Biotech
Thursday, August 24th, 2023 9:06 am EDT
Dive Brief:
- Insurer CVS Health is getting into the market for lookalike biologic drugs, announcing Thursday 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.
Dive Insight:
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.
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