Featured Health Business Daily Story, Jan. 25, 2018

Follow-on Biologic Basaglar Shakes Up the Insulin Market (with Chart: Half of Insured Patients Have Access to Basaglar)

Reprinted from DRUG BENEFIT NEWS, biweekly news and proven cost management strategies for health plans, PBMs, pharma companies and employers. Subscribe today!

By Diana Manos, Senior Reporter
December 22, 2017Volume 18Issue 24

A year after the first follow-on biologic Basaglar (insulin glargine) from Eli Lilly and Co. and Boehringer Ingelheim Pharmaceuticals, Inc. launched in the U.S. diabetes market, access to the drug among payers is growing rapidly, with half of all U.S. formularies placing it on their first or second tier. Although Basaglar has delivered modest savings compared to the originator drug, payers may see deeper discounts once other follow-on biologics like Merck & Co., Inc.’s Lusdana hit the insulin market.

Nadina Rosier, Pharm.D., health and group benefits practice leader for pharmacy at Willis Towers Watson (WTW), tells AIS Health that the bottom line is: “The class shouldn’t change that much given the introduction of follow-on biologics, since they are viewed as brand-name drugs and don’t have significant discounts yet.”

Despite that, aggressive payers already are looking at how to adjust coverage to play the competitors off one another. “The WTW 2017 Best Practices in Health Care Employer Survey revealed that 28% of high performing, lower cost employers versus 18% of low performing, higher cost employers are evaluating a number of cost and trend management options proactively to promote their use, if the cost is dramatically cheaper,” according to Rosier. WTW surveyed 555 employer respondents with at least 1,000 employees.

Lilly may offer rebates that offset the lower published price of Basaglar to payers that are considering excluding the drug in favor of Lantus.

Drug Benefit News

According to Goodrx.com, the price of a carton (five 3ml kwikpens) of Basaglar 100 units/ml is $234.60 — about an 11% savings compared with a carton (5 solostar pens) of Lantus 3ml, priced at $263.49.

“In situations where the net cost of Lantus after rebates falls below Basaglar, Lantus may remain the preferred product, whereas Basaglar may be disadvantaged,” Rosier says. “As Lantus is often considered the market leader in basal insulins, shifting market share to a new product such as Basaglar may be challenging, rendering the cost savings less attractive in the near term.”

How would Rosier advise health plan sponsors to manage diabetes drugs in the future, once Merck’s Lantus biosimilar comes on the market? “Employers are best to ensure they are evaluating available options for formulary, utilization management and plan design to promote cost effective use of all specialty drugs, including biosimilars,” she says.

More than half of insured members nationally have access to Basaglar via their pharmacy benefit, according to MMIT Analytics (see chart below). MMIT is the parent company of AIS Health. About 19% of all U.S. covered lives now have favorable access to the drug, up from 2% last year. An additional 24% have more restricted access (non-preferred or prior authorization required) — up from 20% last year. The percentage of lives for which Basaglar is not reimbursed fell from 77% to 47%, the MMIT data show. Basaglar became available in the U.S. in December 2016.

Rosier notes that Basaglar is a follow-on biologic and not considered a “biosimilar” or “generic” for the brand product Lantus (insulin glargine). Basaglar was approved through the abbreviated 505(b)(2) process, which uses the FDA’s initial findings for the reference product, Lantus, to demonstrate safety and efficacy. The follow-on biologic is not interchangeable for Lantus at the point of sale. Basaglar was approved via a New Drug Application (NDA) and is considered a brand name drug.

Follow-On Biologics Can Reduce Costs

Payers commonly expect follow-on biologics to reduce costs by 15% for early entrants when there is no other biosimilar competition, such as in Basaglar’s case. Up to a 30% discount is expected when there is more than one biosimilar entrant, and this is often cited by payers as the threshold at which they will prefer the biosimilar.

In recent years, Basaglar rapidly won exclusive contracts with some major payers. UnitedHealth Group moved Basaglar to Tier 1 and moved Lantus from Tier 3 to excluded status for the 2017 benefit year. Similarly, CVS Health Corp. said in August 2016 that it would remove Lantus from the insulin class in its standard formulary, replacing it with Basaglar.

Like Basaglar, which first became available in Europe under the brand name Abasaglar in 2015, other biosimilar insulin glargine analogs also are now on European markets and soon may be coming to the U.S.

Merck told investors in July 2017 that the FDA had granted tentative approval for Lusdana Nexvue (insulin glargine injection), another follow-on biologic insulin drug.

But the drug won’t come to market yet because of a lawsuit filed by Sanofi in September 2016 claiming patent infringement, Merck said. That lawsuit invokes a stay of up to 30 months or until a final court decision. It is expected to hit the U.S. market in early 2018. Lantus won European Commission marketing authorization in January 2017.

Independent investment research firm Market Realist on Oct. 13 predicted that Basaglar would witness steady growth in 2018. “In 1H17 [i.e., first half of 2017], Eli Lilly’s Basaglar generated revenues of around $132.6 million, compared with $27.2 million in 1H16. In 2Q17, Basaglar generated revenues of around $86.6 million, compared with $16.3 million in 2Q16. In 2Q17, Basaglar witnessed ~88% growth on a QoQ [i.e., quarter-over-quarter] basis.”

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Half of Insured Patients Have Access to Basaglar

Basaglar Access by Number of Covered Lives

Basaglar Access by Number of Covered Lives

Basaglar Formulary Tier Placement by Number of Formularies

Basaglar Formulary Tier Placement by Number of Formularies

SOURCE/METHODOLOGY: MMIT Analytics, as of November 2017. Based on analysis of 146 million covered lives and 591 formularies. Pharmacy tiers are stratified to reflect ascending categories of cost-sharing burden within each formulary; however, actual definitions may vary within a tier. PDL=preferred drug list.

Copyright © 2017 Managed Markets Insight & Technology, LLC. All Rights Reserved.

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