Drug Pricing

As expected, early July saw the launch of multiple biosimilars of AbbVie Inc.’s Humira (adalimumab). Most of them launched with wholesale acquisition costs (WACs) just slightly less than that of the reference drug, but a few undercut that price fairly significantly.

Of the seven agents — including a branded and an unbranded version of Hyrimoz (adalimumab-adaz) from Sandoz, a division of Novartis Pharmaceuticals Corp., that will be spun off into a new publicly traded standalone company in the second half of this year — five launched with a WAC 5% off Humira’s $6,922 price tag:

Following the launch of Amgen Inc.’s Amjevita (adalimumab-atto), a slew of other FDA-approved Humira (adalimumab) biosimilars entered the U.S. market in July under settlement agreements with Humira originator AbbVie Inc. Major PBMs quickly announced that they would add more biosimilars to their formularies to compete with Humira.

At the end of June, UnitedHealth Group’s Optum Rx said it will place Boehringer Ingelheim's Cyltezo (adalimumab-adbm) and Sandoz's Hyrimoz (adalimumab-adaz) on its formulary at parity with Humira starting July 1. The Cigna Group’s Express Scripts then said it would add three biosimilars — Cyltezo, Hyrimoz and adalimumab-adaz (the unbranded equivalent of Hyrimoz) — to its list of preferred drugs.

The FDA last month approved two new gene therapies for Duchenne Muscular Dystrophy (DMD) and hemophilia A, and major PBMs tell AIS Health, a division of MMIT, that they have not yet decided how to cover the new treatments. If current trends are any indication, health plans will impose strict utilization management requirements and attempt to negotiate outcomes-based reimbursement pacts with the treatments’ manufacturers.

The FDA on June 22 granted accelerated approval to Sarepta Therapeutics, Inc.’s Elevidys (delandistrogene moxeparvovec-rokl), the DMD treatment. It will have a list price of $3.2 million. BioMarin Pharmaceutical Inc.’s Roctavian (valoctocogene roxaparvovec), for hemophilia A, gained full FDA approval on June 29, and will have a list price of $2.9 million. Both therapies are administered as a one-time dose. Roctavian also typically requires an indefinite period of simultaneous treatment with corticosteroids to reduce patients’ immune-system response to the gene therapy.

Plan sponsors’ use of copayment accumulators, copay maximizers and alternative funding companies to keep spending on specialty drugs down has been a fairly recent trend but one that continues to pick up speed, noted longtime industry expert Adam J. Fein, Ph.D., CEO of Drug Channels Institute, during a recent webinar. But as that use continues to increase, multiple questions exist around the practices and what the future holds for them.

The focus of the June 23 webinar, titled PBMs and the Battle Over Patient Support Funds: Accumulators, Maximizers, and Alternative Funding, mainly affects specialty drugs, which now represent more than half of payer spending on drugs due to two main reasons, he said. The first is the specialty drug pipeline and the costly prices of those agents, while the second is the dramatic growth in generic dispensing over the past 20 years.

Since the first biosimilar for Humira launched in the U.S. this January, it’s been joined by several other biosimilars referencing AbbVie Inc.’s blockbuster immunosuppressive drug — with each manufacturer trying to differentiate their offerings in a suddenly crowded market. Major PBMs Optum Rx and Express Scripts have both responded by adding some of the newly launched biosimilars to their standard commercial formularies, while CVS Caremark appears to be still considering its options.

Experts who spoke with AIS Health, a division of MMIT, shared a variety of viewpoints about how coverage of the newly launched biosimilars is shaping up. But all are closely watching how PBMs, physicians and patients respond to the influx of competition for AbbVie’s cash cow, which has earned the drugmaker $208 billion globally since it was first approved by the FDA in 2002.

The FDA recently expanded the indication of AbbVie Inc.’s Rinvoq (upadacitinib), making it the first oral treatment and the first Janus kinase (JAK) inhibitor for Crohn’s disease. Still, the agent is entering a highly competitive class in which manufacturer rebates play a big role. And while respondents to a Zitter Insights survey said the drug will somewhat lessen the unmet need in the treatment of the condition, they said that a moderate level of need still exists with the agent’s approval.

On May 18, the FDA expanded the label of Rinvoq to include the treatment of adults with moderately to severely active Crohn’s disease who have had an inadequate response or intolerance to at least one tumor necrosis factor (TNF) inhibitor. The agency initially approved the JAK inhibitor on Aug. 16, 2019. This is the seventh indication the drug has gotten across rheumatology, dermatology and gastroenterology.

As plan sponsors continue to grapple with the high costs of specialty drugs, they have undertaken various strategies to deal with them. The use of copayment accumulators, copay maximizers and alternative funding companies has been a fairly recent trend, noted longtime industry expert Adam J. Fein, Ph.D., CEO of Drug Channels Institute, during a recent webinar. But as that use continues to increase, multiple questions exist around the practices and what the future holds for them.

Fein explained that he chose the focus of the June 23 webinar, titled PBMs and the Battle Over Patient Support Funds: Accumulators, Maximizers, and Alternative Funding, because the entities are a hot industry topic currently. “And I think this is a topic of great relevance to manufacturers, to PBMs, to plan sponsors, to patients, to pharmacies, to everyone in the channel. And it’s one that I found is not well understood,” he stated.

Alex Oshmyansky, M.D., the CEO of Mark Cuban Cost Plus Drug Co. (MCCPDC), the online cash pharmacy funded by the eponymous billionaire investor, said the company has become a licensed drug wholesaler nationwide and has plans to roll out quasi-PBM business lines including a retail pharmacy network. Oshmyansky discussed these new ventures — and addressed criticism by health care experts that his firm can’t lower specialty pharma costs — during a June 13 keynote at the 2023 AHIP Conference in Portland, Oregon.

“I think it was always our ambition” to work with retail pharmacies, Oshmyansky said. “I think there’s a variety of products where it just doesn’t necessarily make sense for them to be mail-order products,” citing “cold supply chain” and “acute care medications” as examples.

CMS on June 9 revealed a list of 43 Medicare Part B drugs that will be sanctioned for having their prices increase faster than the rate of inflation, as part of the Inflation Reduction Act (IRA). The number of drugs affected is almost double the number that made CMS’s initial list, which the agency made public in March. Starting in July, beneficiaries who normally pay 20% coinsurance under Part B for the 43 drugs will see their cost sharing decline based on an inflation-adjusted price. The federal government will invoice manufacturers for 2023 and 2024 Part B inflation rebates no later than fall 2025, and those funds will be deposited into the Medicare Trust Fund.

Seven of Amgen, Inc.’s medications made the list, including its blockbuster bone cancer treatment Prolia, cancer medications Kyprolis, Vectibix and Blincyto, and Nplate for immune thrombocytopenia.

As the FDA prepares to make a full approval determination on Alzheimer’s drugs such as Biogen Inc.’s Leqembi (lecanemab-irmb), CMS has released new details about its plan to collect real-world data on Medicare patients taking the drugs. To qualify for Medicare coverage of a drug with traditional FDA approval that may slow the progression of Alzheimer’s disease, patients’ physicians will have to participate in the collection of evidence about how the drugs work in patients through a registry. And they will be able to submit that information in an “easy-to-use format” through a nationwide, CMS-facilitated portal, the agency explained last month. CMS is working with multiple organizations preparing to launch their own registries, and once available, those will be listed online and clinicians may choose a registry for participation, the agency clarified on June 22. CMS also listed the various elements it intends to capture through the registry, including information related to questions in the National Coverage Determination, such as whether the drug meaningfully improves health outcomes (i.e., slows the decline of cognition and function) for patients in broad community practice, and whether the benefits and harms (e.g., brain hemorrhage and edema) associated with the use of the drug depend on the characteristics of patients, treating clinicians and setting. The FDA decision is expected by July 6.