Hu­malog's list price may have gone up, but Lil­ly says it got paid less per sale in 2018 ver­sus 2014

As scruti­ny in­to in­sulin pric­ing in the Unit­ed States in­ten­si­fies, Lil­ly is lay­ing out the ground­work for its de­fense ahead of a third Con­gres­sion­al hear­ing on soar­ing drug prices next month in which the mid­dle­men — phar­ma­cy ben­e­fit man­agers — will do their ut­most to ex­on­er­ate them­selves in the role they play in pre­scrip­tion drug pric­ing.

Drug pric­ing is a con­tentious is­sue that has pro­voked wide­spread furor and elicit­ed bi­par­ti­san sup­port. While pa­tients and law­mak­ers de­cry out­ra­geous prices, drug­mak­ers and PBMs are point­ing fin­gers at each oth­er: The drug­mak­ers say list prices are ris­ing to com­bat the big­ger re­bates/dis­counts the all-pow­er­ful mid­dle­men ne­go­ti­ate, while PBMs ar­gue that ul­ti­mate­ly the pow­er to set list prices lies with the drug­mak­ers. The losers are the fi­nal end-users — the pa­tients whose out-of-pock­et costs are close­ly in­ter­twined with list prices.

The first drug pric­ing hear­ing held in Jan­u­ary fo­cused on the sky­rock­et­ing price of in­sulin, with par­ents tes­ti­fy­ing that their chil­dren had died af­ter un­suc­cess­ful­ly ra­tioning their in­sulin. Such anec­do­tal re­ports of di­a­bet­ics ra­tioning and for­go­ing in­sulin have be­come com­mon­place. The Unit­ed States is home to more than 30 mil­lion di­a­bet­ics, and the av­er­age price of in­sulin near­ly tripled be­tween 2002 and 2013, ac­cord­ing to Amer­i­can Di­a­betes As­so­ci­a­tion (ADA) es­ti­mates.

On Sun­day, the US drug­mak­er — one of the trio of big glob­al in­sulin mak­ers: Sanofi and No­vo Nordisk that serves the Unit­ed States — is­sued a re­port break­ing down what it gets paid, on av­er­age, ver­sus the list price of its in­sulin treat­ments.

Be­tween 2014 and 2018, the list price for Hu­ma­log — Lil­ly’s most pop­u­lar in­sulin — in­creased 51.9% while the av­er­age amount that Lil­ly re­ceived — the net price — de­clined by 8.1%, as the com­pa­ny in­creas­es (and in some cas­es is forced to hike) the mag­ni­tude of re­bates and dis­counts it of­fers.

Source: Lil­ly

Click on the im­age to see the full-sized ver­sion

Lil­ly’s dis­clo­sure can be viewed as a step to­ward trans­paren­cy, as much as it is a dig at the role of PBMs and oth­er mid­dle­men in in­sulin pric­ing — giv­en it has be­come in­creas­ing­ly clear that the big­ger re­bates are not trick­ling down to the pa­tient. The com­pli­cat­ed drug sup­ply chain has con­found­ed law­mak­ers and re­searchers alike. In a re­cent analy­sis con­duct­ed by an ADA work­ing group — which held dis­cus­sions with more than 20 stake­hold­ers in the in­sulin sup­ply chain — it is un­clear pre­cise­ly how the dol­lars flow and how much each in­ter­me­di­ary prof­its.

Lil­ly’s re­port comes af­ter the drug­mak­er pledged to launch a half-price gener­ic of Hu­ma­log — which gen­er­at­ed near­ly $3 bil­lion in 2018 sales — ear­li­er this month. Ex­press Scripts $ES­RX — a large PBM— came out in sup­port of the move. “We of­ten have asked drug com­pa­nies to sim­ply low­er their prices. In­stead, drug com­pa­nies have elect­ed to in­crease prices and in­crease re­bates. This is the op­tion drug mak­ers have cho­sen for them­selves and for the mar­ket­place,” the com­pa­ny ear­li­er said in a state­ment. “We are in dis­cus­sions with Eli Lil­ly about Hu­ma­log au­tho­rized al­ter­na­tive, and if the net cost is low­est for plans, we will add it to our Flex For­mu­la­ry.”

Al­though in­sulin was dis­cov­ered in 1921, ad­vances in ge­net­ic en­gi­neer­ing cat­a­pult­ed hu­man in­sulin for­mu­la­tions to pa­tients with di­a­betes in the 1980s. Rapid-act­ing and long-act­ing hu­man in­sulin analogs were in­tro­duced in the 1990s, and since then oth­er up­grades have been in­tro­duced, how­ev­er the patents for many for­mu­la­tions in cur­rent clin­i­cal use have ex­pired.

Con­ven­tion­al eco­nom­ic the­o­ry as­serts new prod­ucts en­ter­ing the mar­ket will spark pric­ing com­pe­ti­tion and ren­der lega­cy prod­ucts ob­so­lete, but in the US phar­ma­ceu­ti­cal mar­ket prices of old­er drugs are of­ten ad­just­ed to re­flect the high­er prices of nov­el ther­a­pies be­ing in­tro­duced. This phe­nom­e­non, called “shad­ow pric­ing,” of­fers mon­u­men­tal in­cen­tives for both the drug­mak­ers and pay­ers in a “co­or­di­nat­ed mo­nop­oly,” while pa­tients (both in­sured and unin­sured) of­ten bear the bur­den of these costs, a re­cent­ly pub­lished study in Na­ture sug­gests.

The prices of Lan­tus (Sanofi) and Lev­emir (No­vo) have risen in lock­step with each oth­er on 13 oc­ca­sions since 2009. In fact, the prices reg­is­tered an in­crease of 30% with­in one year alone. When the more pop­u­lar Lan­tus ini­ti­ates the price in­crease, Lev­emir of­ten fol­lows suit with­in a span of days. In the fast-act­ing in­sulin mar­ket, dom­i­nat­ed by Eli Lil­ly’s Hu­ma­log and No­vo Nordisk’s No­volog, we see that prices for the two moved in lock­step in 17 in­stances for a decade, for a fi­nal price three times high­er. In fact, a vial of Hu­ma­log that cost just $21 when it was re­leased in 1996 to­day costs $275…Iron­i­cal­ly, al­though the in­dus­try us­es shad­ow pric­ing as a tac­tic to counter an­tic­i­pat­ed loss­es in rev­enue as­so­ci­at­ed with a drug falling off the ‘patent cliff’, this prac­tice could ul­ti­mate­ly back­fire if it ends up bank­rupt­ing US health­care eco­nom­ics.

This stag­ger­ing, and some­what in­ex­plic­a­ble, jump in lega­cy in­sulin prod­ucts has gar­nered the at­ten­tion of law­mak­ers. Last month, Sen­a­tors Chuck Grass­ley and Ron Wyden sent let­ters to lead­ing in­sulin man­u­fac­tur­ers: Lil­ly, No­vo Nordisk and Sanofi seek­ing in­for­ma­tion re­gard­ing re­cent price in­creas­es of up to 500% or more for in­sulin. Mean­while, out­go­ing FDA com­mis­sion­er Scott Got­tlieb has un­der­scored the sig­nif­i­cance of carv­ing out a biosim­i­lar path­way and nur­tur­ing biosim­i­lar com­pe­ti­tion for in­sulin to sub­due high prices.

Martin Shkreli [via Getty]

Pris­on­er #87850-053 does not get to add drug de­vel­op­er to his list of cred­its

Just days after Retrophin shed its last ties to founder Martin Shkreli, the biotech is reporting that the lead drug he co-invented flopped in a pivotal trial. Fosmetpantotenate flunked both the primary and key secondary endpoints in a placebo-controlled trial for a rare disease called pantothenate kinase-associated neurodegeneration, or PKAN.

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We­bi­nar: Re­al World End­points — the brave new world com­ing in build­ing fran­chise ther­a­pies

Several biopharma companies have been working on expanding drug labels through the use of real world endpoints, combing through the data to find evidence of a drug’s efficacy for particular indications. But we’ve just begun. Real World Evidence is becoming an important part of every clinical development plan, in the soup-through-nuts approach used in building franchises.

I’ve recruited a panel of 3 top experts in the field — the first in a series of premium webinars — to look at the practical realities governing what can be done today, and where this is headed over the next few years, at the prodding of the FDA.

ZHEN SU — Merck Serono’s Senior Vice President and Global Head of Oncology
ELLIOTT LEVY — Amgen’s Senior Vice President of Global Development
CHRIS BOSHOFF — Pfizer Oncology’s Chief Development Officer

A premium subscription to Endpoints News is required to attend this webinar. Please upgrade to either an Insider or Enterprise plan for access. Already have Endpoints Premium? Please sign-in below. You can contact our Subscriptions team at help@endpointsnews.com with any issues.

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Hal Barron. GSK

GSK's Hal Bar­ron her­alds their sec­ond pos­i­tive piv­otal for cru­cial an­ti-BC­MA ther­a­py, point­ing to a push for quick OKs in a crowd­ed field

Hal Barron has his second positive round of Phase III data in hand for his anti-BCMA antibody drug conjugate belantamab mafodotin (GSK2857916). And GSK’s research chief says the data paves the way for their drive in search of an FDA approval for treating multiple myeloma.

It’s hard to overestimate the importance of this drug for GSK, a cornerstone of Barron’s campaign to make a dramatic impact on the oncology market and provide some long-lost excitement for the pharma giant’s pipeline. They’re putting this BCMA program at the front of that charge — looking to lead a host of rivals all aimed at the same target.

We don’t know what the data are yet, but DREAMM-2 falls on the heels of a promising set of data delivered 5 months ago for DREAMM-1. There investigators noted that complete responses among treatment-resistant patients rose to 15% in the extra year’s worth of data to look over, with a median progression-free survival rate of 12 months, up from 7.9 months reported earlier. The median duration of response was 14.3 months.

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UP­DAT­ED: An em­bold­ened As­traZeneca splurges $95M on a pri­or­i­ty re­view vouch­er. Where do they need the FDA to hus­tle up?

AstraZeneca is in a hurry.

We learned this morning that the pharma giant — not known as a big spender, until recently — forked over $95 million to get its hands on a priority review voucher from Sobi, otherwise known as Swedish Orphan Biovitrum.

That marks another step down on price for a PRV, which allows the holder to slash 4 months off of any FDA review time.

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Brian Kaspar. AveXis via Twitter

AveX­is sci­en­tif­ic founder fires back at No­var­tis CEO Vas Narasimhan, 'cat­e­gor­i­cal­ly de­nies any wrong­do­ing'

Brian Kaspar’s head was among the first to roll at Novartis after company execs became aware of the fact that manipulated data had been included in its application for Zolgensma, now the world’s most expensive therapy.

But in his first public response, the scientific founder at AveXis — acquired by Novartis for $8.7 billion — is firing back. And he says that not only was he not involved in any wrongdoing, he’s ready to defend his name as needed.

I reached out to Brian Kaspar after Novartis put out word that he and his brother Allen had been axed in mid-May, two months after the company became aware of the allegations related to manipulated data. His response came back through his attorneys.

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Why would Am­gen want to buy Alex­ion? An­a­lysts call hot­ly ru­mored takeover un­like­ly, but seize the mo­ment

A rumor that Amgen is closing in on buyout deal for Alexion has sparked a guessing game on just what kind of M&A strategy Amgen is pursuing and how much Alexion is worth.

Mizuho analyst Salim Syed first lent credence to the report out of the Spanish news outlet Intereconomía, which said Amgen is bidding as much as $200 per share. While the source may be questionable, “the concept of this happening doesn’t sound too crazy to me,” he wrote.

FDA asks why No­var­tis took two months to launch for­mal in­ter­nal probe, af­ter AveX­is flagged da­ta ma­nip­u­la­tion

And the plot thickens. Novartis $NVS officials are reportedly now scrambling to explain to the FDA why it took them two months to open an internal investigation into data discrepancies for their $2.1 million gene-therapy for spinal muscular dystrophy — the world’s most expensive drug.

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Build­ing on suc­cess­ful PD-1 pact, Eli Lil­ly li­cens­es di­a­betes drug to Chi­nese part­ners at In­novent

Eli Lilly is expanding its partnership with China’s Innovent in a deal involving a diabetes drug sitting in its Phase I reserves.

The two companies had jointly developed one of China’s first homegrown PD-1 agents, scoring an approval for Tyvyt (sintilimab) late last year for relapsed/refractory classical Hodgkin’s lymphoma. This time around, Lilly is out-licensing a piece of its diabetes pipeline, a leading franchise that has historically produced the top-selling Trulicity and Humalog.

Am­gen, Al­ler­gan biosim­i­lar of Roche's block­buster Rit­ux­an clears an­oth­er US piv­otal study 

Novartis $NVS may have given up, but Amgen $AMGN and Allergan $AGN are plowing ahead with their knockoff of Roche’s blockbuster biologic Rituxan in the United States.

Their copycat, ABP 798, was found to have a clinically equivalent impact as Rituxan — meeting the main goal of the study involving CD20-positive B-cell non-Hodgkin’s lymphoma patients. This is the second trial supporting the profile of the biosimilar. In January, it came through with positive PK results in patients with rheumatoid arthritis.