Each month, we round up the latest FDA approvals and regulations to give you an expert take on what you need to know.
Novel Hepatitis C Cost Containment Program Launching in Louisiana
The State of Louisiana has partnered with Asegua Therapeutics (a subsidiary of Gilead) to control their spend for Hepatitis C treatments. They have signed a 5-year contract to have unlimited access to the authorized generic version of Epclusa. It is basically a subscription plan where the state can have access to as much of the medication as they need within the 5-year window. The state’s goal is to treat 10,000+ patients for less than $35 million per year.
If you remember when Gilead launched their Hepatitis C drugs in 2014, they were charging $1,000 per pill and the full course of treatment was around $84,000 per patient. This new subscription agreement is a significant savings at only $3,500 (or less) per patient for the entire treatment course.
Louisiana expects to have this contract in place by June 1st, with the official start of the subscription model a month later on July 1st.
Lilly Launches an Authorized Generic Insulin
Eli Lilly launched an authorized generic version of its Humalog insulin this month. The lower-priced version will be called Insulin Lispro and is expected to be half the price of brand Humalog. The list price of Insulin Lispro single vials will be $137.35 and a five-pack of Insulin Lispro KwikPens will be $265.20.
While the new authorized generic will bring some price relief to cash paying patients and those with high-deductible plans, do not expect all PBMs to add the new authorized generics to the formulary. Typically, authorized generics are treated like brands and their formulary placement will be determined by a net prices (after rebates) comparison against existing brands. If Lilly offers rebates for Humalog similar to the authorized generic discount, the authorized generic may not be the lowest net-cost product for plan sponsors. In this case, you can expect to see Humalog in a preferred tier position over the authorized generic.
FDA Approves a New Generic of Diovan After Drug Recall
The FDA has approved a new generic of Diovan (valsartan), an angiotensin II receptor blocker (ARB) that treats high blood pressure and heart failure. After multiple recalls of generic valsartan products (and other generic blood pressure medications) from several manufacturers, the FDA has started prioritizing the review of ARB applications to help mitigate the shortage of valsartan.
The recalls were triggered when the FDA discovered the products were contaminated with nitrosamine impurities. The FDA has committed to continue to work with manufacturers to approve more medicines like valsartan (ARBs) that are free of nitrosamine impurities and to provide relief to those impacted by this ongoing shortage. This shortage has been ongoing since the summer of 2018.
In the meantime, with reduced competition, we can expect to see higher costs for treating high blood pressure and heart disease. Plan sponsors should not be surprised to see a bump in their drug spend as patients are switched to either brand medications or higher cost generics.