Tuesday, July 25, 2023

Testimony from Actress Justine Bateman, JDRF's Aaron Turner-Phifer FTC Testimony and 2007 Express Scripts Study on Potential Savings of Biogenerics in the U.S.

Back in 2007, I blogged that the PBM Express Scripts (five years before that company acquired rival PBM Medco Health Solutions in 2012 before selling itself to the insurance company Cigna when it lost most of its paying clients in 2018) published a report on its forecast for savings which might come from biosimilar competition (see my original post at https://blog.sstrumello.com/2007/03/generic-biologics-could-save-71-billion.html for more). An archived copy of the old Express Scripts report is archived at http://web.archive.org/web/20100922170223/http://express-scripts.com/research/studies/pharmacybenefitresearch/specialtypharmacyservices/docs/potentialSavingsBiogenericsUS.pdf for the report) on the Potential Savings of Biogenerics in the United States, and in that report, the PBM estimated that out of an estimated total of $71 billion in savings for all drugs over 10 years that the Express Scripts report found, savings from biosimilar insulins in particular would save an estimated $797 million in the first year, and totaling in excess of $16 billion over 10 years.

The Express Scripts report itself does not acknowledge Sanofi Aventis' proprietary prandial insulin analogue branded as Apidra (insulin glulisine injection) whose patents expired in 2018 because Sanofi itself had long since abandoned sales efforts for that product to focus exclusively on selling the basal insulin Lantus whose patents expired in 2015. A few biosimilars of Lantus have already emerged, including one from Lilly branded as Basaglar which was approved by FDA as a "follow-on" biologic rather than a biosimilar, and then a newer, FDA-designated "interchangeable" version of glargine which is branded as Rezvoglar (insulin glargine-aglr), as well as another interchangeable version (the first) from Biocon branded as Semglee [insulin glargine-yfgn] (and a second identical unbranded version with a different NDC number which sold originally as Viatris Insulin Glargine Injection (insulin glargine-yfgn) with a 65% lower price-tag. About four other biosimilars are currently working their way through the FDA approval process from Civica/GeneSys Biologics, Lannett Company/HEC, Sandoz/Gan & Lee as well as Amphastar/ANP (Amphastar is perhaps better known as the company which acquired Lilly's proprietary inhalable glucagon rescue product branded as Baqsimi and it also sells a generic version of the old-school mix-and-inject glucagon emergency kit); although those are just the ones I actually know about. The other Lantus biosimilars are expected to pursue FDA-designated "interchangeable" status even though such a designation has always been irrelevant to PBMs which routinely non-medically switch patients from one non-interchangeable prandial insulin analogue to another without so much as coverage of additional testing supplies for patients to make the transition. Instead, the PBM's call them "therapeutically equivalent" based on whomever was paying them the biggest rebate kickbacks.

Because rebates paid by branded insulin manufacturers generated so many millions of dollars in cash for the PBM industry, they were no longer interested in potential savings which might be generated by lower-cost versions of those drugs; instead, they wanted to keep the PBM rebate gravy train running as long as possible. 

That's why the March 2023 announcements that Lilly https://www.prnewswire.com/news-releases/lilly-cuts-insulin-prices-by-70-and-caps-patient-insulin-out-of-pocket-costs-at-35-per-month-301758946.html, then Novo Nordisk https://www.prnewswire.com/news-releases/novo-nordisk-to-lower-us-prices-of-several-pre-filled-insulin-pens-and-vials-up-to-75-for-people-living-with-diabetes-in-january-2024-301771409.html followed by Sanofi https://www.globenewswire.com/en/news-release/2023/03/16/2629188/0/en/Press-Release-Sanofi-cuts-U-S-list-price-of-Lantus-its-most-prescribed-insulin-by-78-and-caps-out-of-pocket-Lantus-costs-at-35-for-all-patients-with-commercial-insurance.html all announced they would be slashing insulin prices, and to pay for those price-cuts, they would be disintermediating the PBM's from the transactions completely. That had to hurt the insurance company owned (or affiliated, in the case of Caremark, which is owned by CVS Health, who also owns Aetna) PBM's when those price cuts were announced.

Last week, when the FTC voted unanimously to withdraw (see https://www.ftc.gov/news-events/news/press-releases/2023/07/ftc-votes-issue-statement-withdrawing-prior-pharmacy-benefit-manager-advocacy for more) its previous support of PBM advocacy "cautioning against reliance on prior advocacy statements and studies related to pharmacy benefit managers (PBMs) that no longer reflect current market realities" and that the FTC currently has an ongoing study of the PBM industry to update its understanding of the industry and its practices to reflect current market realities.

The JDRF testified at that open FTC meeting, Aaron Turner-Phifer who (if you don't know him, is Director of Health Policy at JDRF) and he is based in Washington, DC. The video from the FTC meeting can be found (for the time-being, anyway) at https://www.ftc.gov/media/open-commission-meeting-july-20-2023 while a recording on Vimeo can be accessed directly at https://vimeo.com/847350258. Aaron Turner-Phifer's relevant testimony at the FTC July 20, 2023 Open Meeting began at 57:31. For convenience, I am also including the entire video below, followed by a transcript of Mr. Pfifer's testimony at the FTC Open Meeting below.

Transcript of FTC Testimony of Aaron Turner-Phifer, Director of Health Policy at JDRF at FTC July 20, 2023 Open Meeting:

"Thank you, Doug. Best for the last, huh? Kidding, joke. Thank you commissioners for the opportunity to comment today, and I appreciate the continued focus on the impact of drug crisis on consumers. I'm here today representing JDRF, the global leader in funding research for Type 1 diabetes or T1D. People with T1D must take insulin to live.

No one should suffer or die because they cannot afford their insulin. Unfortunately, this happens all too often. JDRF has long advocated for affordable insulin, urging manufacturers, health plans, employers, PBMs and policymakers to ensure that insulin is available at a low and predictable out-of-pocket cost. Our current system to access drugs via formularies, those managed by PBMs is structured so the only stakeholder exposed to the full list price of insulin is the person with diabetes.

The insulin rebate system generates savings for the [healthcare] system by unfairly requiring people with diabetes to shoulder the burden of higher prices due to the inelastic demands of their health. This inverts basic logic of our insurance system as we now have those with a chronic condition subsidizing those without. In recent months, leading insulin manufacturers have announced cost savings programs to lower the out-of-pocket costs for insured insulin users and reduced list prices for cash-paying users. While we welcome these programs and their potential to reduce costs, they're voluntarily run by manufacturers, meaning they could change and end with little notice. These programs themselves highlight the need for actions that provide long-term systemic solutions to the broken insulin market to ensure everyone has access to afforable insulin. The 1.4 million Americans living with T1D and the additional 6 million Americans with Type 2 diabetes who require insulin to live, have faced nearly 3 decades of exponential price increases in ballooning costs.

As long as the current rebate system managed by PBMs are allowed to continue, these millions of Americans will face an uncertain and insecure future.

We continue to support the FTC's ongoing work to curb these abuses and help ensure everyone has access to affordable and low-cost insulin."

In closing, the 2007 Express Scripts study suggested that savings would nevertheless be fairly substantial from biosimilar insulins, and there is no reason to presume those findings have changed. However, the PBM industry has since started singing a different tune. The savings to the healthcare system are still likely to come, but the only difference is that the PBM's won't be enjoying the savings, instead, let's hope that patients will! That would be a most appreciated role-reversal.

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