Pages

Tuesday, September 24, 2024

Drug Channels News Roundup, September 2024: Inside JNJ’s Gross-to-Net Bubble, Optum Rx’s Private Label Biosimilars, Where Biosimilars Boom, Accumulators vs. Patients, and Steve Collis Retires

Autumn is here! Curl up with your favorite pumpkin-spiced blog and savor these acorns that we’ve squirrelled away for you:
  • Johnson & Johnson Innovative Medicines gives a peek inside its $43 billion gross-to-net bubble
  • Optum Rx joins the private label biosimilar bandwagon
  • Biosimilars boom for provider-administered drugs
  • Fresh evidence of how copay accumulators hurt patients
Plus, words of wisdom from Cencora's soon-to-be-former CEO Steve Collis.

P.S. Join my more than 58,000 LinkedIn followers for daily links to neat stuff along with thoughtful and provocative commentary from the DCI community.

There’s still time to request an invite to the inaugural Drug Channels Leadership Forum. Attendance will be highly limited. We have already begun extending invitations, so apply now to be considered. Click here to view the full agenda.


Johnson & Johnson Pricing Transparency Report, Johnson & Johnson Pricing Innovative Medicine

Johnson & Johnson Pricing Innovative Medicine (JJIM) has finally released its annual transparency report. While the report was a bit tardy, it remains the most complete disclosure from any major manufacturer and offers unique insight into JJIM’s gross-to-net bubble. (I reviewed reports from other manufacturers in this article: Gross-to-Net Bubble Update: 2023 Pricing Realities at 10 Top Drugmakers.)

As you can see in the illuminating chart below, JJIM paid $42.8 billion in rebates, discounts, and fees—up 9.5% from the 2022 figure of $39 billion. The 2023 total included $13.4 billion to commercial payers and pharmacy benefit managers (PBMs), $10.2 billion to Medicare and Medicaid, and an astounding $6 billion in 340B discounts to covered entities.


JJIM’s net U.S. sales for 2023 were $31.2 billion. This implies that gross sales were about $74 billion (= $31.2 billion + $42.8 billion) and total gross-to-net discounts were −58%.

There was one subtle change to this year’s transparency report. The company’s average list prices appear to have grown by about 5% in both 2022 and 2023. Last year’s report disclosed that average net prices declined by 3.5% in 2022, but the new report omits the average net price decline for 2023. Hmm.

P.S. Some of us old fogies would appreciate a PDF download that we can squirrel away in our files.

Pharmacy Passages: Formulary Update (August 2024), Optum Rx

Plan sponsors: Golly, CVS Caremark and Express Scripts have confusing and opaque formulary strategies for biosimilars.

Optum Rx: Hold my beer.

That's right, 2025 formularies are about to get even nuttier. Following in the footsteps of its PBM peers, Optum Rx will launch multiple biosimilars via its new Nuvaila private label business:
  • A low-list-price Humira biosimilar manufactured by Amgen called “Amjevita for Nuvaila.” It will compete with a high-list-price version called “Amjevita for Amgen.”
  • A private label Stelara biosimilar called “Wezlana for Nuvaila” that will be available in both high-list and low-list flavors.
Here’s the summary from its August formulary update:

[Click to Enlarge]

In Humira Biosimilar Price War Update, I pondered whether the largest PBMs would have popped the gross-to-net bubble for Humira if they hadn’t been able to profit from the switch with Cordavis (CVS Health) and Quallent (Cigna/Express Scripts). Guess we all know the answer.

P.S. In related news, Express Scripts will pop the gross-to-net bubble with a low-list-price Stelara biosimilar. It’s a favorable contrast to its mid-price Humira strategy.

US Commercial Plans Increase Choice Of Biosimilar And Originator Products; Market Net Prices Decrease, Health Affairs

In contrast to pharmacy benefits, formulary barriers continue to fall for provider-administered biosimilars.

This fascinating dive into the Tufts Medical Center Specialty Drug Evidence and Coverage Database examined coverage at 18 commercial health plans with a collective 188 million covered lives. The study examined seven of the most widely utilized provider-administered products that had at least one biosimilar option: Avastin, Epogen/Procrit, Herceptin, Neulasta, Neupogen, Remicade, and Rituxan.

In 2017, reference biologic products were preferred over all biosimilars for 55% of formulary coverage decisions and were co-preferred for a further 30% of decisions. By 2022, the reference product was the sole option for only 8% of plans’ formulary coverage decisions, while one or more biosimilar was preferred over the reference product for 61% of these decisions.

[Click to Enlarge]

Formulary coverage varied among the plans. For 2022, the frequency at which the 18 payers covered originator products as preferred varied from 3% to 89%. Back in 2019, some argued that we should throw in the towel and just start regulating the biosimilar market. But these data show that competition has allowed this market to fulfill its promise. #NoTowel

For more on how wholesalers are profiting from these developments, see Section 6.4.3. of DCI’s forthcoming 2024-25 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors.

Patient liability, treatment adherence, and treatment persistence associated with state bans of copay accumulator adjustment programs, Journal of Managed Care & Specialty Pharmacy

Who would’ve have thunk it?
“This study found that in states that banned copay accumulator adjustment programs, patients in most months paid 41%-63% less for their medicine. They were also more likely to keep taking their medicine correctly and less likely to stop taking it.”
JMCP also published a useful primer on copay accumulators, maximizers, and alternate funding programs, coauthored by 9 (!) academics. Nice to see increased scholarly focus on benefit tools that divert funds away from patients and toward plans and PBMs.

Reflections on My Retirement, Steve Collis

After 30 impressive years, Cencora's Chairman, President & CEO Steve Collis will be retiring. In this outstanding piece, Steve shares valuable lessons on teamwork, innovation, and trust. I credit Steve for revolutionizing the specialty distribution industry and then transforming Cencora (formerly known as AmerisourceBergen) into a global leader. He's had an impressive tenure atop one of the world's biggest companies.  

I look forward to seeing what Steve does next, exspecially since the CEOs of drug wholesale companies have made a range of unexpected post-retirement life choices. George Barrett, former CEO of Cardinal Health, is now a professional musician

P.S. Steve will be joining me for a one-on-one fireside chat at the Drug Channels Leadership Forum next March. I can't wait to hear his perspectives on where the industry has been and where it is going.

No comments:

Post a Comment