After an approval late last year for its next big diabetes offering, Novo Nordisk has secured 2018 formulary coverage from leading U.S. pharmacy benefit manager Express Scripts. The decision gives millions of Type 2 diabetes patients with commercial insurance access to Novo's Ozempic in the early stages of the launch.
A spokesperson for the drugmaker confirmed that the GLP-1 drug "has a temporary unrestricted position at highest branded copay on ESI’s national drug formulary." She declined to provide further details as the company's negotiations with payers are confidential.
Ozempic, a once-weekly injection, won FDA backing in December based on data showing it can reduce HbA1c levels compared to placebo, Merck's Januvia, AstraZeneca's Bydureon and Sanofi's Lantus. Data also showed it can help patients lose weight.
Furthermore, the drug has head-to-head data against Eli Lilly's Trulicity showing it delivered better reductions in blood sugar and double the weight loss.
On the market, Novo's drug will compete against GLP-1 rivals Trulicity and Bydureon.
Analysts have big expectations for the drug, a follow-up to Victoza. Market intelligence firm Evaluate recently predicted it will generate $2.2 billion in 2022.
Some patients are expected to switch from Novo's own Victoza. A spokesperson said Novo priced the drug "at parity" with other GLP-1 drugs. Reuters has reported it costs $676 per prescription before discounts.
The formulary placement is a positive development for Novo's launch at an important time. For years, payer hardball has taken a significant toll on the diabetes field as payers use pharma competition to their advantage.
For an example of how drugmakers fare when formulary decisions don't go their way, look to Sanofi's 2017 results. Last year, the drugmaker reported diabetes sales that were down 22.8% in the U.S., largely due to exclusions from CVS Health and UnitedHealth.
In addition to choosing not to cover certain medications in competitive classes, payers also negotiate for bigger discounts in competitive fields such as diabetes.
Ozempic's formulary coverage isn't the only positive development for Novo's drug this week. On Thursday, the drugmaker announced that three dosage strengths of the oral version beat placebo in reducing HbA1C levels in a phase 3 trial. Novo's chief scientific officer Mads Krogsgaard Thomsen said the company plans a regulatory submission next year.