA had formally accepted the company's BLA application for a biosimilar of insulin lispro (see https://www.ganlee.com/detail/690.html for more), followed by another announcement made on June 14, 2023 that FDA accepted its BLA for biosimilar insulin aspart (see https://www.ganlee.com/detail/691.html for the announcement). I suspect that Sandoz helped guide the company through the FDA application process for the first BLA, but Gan & Lee learned what FDA would be looking for with that application, and was prepared to address questions ahead of its applications for lispro and aspart.
In other words, Sandoz/Gan & Lee now formally has BLA's on file with FDA for biosimilars for Lantus, Humalog and Novolog. FDA data indicates that it typically takes about 11 months for a biologics license application to go from application to approval (or denial). My expectation is we can anticipate seeing the copy of Lantus in early 2024, followed a few months later by copies of Humalog and Novolog. I'm guessing here since no formal announcement was made, but those are likely to be sold in Ypsomed UnoPens because rivals including Civica and Lannett have each licensed the Swiss company's disposable insulin pens, and we could see Sandoz do the same.
Of course, the market dynamics have changed considerably since late 2018. On March 1, 2023 Lilly, then on March 14, 2023 Novo Nordisk and on March 16, 2024 Sanofi each announced major list price cuts for their branded and unbranded insulins, and to pay for those price-cuts, they would simply disintermediate the PBMs' from the transctions, and voila: the price cuts could happen without any entity other than the PBMs being harmed financially.
Still, we are finally seeing evidence that the FDA's move to formally reclassify insulin as a biologic (see https://diabetes.org/blog/insulin-now-biologic-what-does-mean and https://www.prnewswire.com/news-releases/fda-works-to-ensure-smooth-regulatory-transition-of-insulin-and-other-biological-products-301008489.html for more background info) has helped the advent of biosimilars to come to market. The ADA's write-up was most succinct: "Because the original 'brand' insulins on the market now were not approved through the biologic path at FDA — they went through the drug path. As a result, companies could not introduce biosimilar or interchangeable versions." When FDA formally reclassified insulins as biologics, the regulatory pathway for biosimilars was open.
While every company is targeting biosimilars of Lantus because it was the single bestselling insulin on the market, followed by Novolog, there are fewer Humalog copies expected to hit the market. Sandoz/Gan & Lee appear poised to be one of the first (beyond Sanofi's copy of Humalog branded as Admelog). Of course, the prices of both the "authorized generic" made by Lilly have been $35/vial since 2021 (see https://www.prnewswire.com/news-releases/lilly-again-reduces-list-price-of-insulin-lispro-injection-as-latest-change-to-affordability-options-301386117.html for more), and its non-branded insulin, Lilly Insulin Lispro Injection 100 units/mL is now being repriced to just $25/vial, while branded Humalog price cuts are planned for Q4 2023.
Kaiser Family Foundation wrote an article entitled "Eli Lilly Slashed Insulin Prices. This Starts a Race to the Bottom." (see https://kffhealthnews.org/news/article/eli-lilly-slashed-insulin-prices-this-starts-a-race-to-the-bottom/ for the article).
Perhaps.
But just remember: Sandoz is making the insulin offshore in China by Gan & Lee, so as biosimilars, its possible they can be (and likely should be) priced even lower than the branded insulins. Recall that I looked up Gan & Lee's 2022 annual report (see https://blog.sstrumello.com/2023/05/info-on-what-it-costs-to-make-insulin.html for details) and the Cost of Goods Sold [COGS] Sandoz originally boasted about in 2018 was reported last year as 60.00 in Chinese Yuan for prandial insulin analogues, which converted to U.S. Dollars equals $8.68 per vial as of just a few weeks ago.
All I can say is: it's about time.
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