It’s that time of the year once again. The major pharmacy benefits managers are making changes to their formularies for 2021, and one of the biggest—Express Scripts—is sending a strong signal about just how much of a difference discounting can make.
Express Scripts is axing three major drugs from its formulary for 2021, most notably Novartis’ psoriasis drug Cosentyx. In its place is Eli Lilly’s rival Taltz, which interestingly, the PBM had excluded from its 2020 version. Express Scripts also lists (PDF) AbbVie’s new psoriasis treatment Skyrizi as a “preferred alternative” to Cosentyx, along with several older anti-inflammatories.
Swapping out Cosentyx for Taltz marks “a first case of ‘annual switching’ for better pricing in the antibody market,” said Bernstein analyst Ronny Gal and colleagues in a note to investors. The change “strongly suggests that prices in the immunology market, especially the dermatology side, will continue to be under pressure.”
The battle for market share in psoriasis has been heating up of late, and formulary changes will only intensify the rivalries. Cosentyx and Taltz are IL-17 inhibitors, while Skyrizi inhibits IL-23. AbbVie recently turned heads with data from a head-to-head phase 3 trial showing that Skyrizi produced clear skin in 66% of patients after four months, while just 40% of people treated with Cosentyx saw their psoriasis disappear in that time.
Express Scripts’ new formulary provides AbbVie with another leg up—this one in oncology. The 2021 list excludes AstraZeneca’s BTK inhibitor Calquence but includes AbbVie and Johnson & Johnson’s rival drug Imbruvica. Calquence was late to the BTK market, and AstraZeneca has tried to differentiate it by arguing “somewhat better safety,” Gal wrote.
And AstraZeneca has tried its best to elbow its way onto AbbVie’s and J&J’s turf. Late last year, the FDA cleared Calquence to treat newly diagnosed chronic lymphocytic leukemia (CLL). The approval was boosted by impressive survival numbers: 93% of CLL patients taking Calquence with Roche’s Gazvya in a phase 3 trial did not see their disease progress in two years.
Even so, Calquence has so far failed to make a huge dent in Imbruvica’s haul, which was over $7 billion in sales last year. But oncologists are starting to embrace the AZ drug, Gal pointed out, and whether the Express Scripts exclusion will hamper its launch remains to be seen. “This would thus be a good ‘test case’ for the ability of payers to demand preference in oncology,” Gal wrote.
The third notable exclusion from Express Script’s 2021 formulary is Regeneron and Sanofi’s cholesterol med Praluent. The PCSK9 inhibitor has been at war with Amgen’s Repatha for years.
CVS threw Repatha off its 2020 formulary in July and is only covering Praluent. Express Script’s opposite decision indicates “we have a two-player market going single-source,” Gal wrote. He added that he wouldn’t be surprised if all of the other major PBMs choose only one PCSK9 inhibitor for their formularies.
The result? The price point for PCSK9 inhibitors could end up at $3,000—a far cry from the more than $14,000 a year that both players initially charged.
And the single-source approach to covering PCSK9 inhibitors “raises the bar” for Novartis, Gal added. The Swiss drugmaker acquired its PCSK9 candidate inclisiran in its $9.7 billion acquisition of the Medicines Company last year, and analysts have pegged its potential sales at more than $1.5 billion in 2024. That’s largely because it's designed to be dosed twice a year, versus every two weeks or monthly for the existing players.
In March, Novartis posted data from two phase 3 inclisiran trials showing a 50% reduction in LDL cholesterol levels, making the drug potentially competitive with Repatha and Praluent when it comes to efficacy. But whether Novartis will be willing to discount the drug enough to get it onto major insurance formularies remains to be seen.