FDA Approves Second Generic GLP-1 Inhibitor; Prices Expected to Drop Further

On December 23, 2024, the FDA approved the first true generic copy of the GLP-1 inhibitor liraglutide (see the FDA press release at https://www.fda.gov/news-events/press-announcements/fda-approves-first-generic-once-daily-glp-1-injection-lower-blood-sugar-patients-type-2-diabetes for details), which will be commercialized by Hikma Pharmaceuticals USA. This version of the drug, prescribed for Type 2 diabetes and branded as Victoza by Novo Nordisk, marks a significant milestone. Generic copies of the weight-loss version, which was branded by Novo Nordisk as Saxenda, is also expected to come to market in the future. That's where the real money is. But the FDA prioritizes the review of generic versions of drug classes in shortage, such as GLP-1 inhibitors, which have become very popular for weight-loss.

Hikma's generic version of liraglutide will be the second copy of Victoza/Saxenda on the U.S. market. Teva Pharmaceuticals introduced the first version on June 24, 2024, but it was an "authorized generic" rather than a true generic (see the press release https://www.businesswire.com/news/home/20240623654311/en/Teva-Announces-Launch-of-Authorized-Generic-of-Victoza%C2%AE-liraglutide-injection-1.8mg-in-the-United-States for more). Authorized generics are identical to branded drugs but sold under the generic name with the brand company's permission, while true generics are made without the brand drug company's permission. Teva's version of liraglutide uses Novo Nordisk's proprietary FlexPen devices, whereas Hikma's version will be the first true generic copy. Other companies, including Biocon, Amphastar Pharmaceuticals, Lannett Company, and Sandoz, are all expected to introduce their versions of liraglutide very soon. Some, such as Sandoz, are also likely to have other versions of patent-expired GLP-1s, such as Lilly's Trulicity (known generically as dulaglutide, but that never had a weight-loss version) as well.

Academic research has shown that GLP-1 inhibitor prescription growth is driven by demand for weight-loss drugs rather than Type 2 diabetes treatment (catch my coverage at https://blog.sstrumello.com/2024/08/glp-1-inhibitor-demand-shows-strong.html). Many people use the diabetes versions to lose weight due to shortages of obesity versions, but make no mistake: virtually all of the demand for GLP-1s is from people without Type 2 diabetes who want drugs to help them lose weight.

Much of this demand can be attributed to questionable telehealth providers who prescribe branded GLP-1 inhibitors without even patient examinations. A STAT examination found that a small number of doctors, nurse practitioners, and physician assistants write almost all of the prescriptions for the numerous websites offering weight-loss drugs (again, see https://www.statnews.com/2024/10/17/telehealth-online-compounded-glp1-prescriptions-medical-groups/).

Novo Nordisk aims to make its overpriced new GLP-1 inhibitor semaglutide (Ozempic for T2D, Wegovy for obesity) the only such drug available. Importantly, telehealth firms rarely ever prescribe cheaper, patent-expired GLP-1 inhibitors like liraglutide, focusing only on the newest, most expensive versions. Preliminary research also suggests Teva's liraglutide offers only a 17% discount compared to branded Ozempic/Wegovy which is miserly savings.

The FDA's research shows that greater generic competition leads to lower drug prices. A September 2024 report estimated that the 742 generic drug applications approved in 2022 yielded $18.9 billion in savings, with $5.2 billion from first generic approvals (see the report at https://www.fda.gov/about-fda/center-drug-evaluation-and-research-cder/generic-competition-and-drug-prices?form=MG0AV3). Importantly, the research proves that more competition from generics will continue to drive prices down further, benefiting consumers. FDA's studies also consistently show that more competition from generic drugs leads to even lower drug prices, meaning the more generic competition which emerge, the lower the average price patients end up paying. The following image depicts how prices fall with each new generic competitor on the market. It visually shows how much prices fall with each additional, new generic hits the market.

Key Points:

• More Generic Competition Incoming: Hikma's version is the first true generic, while Teva's June 2024 launch was an "authorized generic" packaged in Novo Nordisk's pen devices. Biocon, Amphastar, Lannett, and Sandoz are also developing generics. Sandoz is forecasting that generic GLP-1s will generate 69% of the company's revenues by 2029.
  
  
• FTC Helped Expedite Competition: The FTC challenged Novo Nordisk's illegal attempt to preclude generic competition by illegally listing patents on pen injector devices. The FTC's dispute of those wrongful Orange Book patent listings allows for faster generic development. For more details, see my coverage https://www.linkedin.com/pulse/ftc-challenge-pharmas-improper-fda-orange-book-patent-scott-strumello-h6ede/ and/or https://blog.sstrumello.com/2024/04/ftc-again-polices-fdas-laziness-with.html (they are the same article).
  
  
• GLP-1 Inhibitor Demand Driven by Weight-Loss, Not Type 2 Diabetes: Research shows most prescriptions come from telehealth providers for weight loss, not from diabetologists for blood sugar control (see https://www.statnews.com/2024/10/17/telehealth-online-compounded-glp1-prescriptions-medical-groups/ for reference).
  
  
• Telehealth Focuses on Expensive, Branded Drugs: But telehealth providers usually only prescribe the newest, most expensive GLP-1 inhibitors like Ozempic/Wegovy (semaglutide) and avoid cheaper generics like liraglutide.
  
  
• Generic Competition Lowers Prices: FDA studies show increased generic competition leads to substantial drug price reductions. A September FDA 2024 report (see https://www.fda.gov/about-fda/center-drug-evaluation-and-research-cder/generic-competition-and-drug-prices?form=MG0AV3) estimated $18.9 billion in savings from 2022 generic approvals. 

Novo Nordisk's thinly-veiled efforts to maintain sky-high prices on its GLP-1s by paying PBMs legally-exempted rebate kickbacks prevent all competing drugs in the same drug class from receiving insurance company formulary placement (including first-generation GLP-1 inhibitors like liraglutide) may run afoul of the FTC litigation against the PBMs on insulin (catch my coverage on that at https://blog.sstrumello.com/2024/09/the-ftc-sues-big-3-pbms-and-pharma.html for more, and also see https://www.ftc.gov/news-events/news/press-releases/2022/06/ftc-ramp-up-enforcement-against-illegal-rebate-schemes/ for more about how pharma may not be exempt even though FTC was focused on PBM behavior). FTC has not (yet) sued any drug companies for these rebating practices, but it has threatened that it could because it is anticompetitive behavior. Of course, most people using the weight-loss versions of the GLP-1 inhibitor drugs are paying cash because insurance won't cover drugs prescribed for cosmetic purposes. But the FDA's approval of Hikma Pharmaceuticals' liraglutide is just the beginning of increased competition that will make these medications far more affordable and accessible.