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.

Nick Leschly via Getty

UP­DAT­ED: Blue­bird shares sink as an­a­lysts puz­zle out $1.8M stick­er shock and an un­ex­pect­ed de­lay

Blue­bird bio $BLUE has un­veiled its price for the new­ly ap­proved gene ther­a­py Zyn­te­glo (Lenti­Glo­bin), which came as a big sur­prise. And it wasn’t the on­ly un­ex­pect­ed twist in to­day’s sto­ry.

With some an­a­lysts bet­ting on a $900,000 price for the β-tha­lassemia treat­ment in Eu­rope, where reg­u­la­tors pro­vid­ed a con­di­tion­al ear­ly OK, blue­bird CEO Nick Leschly said Fri­day morn­ing that the pa­tients who are suc­cess­ful­ly treat­ed with their drug over 5 years will be charged twice that — $1.8 mil­lion — on the con­ti­nent. That makes this drug the sec­ond most ex­pen­sive ther­a­py on the plan­et, just be­hind No­var­tis’ new­ly ap­proved Zol­gens­ma at $2.1 mil­lion, with an­a­lysts still wait­ing to see what kind of pre­mi­um can be had in the US.

Gene ther­a­pies seize the top of the list of the most ex­pen­sive drugs on the plan­et — and that trend has just be­gun

Anyone looking for a few simple reasons why the gene therapy field has caught fire with the pharma giants need only look at the new list of the 10 most expensive therapies from GoodRx.

Two recently approved gene therapies sit atop this list, with Novartis’ Zolgensma crowned the king of the priciest drugs at $2.1 million. Right below is Luxturna, the $850,000 pioneer from Spark, which Roche is pushing hard to acquire as it adds a gene therapy group to the global mix.

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Glob­al Blood Ther­a­peu­tics poised to sub­mit ap­pli­ca­tion for ac­cel­er­at­ed ap­proval, with new piv­otal da­ta on its sick­le cell dis­ease drug

Global Blood Therapeutics is set to submit an application for accelerated approval in the second-half of this year, after unveiling fresh data from a late-stage trial that showed just over half the patients given the highest dose of its experimental sickle cell disease drug experienced a statistically significant improvement in oxygen-wielding hemoglobin, meeting the study's main goal.

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J&J gains an en­thu­si­as­tic en­dorse­ment from Pres­i­dent Don­ald Trump for their big new drug Spra­va­to

Pres­i­dent Don­ald Trump has lit­tle love for Big Phar­ma, but there’s at least one new drug that just hit the mar­ket which he is en­am­ored with.

Trump, ev­i­dent­ly, has been read­ing up on J&J’s new an­ti-de­pres­sion drug, Spra­va­to. And the pres­i­dent — who of­ten likes to break out in­to a full-throat­ed at­tack on greedy drug­mak­ers — ap­par­ent­ly en­thused about the ther­a­py in a meet­ing with of­fi­cials of Vet­er­ans Af­fairs, which has long grap­pled with de­pres­sion among vet­er­ans.

In a boost to Rit­ux­an fran­chise, Roche nabs quick ap­proval for po­latuzum­ab ve­dotin

Roche’s lat­est an­ti­body-drug con­ju­gate has crossed the FDA fin­ish line, gain­ing an ac­cel­er­at­ed ap­proval a full two months ahead of sched­ule.

Po­livy, or po­latuzum­ab ve­dotin, is a first-in-class drug tar­get­ing CD79b — a pro­tein promi­nent in B-cell non-Hodgkin lym­phoma. It will now be mar­ket­ed for dif­fuse large B-cell lym­phoma as part of a reg­i­men that al­so in­cludes the chemother­a­py ben­damus­tine and a ver­sion of rit­ux­imab (Rit­ux­an).

An in­censed Cat­a­lyst Phar­ma sues the FDA, ac­cus­ing agency of bow­ing to po­lit­i­cal pres­sure and break­ing fed­er­al law

Af­ter hint­ing it was ex­plor­ing the le­gal­i­ty of the FDA’s ap­proval of a ri­val drug from fam­i­ly-run com­pa­ny Ja­cobus Phar­ma­ceu­ti­cals, Cat­a­lyst Phar­ma­ceu­ti­cals on Wednes­day filed a law­suit against the health reg­u­la­tor — ef­fec­tive­ly ac­cus­ing the agency of bow­ing to po­lit­i­cal pres­sure sur­round­ing sky­rock­et­ing drug prices.

Be­fore Cat­a­lyst’s Fir­dapse (which car­ries an av­er­age an­nu­al list price of $375,000) was sanc­tioned for use in Lam­bert-Eaton myas­thenic syn­drome (LEMS) by the FDA, hun­dreds of pa­tients had been able to ac­cess a sim­i­lar drug from com­pound­ing phar­ma­cies for a frac­tion of the cost, or Ja­cobus’ for free, as part of an FDA-rat­i­fied com­pas­sion­ate use pro­gram. But the ap­proval of the Cat­a­lyst drug — ac­com­pa­nied by mar­ket ex­clu­siv­i­ty span­ning sev­en years — ef­fec­tive­ly pre­clud­ed Ja­cobus and com­pound­ing phar­ma­cies from sell­ing their ver­sions.

Plagued by de­lays, As­traZeneca HQ costs soar to £750M as it edges to­ward 2020 com­ple­tion

In the lat­est up­date on As­traZeneca’s de­lay-prone HQ project, the phar­ma gi­ant re­vealed that the cost of con­struc­tion has swelled to £750 mil­lion ($956 mil­lion) — more than dou­ble the orig­i­nal es­ti­mate in 2013.

The move-in date is still in 2020, a spokesper­son con­firmed, af­ter As­traZeneca pushed pro­ject­ed com­ple­tion from 2016 to 2017, and then to the spring of 2019. While the ini­tial plan called for a £330 mil­lion (then $500 mil­lion) in­vest­ment, the cost bal­looned to £500 mil­lion ($650 mil­lion), and more in the most re­cent up­date.

Fresh analy­sis spot­lights car­dio ben­e­fit of J&J's In­vokana in di­a­betes pa­tients with­out his­to­ry of CV dis­ease

In­vokana sales may be mut­ed, but the di­a­betes drug is set to get some love af­ter its mak­er J&J un­veiled da­ta at the Amer­i­can Di­a­betes As­so­ci­a­tion meet­ing on Tues­day sug­gest­ing the med­i­cine can con­fer a car­dio­vas­cu­lar ben­e­fit in pa­tients who do not have pre­ex­ist­ing CV dis­ease.

Back in April, J&J had re­port­ed that in the late-stage CRE­DENCE study, the SGLT2 drug scored a 30% re­duc­tion in the risk of a com­pos­ite of ail­ments: a pro­gres­sion to the dou­bling of serum cre­a­ti­nine, end-stage kid­ney dis­ease and re­nal or car­dio­vas­cu­lar death. In terms of sec­ondary end­points, the drug was al­so found be heart-pro­tec­tive: low­er­ing the risk of CV death and hos­pi­tal­iza­tion for heart fail­ure by 31%, as well as ma­jor ad­verse CV events by 20%. In March, the com­pa­ny sub­mit­ted an ap­pli­ca­tion to ex­pand In­vokana’s la­bel to re­flect its im­pact on chron­ic kid­ney dis­ease.

Sil­i­con Val­ley's most an­tic­i­pat­ed slide deck just dropped. What does it mean for bio­phar­ma's dig­i­tal teams?

These aren’t the typ­i­cal slides you’d see at End­points — no mol­e­cules, clin­i­cal pro­grams, or p-val­ues. In­stead, we’ll talk dig­i­tal and in­ter­net trends, fac­tors that elite glob­al brands — re­gard­less of in­dus­try — must first mea­sure and un­der­stand be­fore de­ploy­ing prod­ucts in­to the world. That’s a con­cept that most of our Big Phar­ma au­di­ence is in tune with. Dig­i­tal aware­ness is key to suc­cess in the dis­cov­ery, de­vel­op­ment, and mar­ket­ing of new bio­phar­ma­ceu­ti­cals, and most of the ma­jors now have a chief dig­i­tal of­fi­cer: No­var­tis, Sanofi, and Pfiz­er, just to name a few.