Rise Of The Biosimilar Formulary: CVS Excludes Lantus, Neupogen For 2017
Executive Summary
Zarxio and Basaglar will be the beneficiaries of the cost-cutting move, although how much it will help the follow-on products remains unclear.
CVS Health Corp. is moving to promote the use of biosimilar and follow-on competition to Amgen Inc’s. granulocyte-colony stimulating factor drug Neupogen (filgrastim) and Sanofi’s glargine insulin Lantus by excluding those drugs from coverage in its standard national formulary in 2017.
The standard formula covers approximately 25 million individuals and is among the formulary options CVS offers to its payer clients. Neupogen and Lantus were not excluded from coverage in 2016.
“Biosimilar and follow-on biologics will be included as a key component of our 2017 standard formulary strategy, replacing higher cost drugs within the categories,” CVS said in announcing its exclusion list Aug. 2.
“This will include the biosimilar Zarxio, replacing Neupogen, to decrease the risk of infection in patients receiving treatment for certain forms of cancer, and the follow-on product Basaglar – approved in Europe as a biosimilar – replacing the insulin Lantus for treatment of diabetes.”
Pharmacy benefit manager Express Scripts Holding Co. does not exclude Lantus or Neupogen in the current version of its 2017 formulary exclusions list, which was released Aug. 1. However, the company is not ruling out a change for Lantus when Basaglar enters the market. “We will reassess this category when Basaglar becomes available,” a spokesperson for the company said.
Basaglar was approved by FDA in December 2015 after Lilly reached a patent settlement agreement with Sanofi .Under the agreement, Lilly can launch Basaglar in the US on Dec. 15, 2016 in exchange for undisclosed royalties on sales. (Also see "FDA Makes It Official With Basaglar Approval For Diabetes" - Pink Sheet, 16 Dec, 2015.) The drug has already been approved and launched in Europe.
Lantus sales have been declining in the US as a reflection of price concessions to payers and competition, including from Sanofi’s own longer-acting insulin glargine, Toujeo. CVS also excludes Toujeo from its standard formulary in 2017.
US sales for Lantus declined 15.7% to approximately $1bn in the second quarter, according to Sanofi, while US sales for Toujeo totaled about $119m.
How Much Will It Matter For Zarxio?
Sandoz Inc.’s Zarxio (filgrastim-sndz) was introduced in the US in September 2015, priced at a 15% discount to Neupogen. (Also see "Zarxio 15% Price Discount To Neupogen In US Tracks European Strategy" - Pink Sheet, 3 Sep, 2015.) It remains the only biosimilar to have actually entered the market in the US.
It’s unclear how much of an impact CVS’ exclusion will have on uptake for Zarxio. Neupogen is not usually reimbursed under the pharmacy benefit. It is mainly covered through the medical benefit, which would not be managed by the standard formulary.
Covance VP John Carlsen noted in an email that “although pharmacy benefit coverage of Neupogen is not unheard of, Neupogen is still by and a large a medical benefit drug. So if a health plan does not mandate pharmacy benefit access and does not have the same exclusion under its medical benefit, then presumably patients would still be able to access Neupogen under the medical benefit.”
Nevertheless, CVS Caremark President Jonathan Roberts maintained the formulary decisions around Neupogen and Lantus are meant to lay the ground work for taking advantage of the savings opportunity offered by biosimilars and follow-on products.
“We think biosimilars will be an opportunity” to get “the lowest, most cost-effective drugs for our clients to provide as a benefit for their members,” Roberts said during the company’s Aug. 2 earnings call. He acknowledged that “most of the pipeline is filled with biosimilars under the medical benefit, with the exception of Humira. But we’ll continue to look to make decisions that are in the best interests of our clients and their members.”
US sales for Neupogen in the second quarter were $141m, down 26% compared to the same period a year ago, Amgen reported. Sales have been shifting to Amgen’s long-acting follow-on to Neupogen, Neulasta (pegfilgrastim).
Neulasta is the much bigger prize for potential biosimilar competitors, with US sales reaching $962m in the second quarter. However, biosimilars to Neulasta are facing battles on both legal and regulatory fronts. (Also see "Biosimilar Launch Notification Delay Remains In The US, Might Not Matter For Newer Products" - Pink Sheet, 7 Jul, 2016.) (Also see "Biosimilars Still Flummoxed By Neulasta: Sponsors Now 0 For 2 At FDA" - Pink Sheet, 19 Jul, 2016.)
[Editor’s note: This story was updated after it was initially published to clarify that Toujeo is a Sanofi drug.]