Watch out, Glaxo: Advair is Express Scripts' next big cost-savings target

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An Express Scripts VP said on Monday the pharmacy benefit manager giant is targeting GSK's Advair for future savings.

WASHINGTON, D.C.—Leading pharmacy benefits manager Express Scripts made waves back in 2015 when it struck an exclusive deal with AbbVie in hep C, cutting out Gilead’s costly but effective Sovaldi and Harvoni. Now, asked about which therapeutic areas the PBM might target for savings next, an exec said Express Scripts is looking at GlaxoSmithKline’s big-selling Advair.

Speaking at the Pharmaceutical Care Management Association’s annual PBM Policy Forum on Monday, Amy Bricker, Express Scripts VP of supply chain strategy and product development, said the company’s clients are “clamoring for reprieve” from high Advair costs.

With generics to the blockbuster asthma and COPD inhaler on their way, Bricker said Express Scripts has an “opportunity for the first time in a very long time to ... drive competition in the category and we are excited about the possibilities.”

Related: Glaxo serves up 20% payer discounts on Advair to soften generic blow

On Advair, Bricker’s comments contrast somewhat with those made by execs at GlaxoSmithKline. For its part, GSK management has argued that a great deal of payer pressure has already mimicked the effects of generics on the blockbuster, with PBMs have forcing the company to offer up big discounts in order to keep its formulary positioning. For years, former CEO Andrew Witty has contended that the genericization of the company’s top seller “is not going to be normal.”

Still, Glaxo acknowledges that there's room for copycats to do some damage. If one hits midyear, the company predicts the behemoth drug will post £1 billion ($1.26 billion) in U.S. sales, compared with the £1.83 billion ($2.3 billion) in generated in 2016.

Whether that happens, though, remains to be seen. So far, Mylan has already suffered a setback with its Advair copycat, but Jordan's Hikma--which has an FDA decision date coming up later this month--and Novartis' Sandoz are also in the fold. 

Related: Pressuring GSK's Advair, Teva launches both AirDuo RespiClick and authorized generic

Plus, Teva has launched its newly approved AirDuo RespiClick and an authorized generic, which aren’t exact copies to the GSK brand, but do contain the same active ingredients.

With the launch of its authorized generic, Teva is introducing a cheaper competitor to Advair, Evercore ISI analyst Umer Raffat wrote at the time of Teva’s announcement. The Israeli pharma’s authorized generic is priced at a 69% to 81% discount to Advair, depending on price, and Raffat said it’ll be a “very important launch” for Teva.

But GSK points out that the Teva product isn't directly substitutable for Advair "as they are not considered therapeutically equivalent," according to a spokesperson. Teva's authorized generic also doesn't have an approval in COPD.

“Advair’s net sales have fallen considerably in recent years, driven heavily by competition in the drug class, and also increased negotiating power of payers through consolidation," a GSK spokesperson said. "In working with payers, our goal is always to secure the broadest access possible to important treatment options and as a result of our negotiations, the average out of pocket cost for patients using our retail respiratory products was $28 in 2016.”

Express Scripts has grown more and more active on the formulary management front over the past few years, and there's proof its tactics are working. In 2015, as payers lamented the prices for Gilead’s new hep C cures, Express Scripts stiff-armed Gilead and cut a deal with AbbVie to buy Viekira Pak at a discount. The PBM later took credit for billions in savings realized by payers thanks to its tactic. More recently, late last year, Gilead and Express Scripts came together for a deal that the drug purchaser said featured “better pricing.”

Related: Express Scripts bars new launches from Lilly, Merck and shuts out Novo for 2017

Meds affected by Express Scripts maneuvering also include Novo Nordisk’s blockbuster GLP-1 diabetes drug Victoza and two of its top-selling insulins, as well as new Eli Lilly psoriasis-fighter Taltz. They're among the 85 products Express Scripts excluded for 2017.