Rx Pulse Newsletter

At the start of our journey into Q1 2024, notable trends are popping up around the pharmacy landscape — kicked off by CVS's strategic dive into the biosimilar market. Teaming up with Sandoz through their subsidiary Cordavis, CVS aims to disrupt the market dominated by high-priced drugs like Humira, which lost its patent protection in July 2023. Despite the patent expiration, costs haven't seen a significant reduction until now. Cordavis announced a game-changing move by introducing a biosimilar version of Humira, Hyrimoz, priced more than 80% below the current market rate. The biosimilars sector, valued at $27.2 billion in 2023, is projected to surge to $76.2 billion by 2030, with CVS eyeing a $100 billion market by 2029.¹

In the space of non-alcoholic steatohepatitis (NASH) treatment, an area lacking FDA-approved medications, companies like Galectin Therapeutics, Galmed Pharmaceuticals, Inventiva Pharma, Madrigal Pharmaceuticals and 89bio are pushing forward with promising drug candidates nearing the completion of their approval pathway. The NASH treatment market, valued at $5.2 billion in 2022, is poised to skyrocket to $48.3 billion by 2035, exhibiting a robust compound annual growth rate (CAGR) of 18%. These companies' progress in clinical trials fuels optimism for breakthrough NASH treatments on the horizon.²

Meanwhile, the CRISPR gene-editing tool secured a pivotal moment with its first clinical approval in the UK for addressing sickle cell anemia and beta-thalassemia. Anticipating FDA approval in the US by March 2024, CRISPR-Cas9's transformative impact on biotechnology is becoming evident. Other notable breakthroughs include Casgevy, a newly approved gene editor, which showcases its prowess in correcting genetic anomalies in stem cells, paving the way for the production of healthy blood cells. While acknowledging the tool's limitations, the prospect of reshaping biotechnology is exciting, especially with collaborative efforts involving artificial intelligence (AI). The synergy of CRISPR with AI, along with the emergence of base and prime editing, propels the gene-editing landscape into a new era of precision and potential cures, as evidenced by ongoing clinical trials and the vast realm of applications, including the epigenome.³

As we continue into 2024, it signals a hopeful chapter not just for CRISPR technology but also for potential cost savings with the introduction of novel biosimilars and the exploration of innovative treatment avenues. With optimism, we hope the positive momentum to continue, fostering further encouraging trends within the marketplace.

Sources:

1. Tina Reed. “CVS Moves Into Biosimilars with Low-Cost Humira,” Axios, 2023.
2. Willow Shah-Neville. “Five Companies Racing to Bring Their Nash Treatments Toward the Finish Line,” Labiotech, 2023.
3. Shelly Fan. “CRISPR Gene Editing Had a Breakthrough Year — And It’s Only Getting Started,” Singularity Hub, 2023.

2024 is poised to be a milestone for technological advancements, especially in the healthcare industry. Leading the charge is the Food and Drug Administration (FDA), which is actively integrating innovative AI-driven technologies into the healthcare system. These advancements have the potential to bring significant changes in the medical care field.

A key breakthrough in this direction is the FDA’s approval of the Scoliosis Assessment app, developed by NSite Medical in collaboration with the National Scoliosis Clinic. This AI-powered application uses a mobile device camera to perform comprehensive 3D scans of a person's back, assessing spinal curvature. With high-accuracy detection in the FDA trials, the app has the potential to replace traditional diagnostic tools like scoliometers and visual assessments.

Dr. Michael J. Gardner, co-founder of NSite and a Stanford University professor, underscores the app’s potential to transform scoliosis treatment. By improving diagnostic accuracy and enabling early detection, the app paves the way for timely, nonsurgical interventions.

Additionally, the FDA has established the Digital Health Advisory Committee. This group is tasked with advising the FDA on a broad spectrum of digital health technologies, including AI, machine learning, augmented and virtual reality, and digital therapeutics. The committee, consisting of experts from various fields, aims to ensure a balance between rapid technological advancement and the critical aspects of patient safety and effectiveness.

Jeff Shuren, M.D., J.D., director of the FDA’s Center for Devices and Radiological Health, and Troy Tazbaz, director of the FDA’s Digital Health Center of Excellence, have emphasized the committee’s vital role in shaping the future of digital health. They view it as a key step in ensuring that digital health technologies contribute effectively to transforming care delivery and promoting health equity.

Impact and Looking Forward

The initiatives undertaken by the FDA in 2024 are more than just regulatory milestones; they signify a broader movement towards the incorporation of AI and digital technologies in healthcare. The Scoliosis Assessment app is a prime example of how AI can be used to enhance diagnostic accuracy and treatment through nonsurgical interventions. Similarly, the Digital Health Advisory Committee aims to facilitate a future in healthcare that is both predictive and personalized.

As we look to the future, these developments suggest a healthcare landscape where AI-driven tools and expert panels work together to ensure that technological advancements are effectively translated into real health benefits.

Sources:
US Food and Drug Administration Staff. “FDA Establishes New Advisory Committee on Digital Health Technologies,” FDA.gov, 2023.
Nancy Schimelpfening. “New Scoliosis App Could Improve Diagnosis and Treatments, What to Know,” Healthline, 2023.

As the cost of prescription medication has continued to increase, pharmacy benefit managers (PBMs) and drug manufacturers have faced increasing scrutiny from the government, pharmacy organizations and consumers. High drug prices are among Americans’ top healthcare complaints, and entities across the supply chain are under pressure to lower costs. The industry has begun to see companies willing to challenge the standard models in an effort to disrupt the current system and bring some cost relief.

The Mark Cuban Cost Plus Drug Company (Cost Plus Drug Co.) has been seen as one of the newest disrupters in the pharmacy industry since launching its online pharmacy in 2022. Traditional pharmacies are most often paid using a complicated system that is not directly based on what they spend to purchase the drugs. That model, which involves a multitiered network of insurers, drug manufacturers, PBMs and pharmacies, leads to ambiguity around fees and markups added to the original cost of a drug.

At Cost Plus Drug Co., generic medications are sold for the drug cost plus a 15% markup, a $5 pharmacy service fee, and a $5 shipping fee. When the Cost Plus Drug Co. first came out with their model, they were able to offer 100 generic drugs, and their selection grew to around 350 drugs in March 2023. By December 2023, the offering had expanded to over 2,000 generic medications. One limitation for some to use Cost Plus Drug Co. has been the ability to use their commercial insurance to pay for medications. Currently, they only accept prescription insurance for AffirmedRx, Archimedes, Capital Blue Cross, Drexi, MedOne, Oread Rx, PCA Rx, Rightway, RxPreferred, SGRX, SmithRx, VIVIO, and other select prescription plans. However, they plan on adding more insurance plans in 2024.

Pressure on PBMs to Offer Competitive Options

The pharmacy industry and consumers have taken notice of the potential cost savings available to them with a model like the one used by Cost Plus Drug Co. and have put pressure on other PBMs to offer a similarly competitive option. So far, two of the largest PBMs have announced plans for their own version of a “cost plus” model.

Express Scripts has announced a new pharmacy network option for 2024 that offers "cost plus" drug pricing for employers and health plans – ClearNetwork. With ClearNetwork, an employer would pay the estimated acquisition cost that the pharmacy pays for the medication, plus a flat fee for pharmacy dispensing and no more than 15% of the cost as a service fee. The model will cover all brand, specialty and generic medications on the employer’s formulary and will be offered to the 65,000 retail pharmacies in its network.

CVS has announced two new programs that are in the works for 2025: CVS CostVantage and CVS Caremark TrueCost. The CostVantage model will reimburse pharmacies based on the cost of a medication plus a small markup and a flat fee for dispensing. The CostVantage model will not directly affect members buying drugs at the pharmacy counter as the arrangement is between the pharmacy, the PBM and payors, including insurers and employers. CVS Caremark’s TrueCost will be a pricing model that offers pricing that will reflect the net cost of drugs, with transparency into administrative fees. Similar to the ESI ClearNetwork, TrueCost will base pharmacy reimbursement on acquisition costs.

Sources:
Annika Kim Constantino. “CVS to Change How It Prices Prescription Drugs with New Pharmacy Reimbursement Model,” CNBC, 2023.
CVS Health Staff. “CVS Health Highlights Path to Accelerating Long-Term Growth through Building a World of Health around Every Consumer,” CVS Health, 2023.
Susan Morse. “Express Scripts Announces New “Cost-Plus” Drug Pricing Model,” Healthcare Finance, 2023.
Cost Plus Drug Company

Weight Loss Medication for Children

Eli Lilly and Novo Nordisk, the pharmaceutical giants behind Ozempic and Mounjaro, are testing some of their most popular diabetes and weight loss drugs on patients as young as six. Both drug manufacturers are working on pediatric clinical trials for their new class of injectable GLP-1s. Lilly is planning to test tirzepatide, sold under the brand name Mounjaro, on children and teenagers between the ages of 10 and 18 with Type 2 diabetes who are overweight or clinically obese.

Novo Nordisk is also conducting a trial with its drug semaglutide, sold under brand names Ozempic and Wegovy. According to the US government registry, Novo Nordisk will analyze the effect semaglutide has on the body weight of patients between six and 18 years old who are obese or overweight.

Over the last two years, Novo Nordisk has been administering its GLP-1 drug called Saxenda to children between six and twelve years old who are considered obese. Saxenda contains the active ingredient liraglutide and requires administration once daily via subcutaneous injection. In addition to the administration of Saxenda, Novo Nordisk's pediatric trial has included discussions with children about "healthy food choices" and "how they can be more physically active," according to clinicaltrials.gov.

Novo Nordisk Expanding GLP-1 Production in Europe

Novo Nordisk announced in December that it will be investing $2.3 billion to expand drug manufacturing at its plant in Chartres, France. The project includes finished-drug production for products based on a glucagon-like peptide-1 (GLP-1) agonist, semaglutide, the active ingredient in both Ozempic and Wegovy. This comes after the company announced a $6 billion expansion at its plant in Kalundborg, Denmark, which makes GLP-1 products. The decision to grow these facilities comes after a period of failing to meet the market demands for Novo’s GLP-1 products. Both products, Wegovy and Ozempic, reported sales of $4.5 billion in the third quarter, a 37% increase over the same period last year.

Eli Lilly Helping Members Get Their Weight Loss Drugs

Eli Lilly recently announced the launch of its direct-to-patient portal, LillyDirect. The company’s new service relies on online pharmacy providers like Eversana and Truepill to deliver prescribed Lilly medicines. This was designed to allow people easier access to their medications for not only obesity but diabetes and migraine therapies as well.

LillyDirect currently supports 14 of the pharmaceutical company’s medicines, 12 of which are various formulations and types of insulin. Most notably, they offer Zenbound, which is FDA-approved for weight loss in November, and Lilly’s popular migraine medicine Emgality. The website provides access to telehealth services through which people can consult with an independent physician. If prescribed a Lilly medicine, LillyDirect is also meant to help patients have easier access to the company’s savings cards. Lilly itself isn’t providing telehealth services; instead, LillyDirect will connect patients with the telehealth provider Form Health.

Lily has confirmed there won’t be price discounts for any of the medications through their website. Patients will also still need to meet the criteria required for the weight loss drugs.

Roche Joins Weight Loss Drug Market With the Buyout of Carmot

Roche announced a deal to acquire US biotechnology company Carmot Therapeutics. Roche will pay $2.7 billion upfront for the Berkeley, California-based startup. The companies expect the acquisition to close this year.

Carmot specializes in obesity drugs, with a pipeline of weight loss drugs in early clinical testing. This deal will put Roche as another potential competitor to Eli Lilly and Novo Nordisk. The acquisition will bring three drugs in early testing to the Swiss company.

Of the three medications, two are in Phase 2 testing, and one is in Phase 1 testing. The two Carmot drugs in Phase 2 trials act similarly to Zenbound, acting on two insulin-boosting hormones called GLP-1 and GIP. One is aimed at people with or without Type 2 diabetes and is administered once weekly through a subcutaneous injection. The other Phase 2 medication is for Type 1 diabetics and is administered daily. The Phase 1 medication is an oral treatment for diabetics.

Roche claims all three could be “best in class.” The company also noted these drugs could potentially be used in tandem with their pipeline of muscle-preserving drugs, as well as promising other uses treating eye or brain diseases. In a note to investors, Jefferies analyst Peter Welford stated that Roche management “foresees a fragmented obesity market, with muscle strength, not just lean mass preservation, as a key opportunity.”

Sources:
Ben Fidler. “Roche Joins Obesity Drug Chase with $2.7B Deal for Startup Carmot,” BioPharma Dive, 2023.
Carmot Pipeline Overview
Kathleen Doheny. “Eli Lilly Offers Obesity Drug Directly to Consumers,” Medscape, 2024.
Berkeley Lovelace Jr., Maggie Vespa and Jessica Herzberg. “Eli Lilly Launches Website to Help Patients Get Weight Loss Drugs,” NBC News, 2024.
Ned Pagliarulo. “Lilly Launches Online Service for Home Delivery of Weight Loss Drug,” BioPharma Dive, 2024.
US National Library of Medicine. “A Research Study on How Well Semaglutide Helps Children and Teenagers with Excess Body Weight Lose Weight,” ClinicalTrials.gov, 2023.
Rick Mullin. “Novo Nordisk to Expand GLP-1 Production in France,” Chemical & Engineering News (C&EN), 2023.
Novo Nordisk Staff Press Release. “Novo Nordisk Invests More than 42 Billion Danish Kroner in Expansion of Manufacturing Facilities in Kalundborg, Denmark,” Novo Nordisk, 2023.
Delilah Alvarado. “Novo to Expand French Plant in GLP-1 Production Push,” BioPharma Dive, 2023.
Hilary Brueck. “Weight-Loss Drugs for First-Graders? Eli Lilly Is Testing Mounjaro Shots on Kids as Young as 6,” Business Insider, 2023.
Daniella Genovese. “Eli Lilly, Novo Nordisk Test Popular Weight Loss-Related Drugs on Children,” Fox Business, 2023.