Cordavis Could Benefit U.S. Biosimilars Market
It has now been over a year since the first Humira biosimilar, Amgen’s Amjevita, entered the U.S. market. Eight additional adalimumab biosimilars followed suit, offering lower-cost alternatives to AbbVie’s blockbuster drug via a variety of dual-pricing and discounting strategies.
Some PBMs, including Express Scripts and Optum Rx, were quick to add some biosimilars to their formularies, embracing a mix of low-list-price and high-list-price/high-rebate biosimilars. Many other payers, however, have been somewhat slow to place biosimilars on their formularies, both within the Humira biosimilar space and across the nearly 50 other biosimilars that were approved by the end of March 2023.
CVS Health, parent company of PBM CVS Caremark, hopes to change the speed and trajectory of biosimilar adoption. In August 2023, CVS Health launched Cordavis, a wholly owned subsidiary that works directly with pharma manufacturers to commercialize and/or co-produce biosimilars. “Through Cordavis, CVS Health intends to develop a portfolio of products that it expects will facilitate broader access to biosimilars in the U.S. — creating more competition that drives down prices — while encouraging investment in future products,” said CVS.
The new company’s first collaboration was with Sandoz for its Humira biosimilar, Hyrimoz, which is offered under a Cordavis private label. The agent is available at a discount of more than 80% off Humira’s list price. Hyrimoz is available in a citrate-free, high-concentration version, as well as a citrate-containing, low-concentration version.
CVS Caremark has said it will remove Humira from its national commercial template formularies and replace it with three Sandoz biosimilars: Hyrimoz, Cordavis-branded Hyrimoz and adalimumab-adaz, the unbranded Hyrimoz.
Cordavis Has Many Advantages
Historically, biosimilars haven’t fared as well in the U.S. market as they have overseas. CVS’s approach to commercializing biosimilars through Cordavis has several advantages going for it:
- The Cordavis strategy could offer CVS Health the ability to lock in a preferred source of supply, allowing it to overcome the supply chain obstacles manufacturers often face when selling products and getting them on formulary. When unveiling the new company, CVS Health’s chief pharmacy officer maintained that “through our direct involvement, we will expand the supply chain and ensure biosimilar availability in the market.”
- Cordavis could give CVS Health the ability to gain negotiating power against manufacturers of both reference products and biosimilars.
- While some experts are doubtful that biosimilars can significantly reduce healthcare costs on their own, others feel that Humira biosimilars “will be the exception that proves the rule” because much more revenue is at stake, and thus more competition.
All of this puts Cordavis in an ideal position.
Net Price Is Most Important
To get a sense of what payers think about biosimilar coverage and the potential impact of Cordavis on the biosimilar space, the MMIT Indices team conducted a Rapid Event Primer in February 2024.
The vast majority of respondents (90%) said their organization plans to cover Humira biosimilars, with many citing lower net costs as their primary motivation. Unsurprisingly, respondents cited competitive net price as the top factor influencing their decision to cover biosimilars, followed by the drugs’ clinical equivalence to the reference product and interchangeability status. Much less important were product availability, manufacturer integrity, increased bargaining power for PBMs and patient-assistance programs.
Payers also reported no concerns with a high-list-price/high-rebate biosimilar, reiterating that net price is their top priority. One pharmacy director commented that such an agent “helps pass back value to our clients.”
Cordavis Likely to Increase Biosimilar Competition
Payers also shared their thoughts regarding Cordavis’ influence on biosimilar competition, with half of the respondents anticipating a neutral impact and half expecting Cordavis to have a positive impact. “With more producers of biosimilars, this competition will hopefully continue to decrease the price of biosimilars,” said one medical director.
When asked about Cordavis’ impact on patient outcomes, most payers said they expect it will have only a slight impact. According to one pharmacy director, “I do not anticipate patient outcomes improving, but I do anticipate costs decreasing and patient out-of-pocket [costs] decreasing.”
On the issue of Cordavis’ effect on overall drug costs beyond the biosimilar class, half of the respondents said they expected a slight impact, while 30% said they believed a moderate impact would be the result.
Cordavis also has the potential to create challenges within the biosimilar market, 70% of respondents said. Among the issues they cited are competitive contracting, particularly for companies without CVS’s scale; crowding out of other manufacturers; and the stocking and availability of biosimilars.
Overall, payers pointed to Cordavis’ greater negotiating power against both biosimilar and reference drug manufacturers as the company’s most attractive benefit. “CVS is large and will have strength,” observed one pharmacy director. And according to a medical director, greater competition will “provide leverage to the biosimilar market to decrease pricing.”
Ultimately, only time will tell how Cordavis will affect the U.S. market. Based on the information available now, however, the company could very well be good for biosimilar competition, driving down prices for payers and patients alike.
To understand payer perspectives on industry trends, learn more about MMIT’s Biologics and Injectables Index.
