www.biopharmadive.com Open in urlscan Pro
2606:4700:4400::6812:2a20  Public Scan

Form analysis
0 forms found in the DOM

Text Content

Skip to main content
 * post
 * share
 * post
 * email

   
 * Reading Now Biosimilars are gaining ground. The IRA could push them further
   next year. By: Amy Baxter
 * Reading Now Drug patents protect pharma profits. Track when they’ll expire.
   By: Jonathan Gardner
 * Reading Now Biosimilars have revolutionized disease management; the right
   data can improve adoption By: PurpleLab
 * Reading Now Boehringer cuts price of Humira biosimilar in bid to build use
   By: Jonathan Gardner
 * Reading Now Doctors largely comfortable with biosimilar drugs, but question
   economics By: Jonathan Gardner
 * Reading Now PBMs battle bipartisan scrutiny as lawmakers eye reforms By:
   Susanna Vogel, Rebecca Pifer
 * Reading Now Cigna CEO promises ‘aggressive’ defense of pharmacy benefit
   managers By: Rebecca Pifer
 * Reading Now CVS launches new venture in biosimilar drug experiment By:
   Jonathan Gardner



Trendline


BIOSIMILARS


Roche

NOTE FROM THE EDITOR

Humira, the arthritis treatment that for years ranked as the pharmaceutical
industry’s top-selling drug, has faced copycat competiton in the U.S. for nearly
two years now.

The 2023 arrival of biosimilar rivals to Humira has tested for the therapy’s
maker, AbbVie, and the broader idea that lookalike biologic medicines can play a
similar role as generic pills in lowering prescription drug costs.

While nearly 60 biosimilars are approved in the U.S., their overall impact has
been modest, limited by patent thickets that have blocked sales and insurance
contracting that can advantage brand-name incumbents. For doctors, the economics
of prescribing don’t always favor biosimilars, either. 

Humira biosimilars, despite being long awaited, have run into similar
challenges. While AbbVie sales of Humira declined this year, most of the impact
appears related to rebating that’s lowered Humira’s price. Sales of rival
copycats have been slow. 

Still, there are some signs biosimilars are gathering momentum. The combined
market share of biosimilars to the Roche cancer medicines Herceptin and Avastin
has eclipsed 80% in the years following the first launch of a lower-cost
version. Biosimilars of Rituxan, another formerly top-selling Roche cancer drug,
hold a similarly large market share in the U.S.

The pharma industry will be keeping close track as other companies have looming
“patent cliffs” for their biologic top-sellers, like Johnson & Johnson’s
Stelara, Merck & Co.’s Keytruda and Regeneron’s Eylea.

Read on for a closer look at the market for biosimilars in the U.S.

Ned Pagliarulo Lead Editor
 * Reading Now Biosimilars are gaining ground. The IRA could push them further
   next year. By: Amy Baxter
   
 * Reading Now Drug patents protect pharma profits. Track when they’ll expire.
   By: Jonathan Gardner
   
 * Sponsored Biosimilars have revolutionized disease management; the right data
   can improve adoption Sponsored content by PurpleLab
   
 * Reading Now Boehringer cuts price of Humira biosimilar in bid to build use
   By: Jonathan Gardner
   
 * Reading Now Doctors largely comfortable with biosimilar drugs, but question
   economics By: Jonathan Gardner
   
 * Reading Now PBMs battle bipartisan scrutiny as lawmakers eye reforms By:
   Susanna Vogel, Rebecca Pifer
   
 * Reading Now Cigna CEO promises ‘aggressive’ defense of pharmacy benefit
   managers By: Rebecca Pifer
   
 * Reading Now CVS launches new venture in biosimilar drug experiment By:
   Jonathan Gardner
   




BIOSIMILARS ARE GAINING GROUND. THE IRA COULD PUSH THEM FURTHER NEXT YEAR.

As commercial momentum builds, coverage incentives for the Medicare market are
expected to favor biosimilars in 2025.

By: Amy Baxter • Published May 13, 2024

When biosimilar copies of AbbVie’s top-selling drug Humira arrived in 2023, the
impact was hard to see. Now, that’s beginning to change as a few lower-cost
versions gain ground.

Those inroads could be amplified by the Inflation Reduction Act, which may help
boost the impact of biosimilar medicines on branded drugs.

Researchers at Harvard University examined the likely impact of the IRA on
biosimilar coverage in Medicare and, in a new study, predicted that in 2025 the
law will shift coverage from brand-name biologics to cheaper versions. Their
findings come as other reports indicate biosimilars are finding their footing in
the commercial market.


BIOSIMILAR BARRIERS

At the end of 2023, Humira biosimilars still had a minimal presence, earning low
sales numbers and negligible market share in the he U.S. Humira biosimilar
market share only reached 4% as of February 2024, according to a report from
Samsung Bioepis, the maker of one of those Humira copycats. But after CVS Health
made the decision to drop Humira from its formulary this year, biosimilar
prescriptions are picking up.

The market penetration of biosimilars has been better in the commercial space
than for Medicare and other government plans, said Luca Maini, one of the
authors of the study and an assistant professor of health care policy at Harvard
Medical School.

“[There’s] a little bit of a learning curve,” he said. “Physicians, patients and
PBMs, and all the stakeholders, need to be comfortable with the idea that
biosimilars … are just as safe and effective as originator biologics.”

Physicians have been reluctant to swap out brand-name biologics like Humira for
biosimilars in the first few years of availability, according to a 2023 report
by Spherix Global Insights.

Reimbursement design for Medicare has been another barrier that benefited
biologics over biosimilars until 2022 when one of the first IRA provisions
kicked in. The Medicare Part B changes increased biosimilar reimbursement rates,
encouraging more competition with originator biologics.

Biologics are generally more intensive for patients compared to small molecule
drugs, according to Maini, who said these drugs are likely administered in a
physicians’ office or require training by a healthcare professional before they
can be administered at home.

“It’s a lot harder for a biosimilar to immediately grab a large share of the
market upon approval,” Maini said.

However, biosimilars are still making an impact, if AbbVie’s latest earnings are
any indication. While still holding on to the majority of market share for
Humira, AbbVie’s revenue declined at the start of the year, and that could lead
the pharma to cut Humira’s prices further to maintain prescription volume.

“If biosimilars come in and make no money, that’s a problem because that is a
signal to future biosimilar manufacturers that maybe it’s not a good idea to
launch the medicines,” Maini said. “If a biosimilar makes no money but ends up
reducing the price of the originator by 40% or 50%, that is a success to some
degree.”

The list price of Humira, for example, rose 141% between 2013 and 2020,
according to the American Journal of Managed Care’s Center for Biosimilars.
AbbVie took many of these price hikes despite little new clinical data in recent
years, the Institute for Clinical and Economic Review has noted.

Since biosimilars have become part of the equation — nine copycat versions of
Humira were on the U.S. market by the end of 2023 — AbbVie has taken a hit, and
the net price of Humira has fallen. The drug’s U.S. revenues fell 40% during the
first three months of 2024, according to recent earnings.


IRA IMPACTS

The IRA’s next biggest impact is expected to come from a change in the Medicare
Part D benefit relating to catastrophic coverage through reduced federal
subsidies.

“Medicare Part D tends to favor pricier reference biologic drugs over their
generally cheaper biosimilar counterparts,” Maini and co-authors wrote in their
analysis. “Two critical aspects of Medicare Part D benefit design likely
contribute to this pattern: the federally mandated discounts for branded drugs
for beneficiaries in the coverage gap and the federal subsidies given to plans
during the catastrophic coverage phase.”

Currently, Medicare covers a significant portion of biologics once patients
reach the catastrophic coverage phase, when out-of-pocket spending passes
$8,000. At that point, Medicare covers 80% of the price of the drug, but the
payment formula does not incentivize cheaper drugs.

“The patient is paying more money out of pocket and the plan is also paying
more,” Maini said. “And that’s because the government ends up picking up more of
the tab for the expensive product than for the cheaper product.”

By closing the coverage gap in the catastrophic phase, the payment shift may
realign coverage decisions in favor of biosimilars, the study predicted.

Legislation has already had an impact. Following the implementation of the
Bipartisan Budget Act of 2018, biosimilar coverage increased 23% due to changes
in formulary coverage for Medicare Part D, the study found. Discounts for
biosimilars in the legislation led to more coverage for these drugs, and the
researchers anticipate a similar shift with the IRA starting in 2025.

“We should already see an effect with the new year,” Maini said. “Firms need
some time to adjust to new conditions, but I would expect to see an effect right
away.”

Article top image credit: Courtesy of AbbVie



DRUG PATENTS PROTECT PHARMA PROFITS. TRACK WHEN THEY’LL EXPIRE.

Intellectual property is the foundation of the biopharmaceutical industry’s
business model. This database tracks key patent expiry dates for 30 top-selling
medicines.

By: Jonathan Gardner • Published May 8, 2024 • Updated May 13, 2024

Patents reward drugmakers for their inventions and, effectively, the large sums
of money they invest in research and development. The legal monopoly that
patents provide keeps generic copies at bay for many years, even decades, and
allows pharmaceutical companies to set higher prices than they otherwise could.

Executive decisions are often closely linked to the patent life of blockbuster
medicines. Ahead of so-called patent cliffs, when patent expirations permit
waves of lookalike competitors to enter the market, companies typically seek to
restock their pipelines by investing in R&D, licensing experimental therapies or
acquiring other drugmakers.

A major patent cliff faces the pharma industry later this decade, putting more
than $200 billion in annual revenue at risk through 2030. This will force
companies into major decisions: Will they pour more money into research? Or will
they buy their way out of trouble? 

Below, BioPharma Dive has compiled upcoming expiration dates for the key patents
protecting the 30 top-selling drugs, by 2023 sales. We’ll be updating this
database as the relevant dates and products change. If we’ve missed anything, or
there’s any additional information you’d like to see, please reach out and let
us know.

BIG PHARMA’S LOOMING PATENT CLIFF

Years of expiration for principal patents protecting the top 30 pharmaceutical
products by 2023 sales.

The standard term for patents granted in the U.S. is 20 years. Drugmakers
usually will have already secured patents on a new drug ahead of any regulatory
approval, meaning the protected time on market can be less.

There are strategies to offset this, however, as companies can piece together
different forms of regulatory exclusivity, seek what’s known as patent term
restoration or create “thickets” of various patents on everything from a dosing
schedule to an injection device. 

These thickets — now the target of government scrutiny in the U.S. — can
sometimes stave off generic competition for two decades or more. Enbrel, an
inflammatory disease drug sold by Amgen, will have enjoyed more than 30 years of
protected time on market when a key patent expires in 2029, for example. 

TOP-SELLERS’ LONG-LIVED PATENT PROTECTION

Lines show length of market monopoly, beginning from first U.S. approval to
currently expected patent expiration.

METHODOLOGY

For this database, BioPharma Dive compiled the 30 best-selling drugs by global
sales in 2023, then searched their manufacturers’ regulatory filings for
disclosures on the expirations of patents and other forms of legal market
exclusivity. Typically, this was via the Form 10-K that companies file with the
Securities and Exchange Commission.

This database isn’t a comprehensive account of all the patents protecting a
branded drug. Rather, it reflects company expectations, as of Dec. 31, 2023, of
when competition will arrive in the U.S. or European markets as a result of a
primary patent expiring. 

Often the intellectual property in question is what’s known as a “composition of
matter” patent, which relates to a drug’s core ingredient and offers the
broadest protection. When multiple patents with multiple expiration dates were
listed, BioPharma Dive used the composition of matter patent’s expiry date.

Companies can file for patent term extensions in the U.S., or what are known as
supplementary protection certificates in the EU. Where those are relevant,
BioPharma Dive has used those dates.

This database also doesn’t capture the potential for court rulings, or
additional formulation, manufacturing or other patents that could extend market
exclusivity. BioPharma Dive will update the database to account for those events
as they occur.

When companies reported in currencies other than U.S. dollars, BioPharma Dive
converted using yearly average currency exchange rates listed by the U.S.
Internal Revenue Service.

BioPharma Dive will annually refresh the list of 30 drugs based on the prior
year’s sales.

Article top image credit: Adeline Kon / BioPharma Dive/BioPharma Dive
Sponsored


BIOSIMILARS HAVE REVOLUTIONIZED DISEASE MANAGEMENT; THE RIGHT DATA CAN IMPROVE
ADOPTION


Sponsored content
By PurpleLab

The global biologics market has exploded and is expected to top $1 trillion in
2030. While these drugs have revolutionized the management of diseases ranging
from cancer to autoimmune diseases, high costs have reduced access. In fact,
biologics account for 46%  of pharmaceutical spending in the United states but
account for just 2% of prescriptions.

Biosimilar drugs, which were designed with similar properties to a reference
biologic, have emerged as more affordable options that can improve access to
important therapeutics. In the U.S., there have been 56 approvals and 41
launches in the biosimilars market and an additional 90 biosimilars expected to
enter the market in the next five years.

“We know that biologics change lives,” says Diane Faraone, PharmD, Senior
Director, Pharmacy Analytics at PurpleLab. “The whole point of the development
was to control costs and improve patient access and having the ability for these
disease-modifying therapies to be more available to patients who need them.”

ADDRESSING THE CHALLENGES

Although biosimilars have gained significant market share, delayed product
launches and payer and pharmacy benefit (PBM) competition and coverage
strategies have resulted in lags in uptake.

There have been several efforts to increase adoption of biosimilars. The 2022
Inflation Reduction Act introduced incentives for biosimilar manufacturer
discounts and patient out-of-pocket caps and, in 2024, the U.S. Food and Drug
Administration (FDA) created the Biosimilars Action Plan, a set of priorities
designed to facilitate the development of biosimilars and support innovation and
competition.

Payers have also become producers. CVS Health Corp,  Cigna’s Evernorth Health
Services and UHC Optum Rx have partnered with pharma and created production
facilities to make biosimilars. This innovation, coupled with updated FDA
requirements on interchangeability studies will stimulate innovation, reduce
time to product launch, increase utilization and develop a product pipeline,
according to Faraone.

“The expansion of the market brings even more need for providers to have data
analytics to understand what the [biosimilar] landscape looks like; not just the
products, but how people are using them, variations in providers and what kinds
of trends are emerging,” she says. “PurpleLab can provide that data to help
pharma better understand the market to be able to better target their
providers.”

PurpleLab data found that new biosimilar launches had lower provider counts and
adoption. The data also showed significant variation in uptake across
therapeutic areas with higher biosimilar adoption among specialty and
non-specialty medical healthcare providers (HCPs) compared to specialty advanced
practice providers.

THE DATA DIFFERENTIATOR

The data on the cost effectiveness is clear: Biosimilars have a net cost that is
up to 20% lower compared to reference biologics and savings from biosimilar
adoption could reach $124.5 billion by 2025.

Despite the potential for significant costs savings that can deliver benefits to
patients and providers, efforts are needed to bolster adoption.

Lack of familiarity with the full biosimilar offering and non-alignment of
incentives between providers and payers has been cited as a key contributor to
lags in biosimilar adoption; survey data also shows that providers dislike
interchangeability without intervention. The right data can help.

PBMs share their robust data sets with providers, but Faraone calls the data
“one dimensional.”

“Drugs are just one part of it,” says Faraone. “It’s the entire patient journey
that reflects all of the encounters in the health system, and where PurpleLab is
invaluable. We offer a comprehensive set of real-world data that represents a
holistic view of the patient experience.”

PurpleLab uses real world data to better understand biosimilar adoption
variation. The HealthNexus analytic and reporting platform accounts for
variabilities in patient characteristics that aren’t typically captured in
traditional reporting and offers insights beyond just trends, including an
understanding of prescribing and the overall impact on biosimilar utilization.

Comprehensive real-world data that increases HCP awareness of biosimilar product
availability coupled with user experience insights can improve product
knowledge, and in turn, explain biosimilar adoption in the market.

“Biosimilars are biologics that are more available and cost less and we want
providers to feel comfortable offering them to patients,” says Faraone. “Part of
that comfort level is having insights into how these are being accepted and
utilized across other provider specialties and therapeutic areas.”

Leverage PurpleLab’s data-driven insights to maximize biosimilar adoption and
improve patient care. Our comprehensive analytics platform provides the
information you need to:

 * Navigate the evolving biosimilar landscape: Gain a deeper understanding of
   market trends, payer strategies, and provider preferences.
 * Optimize prescribing decisions: Identify opportunities to increase biosimilar
   utilization while ensuring optimal patient outcomes.
 * Drive cost-effective care: Realize significant savings through informed
   biosimilar adoption.

Don’t miss out on the benefits of biosimilars. Contact PurpleLab today to
request a demo and discover how our data can support your healthcare goals.

Article top image credit: ipopba via Getty Images



BOEHRINGER CUTS PRICE OF HUMIRA BIOSIMILAR IN BID TO BUILD USE

The move could further add pressure to AbbVie’s blockbuster medicine, sales of
which have eroded in 2024.

By: Jonathan Gardner • Published July 18, 2024

Boehringer Ingelheim will sell an unbranded version of its Humira biosimilar at
a 92% discount to the list price of AbbVie drug for people who pay cash at
pharmacies through the GoodRx price comparison platform, the companies said July
18, putting further price pressure on the pharmaceutical giant’s flagship
medicine. 

The deal could help the privately-owned German drugmaker gain traction in an
increasingly competitive market. In the wake of Humira’s U.S. patent expiration
last year, 11 competitors have emerged with copycat drugs. Several are making
strategic moves to boost their standing: Sandoz and Alvotech, for example, have
cut deals with pharmacy benefits managers to gain preferred positions on drug
formularies.

Boehringer launched its branded Humira biosimilar, Cyltezo, last July at a price
5% lower than Humira’s. It wasn’t alone in that strategy, as other companies,
such as Amgen and Fresenius, also began selling biosimilars at small discounts
to AbbVie’s drug. 

But Boehringer has struggled to grow sales. Sluggish uptake of Cyltezo led
Boehringer to revamp its biosimilar sales strategy and lay off staff. Now it’s
offering a steeper discount in a bid to turn its launch around. 

Through GoodRx, Boehringer’s unbranded biosimilar will be available at $550 per
pack of two injection pens. At that price, a typical regimen of one shot every
other week for rheumatoid arthritis, Crohn’s disease and other autoimmune
disorders would yield an out-of-pocket cost of $7,150 a year. 

The Boehringer-GoodRx deal comes amid increasing signs of price and cost erosion
for Humira and its lookalikes. AbbVie reported that Humira sales fell 40% year
over year in the first three months of 2024. That decline is expected to
continue in the wake of a decision by pharmacy benefit manager CVS Health to
remove Humira from its national commercial formularies, a move that took effect
on April 1. 

In a recent research note, Leerink Partners analyst David Risinger projected a
32% decline in year-over-year Humira sales when AbbVie reports second quarter
results next week. 

AbbVie is relying on its newer autoimmune drugs, Skyrizi and Rinvoq, to offset
the loss of Humira revenue. Skyrizi and Humira had nearly identical global sales
in the first quarter, at $2 billion and $2.3 billion respectively, while Rinvoq
generated $1.1 billion. 

Article top image credit: Permission granted by Boehringer Ingelheim


DOCTORS LARGELY COMFORTABLE WITH BIOSIMILAR DRUGS, BUT QUESTION ECONOMICS

By: Jonathan Gardner • Published Feb. 22, 2023

By and large, doctors appear to be comfortable prescribing biosimilar drugs, the
copycat version of biologic medicines like inflammatory disease drug Humira or
eye treatment Lucentis. But they aren’t yet sure the discounts offered are
enough to justify switching patients who are stable on the brand-name products,
according to an annual report from healthcare distributor Cardinal Health
released in February 2023.

The report’s authors surveyed 300 specialists in rheumatology, gastroenterology
and dermatology who have patients eligible to use Humira biosimilars. In all
three specialties, more doctors agreed than disagreed with the statement,
“today, the economics of biosimilars are not favorable enough to motivate me to
switch from the reference products,” including a majority of rheumatologists. A
large portion of physicians in each specialty neither agreed nor disagreed.

Separately, just under one third of 64 surveyed ophthalmologists said “not
enough financial incentive” was a primary concern with prescribing biosimilars
to Lucentis.

Yet a majority of physicians from the three Humira-prescribing specialties said
they were “very” or “somewhat” comfortable prescribing biosimilars, including
100% of gastroenterologists. Among the ophthalmologists, 48% said they were
“uncomfortable from a clinical standpoint” among their primary concerns
prescribing biosimilars.

When asked which patients they are most likely to prescribe a biosimilar, the
most common response among the Humira-prescribing specialists was “existing
patients for whom payers have mandated a biosimilar,” suggesting that insurers’
policies will drive uptake. However, 40% of rheumatologists said “new patients”
would be the most likely people to get a biosimilar prescription.

Publication of the report came weeks after the launch of Amgen’s Amjevita, the
first biosimilar to AbbVie’s Humira available in the U.S., and seven months
after the launch of Biogen and Samsung Bioepis’ Byooviz, the first biosimilar to
Lucentis available in the U.S.

Early biosimilar uptake in the U.S. has mostly disappointed as prices, rebates,
patient assistance and insurance coverage have allowed original branded products
to retain substantial market share. Cancer drugs have seen some of the fastest
adoption patterns, in part because of value-based payment models that encouraged
the use of lower-cost medicines.

Article top image credit: Permission granted by Amgen



PBMS BATTLE BIPARTISAN SCRUTINY AS LAWMAKERS EYE REFORMS

The CEOs and presidents of CVS Caremark, Optum Rx and Express Scripts were
questioned Tuesday by members of Congress about pharmacy benefit managers’ role
in rising drug costs.

By: Susanna Vogel, Rebecca Pifer • Published July 24, 2024

In a Congressional hearing July 24, lawmakers from both parties pressed
executives from the largest pharmacy benefit managers in the nation — CVS
Caremark, UnitedHealth Group’s Optum Rx and Cigna’s Express Scripts — on the
role their companies play in prescription drug costs.

While congressional hearings on PBMs have ticked up in frequency, it is rare for
lawmakers to hear directly from top decision-makers at the companies. The last
time was in 2019, when a different group of executives appeared before the
Senate Finance Committee.

That changed yesterday when Adam Kautzner, president of Express Scripts; David
Joyner, president of CVS Caremark; and Patrick Conway, CEO of Optum Rx,
testified in front of the House Committee on Oversight and Accountability.
Collectively, their companies control approximately 80% of the U.S. prescription
market.

The hearing was the third in a string of congressional hearings targeting PBMs
and began just hours after committee Chairman James Comer, R-Ky., released a new
report summarizing a 32-month investigation into how PBMs raise prices and
reduce consumer choice.

PBMs are middlemen in the pharmaceutical supply chain that negotiate drug prices
with pharmaceutical managers on behalf of insurers and employers, and reimburse
pharmacies for dispensing prescriptions.

The companies maintain that they lower drug costs for their clients. However,
they face rising public criticism over their opaque and complex business
practices. About one-third of people reporting in a recent KFF survey they did
not take a medication they need because of high costs.

PBMs are also facing a number of lawsuits from state attorneys general and
independent pharmacies, as well as pressure from the federal government.

The Federal Trade Commission is reportedly preparing to sue CVS Caremark,
Express Scripts and Optum Rx over how they negotiate drugs with pharmaceutical
manufacturers, according to The Wall Street Journal. The lawsuit follows an FTC
report earlier this month about how PBMs’ business practices contribute to
higher costs and less consumer choice.

The Pharmaceutical Care Management Association, the PBM industry lobby,
criticized the report as one-sided and built upon anecdotes.

The House committee report could add more fuel to the fire, attacking the
industry for steering patients to pharmacies the PBM owns and favoring more
expensive brand-name drugs on their formularies, which result in higher rebates
paid to them by drugmakers.

The report found 300 examples of the three PBMs preferring medications that cost
at least $500 more per claim than a safe alternative medication excluded from
their formularies.

The executives arrived on the Hill armed with a report of their own, published
by economic consulting firm Compass Lexecon, seeking to refute the committee’s
narrative. The executives argued PBMs pass through almost all rebates to plan
sponsors and have operating margins below 5% in recent years.

Representatives weren’t buying it.

“On one hand we have PBMs claiming to reduce prescription drug prices, and on
the other hand we have the Federal Trade Commission, we have major media outlets
like The New York Times and we have at least eight different attorneys generals,
Democrats and Republicans, who all say PBMs are inflating drug costs,” said Rep.
Raja Krishnamoorthi, D-Ill.

“This is why just about every state now is taking up PBM reform,” Comer said.
“There’s a credibility issue.”

Executives maintained their services provided cost savings for consumers. Optum
Rx offered more than $2,000 in average savings per consumer annually, according
to Conway. Kautzner said Express Scripts saved its clients $64 billion last year
and kept out-of-pocket costs on a per-prescription basis at $15, “despite brand
manufacturers raising drug prices on 60% of those products.”

Joyner, meanwhile, blamed the pharmaceutical industry, stating “little or no
competition” for brand-name drugs spurs high prices. He said PBMs serve as a
necessary tool to lower costs, offering the example of AbbVie’s autoimmune drug
Humira. CVS dropped Humira from its major formularies in April and now only
covers cheaper biosimilars, Joyner said, resulting in $500 million in savings
for employers and health plans.

“Let me be clear, we do not contribute to the rising list prices,” Joyner said.
“Hampering our ability to negotiate lower drug cost only benefits the
pharmaceutical manufacturers. These drug manufacturers who testified on Capitol
Hill said they would not lower the list prices if rebates were eliminated. It
would only remove an essential tool and our ability to deliver lower cost for
medications.”

Representatives also pressed executives on whether they routinely steered
patients toward pharmacies they owned, citing concerns from independent
pharmacists who say PBMs are running them out of business.

Krishnamoorthi cited CMS figures showing price concession fees pharmacies pay to
PBMs increased 107,400% between 2010 and 2020 — a rate of increase she said
“literally staggers the imagination.”

The executives maintained they do not steer patients toward preferred pharmacies
and would not commit to altering policies.

“We do provide patient options, including home delivery, and will continue to
provide those options for patients,” Optum’s Conway said.

“We carry out the benefit designs that our clients choose,” said Kautzner.

Article top image credit: 3000ad via Getty Images


CIGNA CEO PROMISES ‘AGGRESSIVE’ DEFENSE OF PHARMACY BENEFIT MANAGERS

By: Rebecca Pifer • Published Aug. 1, 2024

Cigna’s chief executive is pledging to be more aggressive in defending its
pharmacy benefit manager amid mounting public criticism of the drug middlemen —
and as its PBM, Express Scripts, continues to drive soaring revenue for the
insurance giant.

That includes heavier lobbying in Washington, sponsoring more research into the
value of PBMs and working more with independent pharmacists, which have been
some of PBMs’ loudest critics, CEO David Cordani told investors on an Aug. 1
call to discuss the payer’s second quarter results.

PBMs sit between pharmaceutical manufacturers and payers in the drug supply
chain, negotiating prices for drugs to sit on payers’ formularies and
reimbursing pharmacies for dispensing prescriptions.

On the call, Cordani repeated a mainstay argument of the industry — that they’re
the only actor in the pharmaceutical supply chain that work to bring down costs
— but acknowledged PBMs need to do more to communicate their value.

Congress, antitrust regulators, third-party pharmacies, patient advocates and
more continue to accuse PBMs of profiteering amid a slew of negative research
and media reports focusing on how PBMs contribute to higher drug costs and fewer
choices for patients.

“The environment calls on us to be proactive” in communicating PBMs’ value,
though “our industry negotiations to drive these results can at times create
friction in the system,” Cordani said. 

“We challenge ourselves to be much more aggressive related to communication and
engagement,” the CEO added later in the call.

With his comments, Cordani is looking to protect a division from disruption that
is the single largest revenue driver for his company.

Express Scripts, which Cigna acquired for $67 billion six years ago, brought in
$26.6 billion in revenue in the second quarter — 44% of Cigna’s entire topline.

Express Scripts is a part of Evernorth, which also includes specialty pharmacy
Accredo, medical benefit manager Evicore and Cigna’s other health service
product lines.

In the second quarter, Evernorth’s revenue jumped 30% year over year to almost
$49.6 billion. Adjusted income from operations before taxes was $1.6 billion, up
7% year over year, thanks to the migration of Centene’s lucrative prescription
drug contract and growth in specialty pharmacy.

To maintain that growth, Cigna is banking on continued adoption of biosimilars
and GLP-1s, medications traditionally used for diabetes that have showed
efficacy in use cases as varied as weight loss, infertility treatments, sleep
apnea and Alzheimer’s disease.

In March, Cigna announced a cost-sharing agreement for GLP-1s covered in a
condition management program, to insulate health plan and employer clients from
the soaring costs of the medication — and ensure Evernorth can benefit from
continued demand.

Cigna has enrolled more than 2 million people in that program, called
EncircleRx, to date, according to Eric Palmer, Evernorth CEO.

“Looking ahead, we expect the use of these medications to continue to grow, and
that is part of the growth algorithm for Evernorth overall,” Palmer said.

Evernorth is also seeing “meaningful uptake” of its interchangeable biosimilar
for Humira, which became available for eligible Accredo patients for $0
out-of-pocket cost in June, according to Palmer.

Evernorth is producing the biosimilar for AbbVie’s frequently prescribed immune
disease drug through an affiliated distributor and agreements with multiple
manufacturers.

It’s still early, but after seeing demand over the past five weeks, biosimilars
could eventually grow to make up one-fifth of Accredo’s book of business, Palmer
said.

As for Cigna’s insurance business, the payer saw higher medical utilization
among its members in the quarter, in line with its peers. Areas like
facility-based services (including the emergency room) and mental health
services were elevated, but generally in line with expectations, CFO Brian
Evanko told investors.

The majority of Cigna’s business comes from offering employer-sponsored
insurance, which has sheltered the payer from the worst of utilization increases
in Medicare Advantage. Cigna reported a medical loss ratio — a marker of
spending on patient care — of 82.3% in the quarter.

Cigna is planning on getting out of Medicare coverage altogether, having agreed
in January to sell its Medicare business to Chicago-based insurer Health Care
Service Corporation. That deal remains on track to close early next year,
management said on the call.

Article top image credit: lucky-photographer via Getty Images



CVS LAUNCHES NEW VENTURE IN BIOSIMILAR DRUG EXPERIMENT

The subsidiary, called Cordavis, will work directly with manufacturers to market
or co-produce low-cost biologic drugs.

By: Jonathan Gardner • Published Aug. 24, 2023

Insurer CVS Health is getting into the market for lookalike biologic drugs,
announcing in late August the founding of a subsidiary called Cordavis to work
directly with manufacturers of biosimilars in the U.S.

Alongside the announcement, CVS said it’s contracting with Novartis’ Sandoz
division to sell under a private label its biosimilar to AbbVie’s Humira, called
Hyrimoz, at an 80% discount to Humira’s price of nearly $7,000 a month,
beginning in 2024. When Sandoz launched Hyrimoz, it set a price of about $6,600
a month.

Among the three big U.S. pharmaceutical benefit managers, only CVS Caremark
hadn’t committed to covering a Humira biosimilar from the wave that entered the
market in July. The insurer has now signaled its intent to invest more deeply by
transforming from just a buyer into a commercialization partner as well.

While biosimilars have thrived overseas, the U.S. market hasn’t been nearly as
favorable to these biologic drugs, which are “highly similar” to branded
products and have no clinically meaningful differences.

The peculiarities of the U.S. drug market have served as barriers, including the
number of payers, manufacturers’ practice of offering volume-based discounts to
payers and the difficulty in switching stable patients from one product to
another. One area in which biosimilars have been adopted more quickly is in
cancer, due in part to insurer incentives.

The market for Humira biosimilars is unique by virtue of the number of entrants,
with eight separate companies now marketing a low-cost alternative to the
top-selling arthritis drug in the U.S. Humira’s tens of billions of dollars in
U.S. sales last year helped spur that competition, as developing biosimilars is
a far more expensive endeavor than making generic pills. Smaller markets,
therefore, haven’t been as attractive.

With Cordavis, CVS appears to be testing ways to counter some of those
headwinds. “Through our direct involvement, we will expand the supply chain and
ensure biosimilar availability in the market,” said Prem Shah, CVS’ Chief
Pharmacy Officer, in a statement. CVS noted that it might work with companies to
co-produce biosimilars as well.

Even with the difficulties biosimilars have faced, analysts project their sales
could reach $100 billion by 2029. A “patent cliff” of some of the pharmaceutical
industry’s biggest sellers like Merck & Co.’s Keytruda, Johnson & Johnson’s
Darzalex and Amgen’s Enbrel will put $200 billion in annual revenue at risk by
the end of the decade.

Article top image credit: Mario Tama via Getty Images




THE STATE OF BIOSIMILARS IN 2024

Although the U.S. biosimilars market has fallen short of expectations since its
first product approval in 2015, more have poured onto the market after a slow
start. Greater price competition could emerge as more biosimilars of each drug
begin to launch.

INCLUDED IN THIS TRENDLINE

 * Cigna CEO promises ‘aggressive’ defense of pharmacy benefit managers
 * PBMs battle bipartisan scrutiny as lawmakers eye reforms
 * Boehringer cuts price of Humira biosimilar in bid to build use

Our Trendlines go deep on the biggest trends. These special reports, produced by
our team of award-winning journalists, help business leaders understand how
their industries are changing.
Davide Savenije Editor-in-Chief at Industry Dive.