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CVS Health is partnering with drugmaker Sandoz to provide a near an identical version of the blockbuster arthritis treatment Humira that may sell for 80% below the value of the brand-named drug.
The move is a component of the corporate’s recent enterprise focused on securing, and in some cases co-producing, biosimilar drugs, that are the equivalent of generic versions of complex gene or protein-based therapies referred to as biologics.
“We have invested in committing to certain volumes for the U.S. marketplace in order that we’ve a durable supply of product. We wish to be sure that once we bring this into the U.S. marketplace, we haven’t any supply issues, we’ve a high-quality biosimilar product available, and it will be launched at a much lower … price than the originator molecule that exists,” said Prem Shah, CVS Health EVP and chief of pharmacy.
CVS is already one among the leading players on the subject of sourcing generic drugs through Red Oak, its three way partnership with Cardinal Health. However it’s trying to strengthen its foothold within the biosimilars market, which is predicted to grow to $100 billion over the following six years.
The corporate said Wednesday it’s launching a recent subsidiary called Cordavis, which is able to concentrate on securing supply of the brand new biosimilar drugs and can partner with Novartis Pharmaceuticals‘ generic manufacturing unit, Sandoz.
Sandoz, currently a unit of Novartis, is expected to be spun off as an independent publicly traded firm later this 12 months.
CVS didn’t disclose the terms of the agreement for the brand new biosimilar, trademarked Hyromiz.
The corporate pledges that the list price of Cordavis Hyromiz shall be greater than 80% lower than the present list price of Humira, which is made by drugmaker Abbvie. It’ll launch in the primary quarter of 2024.
The primary FDA-approved biosimilar for Humira, Amgen’s Amjevita, went on sale in January. Eight more biosimilars are expected to come back online inside the following 12 months, including Hyromiz.
Amgen executives have said demand for the corporate’s biologic appears to be growing, but that securing coverage from health insurers has posed a challenge.
“We’re obviously very early innings still on this biosimilar market with Amjevita. And we’re seeing clearly what’s recent payer behavior in light of such a big product having biosimilar competition,” said Murdo Gordon, Amgen EVP of economic operations, on the corporate’s second-quarter earnings call. “The clarity of how pharmacy profit works with biosimilar uptake, or lack thereof, is becoming clear to us and to other biosimilar manufacturers and other onlookers.”
Abbvie reported greater than $4 billion in Humira sales in its most up-to-date quarter, which was barely higher than expected. The corporate says it continues to be offered on health insurer plans at parity with the brand new biosimilars.
The launch of Cordavis has long been within the works, before the news last week from Blue Shield of California that it was dropping CVS as its pharmacy advantages manager and switching to Mark Cuban’s Cost Plus Drug Company, Amazon Pharmacy and others in an effort to avoid wasting on drug costs.
The news sent CVS shares plunging, but analysts like John Ransom of Raymond James say the selloff was overblown.
At this point, the potential threat from upstarts shouldn’t be as big as some might fear, especially on the subject of the present biosimilar marketplace for drugs like Humira, Ransom said.
“They either get a giant rebate from Abbvie, or they get a giant discount from one among the competing biosimilar manufacturers. And that is really where they’ve the advantage,” said Ransom.
Cuban’s Cost Plus doesn’t have the size to purchase generic or enough shelf space from the manufacturers, he said.
Correction: CVS Health subsidiary Cordavis will partner with Sandoz on biosimilar drugs. An earlier version mischaracterized the connection.