The Business Case for a Biosimilar Company to Bring a Copy of Levemir to Market

My readers may recall that in November 2023, I blogged that Novo Nordisk announced it plans to retire (stop making) its first "Lantus killer" known as Levemir (insulin detemir injection) in the U.S. in 2024 (catch my post at https://blog.sstrumello.com/2023/11/novo-nordisk-to-discontinue-levemir-in.html for more). At the time I learned of the announcement, I was on vacation in Amsterdam, so I just made a note of the development and blogged about it a few weeks later upon my return.

Like other patients my age, I have endured the company's previous insulin "retirements". Novo Nordisk's time-frame for withdrawing this particular insulin from the market is happening unacceptably fast. For example, the company said that Levemir FlexPens were expected to be unavailable by mid-January 2024 — a matter of weeks following the announcement. Exactly why anyone without a visual impairment needs an expensive insulin pen injection device (pens were devised for dosing prandial insulin on-the-run, not for daily-dosed basal insulin) for a basal insulin which only needs to be dosed once per day is unclear to me (I suspect the real reason manufacturers even sell insulin pens for basal insulins is because pharma aims to make insulin injections less threatening for insulin-naive Type 2 patients), but compared to Novo Nordisk's prior insulin retirements (for example, when it stopped making the entire Lente series consisting of Semilente, Lente and Ultralente) which were announced about three years before they actually stopped selling those products, they are pulling the plug on Levemir in less than a year.

Why the big rush?

The company cited "manufacturing constraints, reduced patient access and available alternatives" as the reasons it had decided to stop making and selling Levemir. In reality, there was only a shred of truth to any of the reasons the company cited (specifically, the one about manufacturing constraints, because Novo Nordisk really wants to deploy its internal manufacturing capacity to produce weight-loss GLP-1 inhibitor drugs for obesity without Type 2 diabetes which it can sell at a premium price instead of making insulin which has become commoditized where lowest prices wins sales). 

Nevertheless, we should all be upset that the arrogant Danish company is prioritizing profits in order to sell a product GLP-1 inhibitor product which is not even a WHO-designated "essential medicine" as insulin is in order to sell a drug for people without diabetes to lose unwanted pounds/kilograms. The only motive is profit. In reality, as a pharmaceutical company, Novo Nordisk could easily quadruple its manufacturing capacity instantly by using one or more contract manufacturers, so no pharmaceutical company has a capacity constraint to speak of.

The more plausible explanation for its haste to stop making Levemir is that a) Levemir lost all U.S. patent exclusivity in April 2021, and b) not coincidentally, in March 2023, Novo Nordisk also announced that it would cut the price of Levemir by about 65%, effective January 2024. Then, just weeks before the new Levemir price cuts were to take effect, the company just decided to stop making Levemir instead. That is shameful corporate behavior IMHO.

We do know that there are already laboratory companies based outside the United States already making biosimilars of Levemir right now. That means biosimilars of the product are a viable option.

For example, China's Hangzhou Jiuyuan Gene Engineering Co. Ltd. is already selling the Active Pharmaceutical Ingredient (API) in bulk for Levemir right now (see the link for the manufacturers' insulin detemir API at https://www.jiuyuangene.net/ap/recombinant-diabetes-api/insulin-detemir-diabetes-diabetes-bulk-cas-no.html for more). It happens to sell them in bigger-sized 3 mL vials (most insulin patients buy insulin sold in 1 mL vials). All it would take to sell a copy in the U.S. is for a company operating in the U.S. market to sign a supply agreement with Hangzhou Jiuyuan Gene Engineering and then conduct some small clinical trials for the FDA in order to prove that the insulin is bioequivalent to actual Novo Nordisk Levemir. No one is saying it would not cost anything. But the REAL REASON that Novo Nordisk is discontinuing Levemir so fast is it does not want any other company to make and sell patent-expired insulin detemir. By discontinuing it so fast, it intends to force patients to switch to another basal insulin instead, and with any luck, that would be Novo Nordisk's patent-protected basal insulin called Tresiba.

In my lifetime with autoimmune Type 1 diabetes, Novo Nordisk has habitually discontinued insulin products and effectively tried to force patients to "upgrade" to its newest, still patent-protected products. However, in those days, biosimilars were not a viable option. But I never did what Novo Nordisk wanted me as a patient to do. Instead, I just started using the same product made by a different maunfacturer (Eli Lilly & Company).  Tresiba (insulin degludec injection) was Novo Nordisk's second attempt to sell a "Lantus killer" since Levemir was never really as successful as Sanofi's Lantus was in the basal insulin space (that's because Novo Nordisk was more than five years late to market with Levemir).

Novo Nordisk also happens to be a notorious "patent troll" whereby the company takes out numerous U.S. patents (many not even backed by actual science, but for ideas the company has) for "intellectual property" and then uses its vast army of lawyers on-staff (and on retainer) to sue any other company over supposed patent infringements. In my view, if Novo Nordisk chooses to withdraw Levemir, then it should also forfeit the rights to any intellectual property associated with the product. It is incumbent on our lawmakers to ensure any company that aims to bring a biosimilar of the product to market will not be sued by Novo Nordisk for patent infringement.

U.S. taxpayers have the right already enshrined in law to ensure that happens. The 1980 Bayh–Dole Act (known officially as the Patent and Trademark Law Amendments Act of 1980) enables any company which receives the benefit of U.S. taxpayer dollars to help commercialize a pharmaceutical or biologic to market (and Novo Nordisk deducted certain business expenses from its U.S. tax liabilities when it brought Levemir to market, hence it did so), then the U.S. could theoretically use what are referred to under Bayh–Dole as "march-in rights" to the intellectual property associated with the drug or biologic which our tax dollars already helped pay for. 

Since the Bayh–Dole Act became law in 1980, however, the U.S. has never once used "march-in rights". But lawmakers including former House Speaker Nancy Pelosi and President Joe Biden have threatened to do so. That prospect of lawmakers using "march-in rights" scares the crap out of the pharmaceutical industry. 

Right now, the pharmaceutical industry trade group known as PhRMA is making ominous but unfounded threats about using "march-in rights". But it is not abuse; rather the law has always said that if pharma takes taxpayer dollars, the government reserves the right to reclaim patent exclusivity on those products. PhRMA's CEO Steve Ubl has been making repeated warnings on social media about "march-in rights" (on December 13, 2023, he Tweeted that using march-in rights would be a huge loss for innovation and for patients). Don't believe his hyperbolic threats; they are bull$#!t.

Insulin Detemir (Levemir) Is Viable for Biosimilars

Some believe that Levemir is too small and insignificant for any company to even bring a biosimilar of that product to market. The reason is because right now, only the three bestselling insulins have any pending biosimilars with the most being for Lantus copies.

But it's hardly the case that Levemir is too small or insignificant to warrant any biosimilar copies.

We know, for example, according to the diaTribe Foundation (via data derived from the company which started the diaTribe Foundation, a firm which makes it money by consulting on behalf of businesses operating [in or interested in] pursuing business in the diabetes space known as Close Concerns) that "Levemir generated $649 million in revenue in 2022" (see https://diatribe.org/levemir-long-acting-insulin-be-discontinued-novo-nordisk for diaTribe's coverage of the Levemir "retirement").

In terms of how many patients use Levemir, according to data derived from the U.S. Government's MEPS prescribed medicines database (see https://www.ahrq.gov/data/meps.html from the U.S. Agency for Healthcare Research and Quality for access), that as of 2021, Levemir ranked as the 117th bestselling drug in the United States (see a more conveniently-organized list of the 200 bestselling drugs in the U.S. at https://clincalc.com/DrugStats/ for data and search under "insulin detemir" to quickly find the Levemir data; the tool is used by professors to help pharmacy technicians to memorize the bestselling prescription drugs) with a total of 5,214,067 U.S. prescriptions for insulin detemir were filled in 2021, serving 1,027,442 individual patients as of 2021. Also, Levemir's sales rank among the bestselling drugs sold in the U.S. had increased 7 places compared to the preceding year (2020). 

So don't believe the bull$#!t about Levemir being a small, dying product. 

That is hyperbolic nonsense that Novo Nordisk is claiming in order to persuade everyone that its product withdrawal was perfectly legitimate (which it is not).

With that said, while I believe it's entirely feasible to bring a biosimilar of Levemir to market, doing so will likely require about 4 years which explains why Novo Nordisk hopes to stop selling it in a matter of months. Unless they use an insulin pump with prandial insulin-only programmed to deliver small amounts of prandial insulin regularly as their "basal" rate. Novo Nordisk is HOPING that patients who use Levemir will simply switch to Tresiba instead.

But one of the very reasons Novo Nordisk is discontinuing Levemir so fast could also help make to biosimilars of Levemir an even more attractive business opportunity.

This part is a little confusing for people who don't follow the intricacies of how pharmaceuticals are commercialized, so please bear with my explanation.

Pembroke Consulting and Drug Channels Institute President Adam J. Fein reported about insulin "For 2021, average rebates and discounts for insulin were about $5,400 per-patient annually, while net drug costs were less than $1,100." 

In other words, the dollars generated by legally-exempted rebate kickbacks paid by insulin-makers to PBMs in order to secure formulary placement exceeded the cost of insulin itself by a substantial margin. It was the PBMs who were to blame for runaway insulin prices. This has been validated by peer-reviewed academic research undertaken by the University of Southern California as well as a study undertaken by the U.S. Senate Finance Committee. 

It is hardly a secret anymore.

Big PBMs' Incoherent Strategies in Response to Lilly, Novo Nordisk and Sanofi Price Cuts

Adam Fein subsequently acknowledged that Lilly, followed by Novo Nordisk and Sanofi and their collective insulin price cut decisions which were announced in March 2023 will soon mean that health plans will no longer be able to subsidize premiums using money derived from insulin rebates, and he also acknowledges that PBMs also will no longer be able to earn fees based on insulin list prices. No one should (except maybe the insurance-company owned PBMs) be crying over their losses. Besides, as I've written about previously, they've already moved on to rebate aggregation on continuous glucose monitors (CGMs) instead anyway.

The March 2023 announcements of insulin list price cuts bankrolled by disintermediating the PBMs was the first positive direction we have seen on insulin prices in years. But even Adam Fein observes there's more at work (see https://www.drugchannels.net/2023/03/drug-channels-news-roundup-march-2023.html for more) before we see growth in biosimilars. 

Adam Fein opines that (see https://www.drugchannels.net/2024/01/the-big-three-pbms-2024-formulary.html for his observations) "The simultaneous list price reductions [on insulin] have limited (but not eliminated) PBMs' ability to block lower list price products. The cuts also popped the gross-to-net bubble for insulin, which gave PBMs little choice but to cover the lower priced products." But, he cited the three largest PBMs' divergent approaches to insulin market developments. 

One thing he acknowledges is the genuine impact of the American Rescue Plan Act of 2021 which capped Medicaid rebates at 100% of the Average Manufacturer Price (AMP). Adam Fein expanded on that slightly by saying: "Medicaid rebates are linked to the bogus list price, which has been inflated by the gross-to-net bubble. The 100% cap on Medicaid rebates ends next year [in 2024], which means that some companies with high-list/high-rebate products [such as insulin] may have to pay Medicaid to use their products, i.e., negative prices. Anti-pharma zealots complain that insulin manufacturers are somehow 'avoiding' Medicaid rebates. In reality, the manufacturers are rationally responding to Congressional incentives that encourage drugmakers to avoid having to pay the government for the use of their products."

OK. I also agree with his assessment that this was not really due to any grand strategic plan from lawmakers in Congress. It basically happened by accident, combined with a boatload of biosimilars pending FDA approval right now.

Shortly after Lilly, Novo Nordisk and Sanofi cut insulin prices by disintermediating the PBMs from the sale (hence it cost the manufacturers no money to slash their insulin prices), Adam Fein wrote (see https://www.drugchannels.net/2023/03/drug-channels-news-roundup-march-2023.html for his article) "The simultaneous list price reductions also limit PBMs' ability to block the lower list price products (as they did with Semglee, the interchangeable biosimilar of Lantus)."

But, he subsequently observed in January 2024 of diverging PBM strategies from United Healthcare's OptumRx, Cigna's Express Scripts and Aetna/CVS Health/Caremark (see https://www.drugchannels.net/2024/01/the-big-three-pbms-2024-formulary.html for details).

Below were his observations (with a few tiny edits on my part):

• [United Healthcare's] OptumRx has placed all insulin products at parity the first formulary tier, which has the lowest out-of-pocket costs for patients. (Great move, IMHO.) All products on this tier have same copayment or the same coinsurance rate. However, a patient’s actual out-of-pocket costs will vary for benefit designs with coinsurance, because the list prices vary among the products.
  
  OptumRx's formulary includes both Lilly's Humalog product as well as the unbranded version. OptumRx placed the brand-name Lantus product and the Rezvoglar biosimilar on tier 1, while the Semglee biosimilar has been excluded from the formulary.
  
  
• [Cigna's] Express Scripts' biggest formulary includes the brand-name Humalog along with the lower list price insulin lispro. Its formulary also includes the basal insulin Semglee, the high-list-price interchangeable biosimilar of Lantus, but excludes the identical unbranded, low-list-price unbranded insulin glargine-yfgn product as well as the Lilly Rezvoglar biosimilar. Express Scripts didn't reply to his request for a comment on its love of higher list prices.
  
  
• CVS Caremark's [of which, the insurance company Aetna is also a part] formulary includes brand-name versions of Novolog, and excludes Humalog and Apridra. It includes Lantus and excludes the follow-on biologic Basaglar. However, it doesn’t mention Semglee, unbranded Semglee, or Rezvoglar.

His article acknowledge "Insulin exclusions vary among the PBMs. Biosimilar insulins still face challenges."

All of that suggests that big PBMs aren't really clear yet on how they intend to handle biosimilars and their strategies are, putting it kindly, incoherent. But since big insulin no longer pays multi-million dollar rebate kickbacks to PBMs, and so far, they do not appear to have figured out a coherent way of managing that. He seems to believe that United Healthcare's OptumRx is likely the most coherent strategy (he commented: "Great move IMHO"), but the reality is that until we have more than a dozen biosimilars on the market, and patients will be free to buy less costly insulins (including varieties which are not "preferred" by their insurance company's PBMs) with cash, we won't yet see what happens.

But, in 2024, we will have a bunch of Lantus, followed by nearly as many Novolog biosimilars, with a smaller number of Humalog biosimilars. If I had to guess, I'd say that we should expect Novo Nordisk to stop making Novolog soon, too, only there are already a number of biosimilars for that already pending approval decisions. One reason there are only a few Humalog biosimilars pending approval (three in total, although the third won't come for another 5 years, along with the Admelog biosimilar manufactured and sold by Sanofi) is because when Lilly learned that more than one-third of domestic Humalog sales was the unbranded, unrebated (to PBMs) version, it decided to cut prices on unbranded Humalog even further. Consequently, Lilly's Humalog prices are really cheap at $35/vial right now. Biosimilars aren't sure they can beat Lilly's prices (rest assured, they most certainly CAN, catch my post HERE which shows the cost for them to make a vial of insulin lispro in China is $8.68 per vial).

Which brings me to the business case for Levemir biosimilars.

The reality is that biosimilars of that product won't possibly have a chance to hit the market before Novo Nordisk stops making the product (which is why Novo Nordisk is discontinuing Levemir so quickly). That will force patients and doctors to find alternatives. But it won't guarantee that those patients will automatically switch to Tresiba, especially if they have a choice of a 8 or 9 glargine biosimilars to choose from at prices even lower than $35/vial. 

CVS, for example, has a business unit called Cordavis which will sell biosimilars (it will start with a Humira biosimilar), and presumably that could also include insulin biosimilars at CVS for low cash prices. We shall see on Cordavis; its Humira biosimilar will likely be more expensive than one sold by Mark Cuban Cost Plus Drug Company, so its unclear what will happen when there are lower-cost choices on insulins, but I'd bet we'll see many of them sold under the pharmacy's brand as private-label insulins.

But the prospect of a different basal insulin biosimilar of Levemir might be unique enough to be able a manufacturer to capture sales (and at a slightly better price) simply because it is different. Hence, the very market forces which Novo Nordisk was hoping will force patients use its Tresiba might actually HELP biosimilars of Levemir to differentiate themselves on the market.

Watch this space!