Rx Pulse Newsletter

As anticipated, pharmaceutical companies began the first quarter of the year by raising prices on hundreds of medications, including the increasingly popular GLP-1 medications Ozempic and Mounjaro. On average, manufacturers raised the prices of their medications by 4.5%, although some increases were 10% or higher, according to data analysts from the healthcare research firm 46brooklyn Research. While this median increase is in line with those seen in recent years, it is higher than the rate of inflation, which landed at 3.4% in December of 2023.

There has been increasing scrutiny surrounding drug pricing from lawmakers, prescribers and consumers in recent years. This attention has led to the Biden administration implementing various laws focused on lowering prescription drug costs and health insurance premiums. These efforts include the American Rescue Plan Act and the Inflation Reduction Act, as well as pricing negotiations by Medicare for the first time in the program’s history. Despite the focus on price hikes in the pharmacy industry, manufacturers like Novo Nordisk and Eli Lilly, who make the GLP-1 medications Ozempic and Mounjaro, respectively, increased the list price for both. Ozempic prices increased by 3.5%, and Mounjaro climbed 4.5%. These price hikes, which are above the inflation rate for two extremely popular medications, may sharpen the scrutiny on drug manufacturers and the pharmacy industry as a whole.

Other notable increases among top-selling medications were the cystic fibrosis medication Trikafta (Vertex Pharmaceuticals), which increased by 5.9%, the anti-inflammatory medication Dupixent (Sanofi) increased by 6%, Biktarvy (Gilead Sciences), medication for HIV, saw an increase of 4.9%, and the popular psoriasis mediation Skyrizi (AbbVie) jumped 5.8%.

In general, drug makers cite market trends, inflation, research investment and the drug’s clinical value as reasons for price hikes. Manufacturers also state that they often do not make more money despite increasing prices due to the need to offer discounts and rebates to ensure their products are covered by health plans. According to data gathered by the research firm SSR Health, this claim may not be unsubstantiated. While list prices increased by 5.3% in the third quarter of 2023, the amount that manufacturers received fell by 2.2%. Net prices are likely to continue to decline this year as well, according to the firm.

Not all changes in drug list prices were increases, however. In a rare occurrence, more than two dozen medications saw a decrease in price of more than 10%. Many of these changes were in response to legislation and included Advair Diskus made by GlaxoSmithKline, as well as insulin products from Sanofi and Novo Nordisk.

Given the complex nature of drug pricing, it is doubtful that significant change will happen quickly, and prices will continue to increase year over year. However, the spotlight will likely continue to shine on the pharmacy industry and the amount consumers pay for medications in the coming years.

Sources:

1. The White House. “Fact Sheet: President Biden Takes New Steps to Lower Prescription Drug and Health Care Costs, Expand Access to Health Care, and Protect Consumers,” The White House, 2024.
2. Jennifer Calfas. “Drugmakers Raise Prices of Ozempic, Mounjaro and Hundreds of Other Drugs,” Wall Street Journal, 2024.

Members continue to be impacted by drug shortages. Many of the shortages discussed in the Q4 2023 Rx Pulse newsletter have not been resolved, and an additional 48 new shortages have been reported in Q1 2024.

With shortages rolling over from Q4 2023, the total number of active medication shortages in the US has reached a new high of 323, according to the American Society of Health System Pharmacists (ASHP). This surpasses the previous record of 320 shortages, which was set in 2014. ASHP also reported 156 new shortages reported in a single year in 2023. However, 2011 holds the record for the most shortages reported in a single year, with 267 total shortages. So far, it looks unlikely 2024 will break the single-year record, but only time will tell.

Differences in Shortage Reporting From ASHP and FDA

ASHP is a great resource for drug shortages. However, it is practitioner- focused versus member-focused and should be combined with other resources to create a bigger picture. It’s important to note that their approach and reported data for shortages differs from another great drug shortage resource, the US Food and Drug Administration (FDA). The FDA relies mostly on manufacturers and market sales research to report drug shortage information, which can cause their updates to be delayed compared to ASHP, which collects data through planned surveys and real-time submissions on their websites; this causes ASHP’s list to be larger. The way they each define drug shortages and resolution causes their lists to be slightly different too. When it comes to reporting why there is a shortage, the FDA often has more reasons listed because their reasons are defined by legislation. The reasons for both come directly from the manufacturer, but ASHP’s reasons may be different due to a different source and lack of need to follow the reasons defined by legislation.

Top Drug Classes Impacted by Shortages

ASHP’s data also reported that the top five drug classes impacted in Q1 2024 were central nervous system (CNS) agents, antimicrobials, hormones, chemotherapy and fluids/electrolytes. Controlled substances made up 12% of the active shortages, and most also fall under the #1 CNS agent class. Two categories within the CNS class contain controlled substances and have received a lot of attention: stimulant medications used to treat ADHD and opioids for pain. Members needing these medications already have the burden of the red tape involved in receiving a controlled substance, but they’ve also been dealing with on-and-off shortages of their drugs for years.

US Drug Enforcement Administration (DEA) regulations may be exacerbating some of these shortages. They have legal authority to set aggregate production quotas (APQs) on schedule I & II controlled substances. The APQs determine how much of a drug can be manufactured in the US each year, and the manufacturer then breaks this down into individual quotas that restrict how much raw material they have to produce medications. 2024 marks the eighth year the DEA has lowered the APQ for opioid drugs. They claim the 2024 quota will be sufficient to meet forecasted needs, but many patients have voiced this will only increase their burden.

It was hoped the release of Vyvanse’s generic lisdexamphetamine last August, with more than 10 manufacturers approved for production, would add enough supply to the high demand in the stimulant class to help ease shortages. However, most manufacturers were added to the shortage list too soon to have much impact. Supplies of both the brands and generics in this category have continued to fluctuate since. Last fall, the DEA asked manufacturers of amphetamine salts (common brand, Adderall) to increase production or return the unused raw ingredients for other manufacturers to use. More than a dozen manufacturers responded that they would increase production but we have not seen evidence of that yet. After formal complaints about the shortage of methylphenidate (common brand, Concerta), they increased the APQ by 25% in Q3 2023 to assist with increasing supply.

GLP-1 Demand and Supply Challenges

The ever-popular GLP-1 agonists fall under the #3 impacted class, hormones, and this includes both the diabetic (Ozempic, Mounjaro, etc.) and weight loss versions (Wegovy, Zepbound and Saxenda). Members are still being impacted at both retail and mail-order pharmacies despite drug company efforts to increase production. Novo Nordisk, maker of Ozempic, Wegovy and others, acquired three manufacturing facilities from Catalent to help increase the production of their GLP-1s. Eli Lilly, maker of Mounjaro and Zepbound, said it doubled its production capacity by the end of 2023 and expects to continue to increase capacity by the second half of 2024 to 1.5 times what it was in the second half of 2023. They also announced a new plant they hope to produce GLP-1s by the end of 2024 to add supply to the market in 2025.

Pharmacy benefit managers (PBMs) developing and continually enhancing utilization management criteria for GLP-1s throughout 2023 should provide better protection from off-label use of these drugs and increase the supply available, but only if utilization doesn’t continue to climb for other reasons. On March 8, 2024, the FDA found another reason to approve Wegovy. It was approved to reduce the risk of heart attack and stroke in members that are obese or overweight and already have cardiovascular disease. This means more members will qualify, especially on plans that don’t cover weight loss currently, since these members would’ve qualified under the original FDA-approved weight loss criteria. What the path to coverage for this new reason looks like and, therefore, possible increased demand is still to be determined.

Government Efforts to Address Shortages

The White House and other federal agencies continue to look into the cause of the shortages and what can be done about them. The Federal Trade Commission and the Department of Health and Human Services are focusing on the impact of Group Purchasing Organizations and drug wholesalers on generic shortages because the lack of competition for suppliers could be adding to the shortages. The White House also recently stated that it is looking to invest $35 million into the domestic production of materials needed to make sterile injectables.

Sources:

1. Kate Gibson. “Hundreds of Drugs Are in Short Supply Around the US, Pharmacists Warn,” CBS News, 2024.
2. “Drug Shortages Information and Resources.” ASHP, 2024.
3. “Current Drug Shortages and Management.” NFP Rx Solutions, 2024.
4. Annika Kim Constantino. “Most Doses of Eli Lilly’s, Zepbound, Mounjaro in Short Supply Through June, FDA Says” 2024.
5. Office of the Commissioner. “FDA Approves First Treatment to Reduce Risk of Serious Heart Problems Specifically in Adults with Obesity or Overweight,” Federal Drug Administration, 2024.

Members continue to be impacted by drug shortages. Many of the shortages discussed in the Q4 2023 Rx Pulse newsletter have not been resolved, and an additional 48 new shortages have been reported in Q1 2024.

With shortages rolling over from Q4 2023, the total number of active medication shortages in the US has reached a new high of 323, according to the American Society of Health System Pharmacists (ASHP). This surpasses the previous record of 320 shortages, which was set in 2014. ASHP also reported 156 new shortages reported in a single year in 2023. However, 2011 holds the record for the most shortages reported in a single year, with 267 total shortages. So far, it looks unlikely 2024 will break the single-year record, but only time will tell.

Differences in Shortage Reporting From ASHP and FDA

Humira has had market exclusivity for 20 years until its patent expired in 2023. Today, there are at least ten biosimilars on the market. In 2023, AbbVie, the manufacturer of Humira®, was bracing for a big hit in their Humira sales. However, the adoption of Humira biosimilars has had a slow start over the past year. As of February 2024, Humira still controls over 96% of the market and is still dominating the average number of prescriptions per week. Humira biosimilar adoption is less than 1%, according to the new analysis of IQVIA data, while other biosimilar adoptions are usually at 22% around this time after a patent is lost. Contributing factors for the slow adoption of the biosimilar include physician and patient hesitancy and lack of formulary changes. Larger PBMs prefer Humira due to the higher list prices, resulting in higher rebates and increased profitability compared to the biosimilars.

However, CVS has kicked off 2024 by announcing its Humira biosimilar strategy. Teaming up with Sandoz through their subsidiary Cordavis, CVS aims to disrupt the market dominated by high-priced drugs like Humira. Cordavis announces a game-changing move by introducing a biosimilar version of Humira, Hyrimoz, priced more than 80% below the current market rate. CVS has announced they are excluding Humira from their formulary starting April 1, 2024, and preferring Hyrimoz. In April, Hyrimoz contributed roughly 93% of new prescriptions for Humira biosimilars.

Alternatively, physician and patient hesitancy towards biosimilars is a key factor with the slow uptick as well. In fact, it is common to see patient’s switch from Humira to another branded drug, instead of a biosimilar. AbbVie has spent millions on advertisements for their drugs Skyrizi and Rinvoq as alternative options to Humira.

Product	Manufacturer	Launch	Interchangeable	Citrate Free	Discount
Amjevita	Amgen	1/31/2023	No	Yes	-5%, -50%
Idacio (high WAC)	Fresenius Kabi	7/1/2023	No	Yes	-5%
Idacio (low WAC)	Fresenius Kabi	12/1/2023	No	Yes	-87%
Hadlima	Samsung	7/1/2023	No	No (low), Yes (high)	-85%
Cyltezo (high WAC)	BI	7/1/2023	Yes	Yes	-5%, -7%, -80%
Cyltezo (low WAC)	BI	10/2/2023	Yes	Yes	-81%
Yusimry	Coherus	7/1/2023	No	Yes	-85%
Hyrimoz (high WAC)	Sandoz	7/1/2023	No	No (low), Yes (high)	-5%
Hyrimoz (low WAC)	Sandoz	7/1/2023	No	No (low), Yes (high)	-81%
Yuflyma	Celltrion	7/1/2023	Applied	Yes	-5%
Hulio (high WAC)	Viatris/Biocon	7/1/2023	No	Yes	-5%
Hulio (low WAC)	Viatris/Biocon	7/1/2023	No	Yes	-85%
Abrilada	Pfizer	1/1/2024	Yes	Yes	5%, -60%
Simlandi	Alvotech/Teva	Undetermined	Yes	Yes	Undetermined

Additionally, many manufacturers have high Wholesale Acquisition Cost (WAC) biosimilars in addition to low WAC biosimilars. This is a dual pricing strategy where the high WAC biosimilars have a higher list price and higher rebate associated with them. This allows more probability for PBM and manufacturers to gain access to PBM formularies and the market.

Overall, patients and employers would benefit the most when transitioning to biosimilars. There will be trends to watch this year, including formularies shifting to favor more biosimilar use, co-branded biosimilars launching, and manufacturer and payer strategies surrounding biosimilar use.

Sources:
Tristan Manalac. “AbbVie’s Humira Loses Only 4% of Market Share to Biosimilars: Report,” BioSpace, 2023.
Biosimilars Council and IQVIA. “CVS Health Highlights Path to Accelerating Long-Term Growth through Building a World of Health around Every Consumer,” Biosimilars Council, 2023.