Key Developments from AMCP 2023 on Blockbuster Generics, Diabetes Drugs, PBM Legislation, and More

A wave of blockbuster generic drugs launches, new brand drugs that address unmet needs, and legislation that would bring transparency to the pharmacy benefit manager (PBM) industry are just some of the developments that managed care pharmacy leaders are watching closely this year.

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By Peter Sonnenreich | Original Article

Jeff Casberg, MS, RPh, Senior Vice President of Clinical Pharmacy at IPD Analytics, a managed care and pharmaceutical consultancy, highlighted a wide range of 2023 key events that will affect managed care professionals by the end of the year. He made his comments at the Academy of Managed Care Pharmacy’s (AMCP) annual meeting, held March 21-24, 2023, in San Antonio, Texas.

Generic Drug Launches

This year could see up to 50 generic drug approvals on brand pharmaceuticals worth more than $20 billion in sales, Casberg noted.

“The first big one that’s launched already is Latuda (lurasidone) from Sunovion, a product in the schizophrenia and bipolar category,” Casberg explained of the oral therapy that generated $4.5 billion in sales. Latuda lost exclusivity in February, and 11 generics are eyeing the brand product that cost roughly $17,000 a year. “This is a big one,” he added. “Cost could go down by 70%, 80%, or even 90% very quickly.”

Another generic launch that payers are watching closely is the hospital-administered nuclear contrasting agent Lexiscan (regadenoson, solution intravenous) from Astellas. The product had sales of roughly $800 million per year. With more than 10 generics set to enter the market in 2023, costs are again expected to come down quickly. “This is a big opportunity for payers and hospital systems,” Casberg said.

Still another important generic launch will take on the multiple sclerosis drug Aubagio (teriflunomide) by Sanofi Pharmaceuticals. The drug generated $2 billion in sales last year. “We’re looking at 15 or more generic entrants on this product,” Casberg said, noting the first generic came out in March.

Attention deficit hyperactivity disorder (ADHD) drug Vyvanse (lisdexamfetamine dimesylate), manufactured by Takeda, also is facing generic competition. Vyvanse is one of the largest selling products in the ADHD category, generating $5 billion for Takeda. “This could actually have double importance because of the drug shortages going on in ADHD market,” Casberg said of the generic launch. “The six entrants launched in August could help resolve some of the shortages in ADHD.”

Two significant ophthalmic drugs also are going generic. The first one is the glaucoma drug Alphagan-P (brimonidine tartrate), which has sales of about $250 million. This product is expected to have three generic launches in 2023. The second ophthalmic drug is the post cataract surgery medication Prolensa (benzalkonium chloride) by Bausch + Lomb. This one is expected to have nine generic competitors this year, Casberg said. In addition, two therapies also are going generic in the respiratory and chronic obstructive pulmonary disease (COPD) categories.

The first one is Organon’s Dulera (mometasone/formoterol), which generated sales of roughly $500 million per year and competes with Advair and Symbicort. Dulera could lose exclusivity in 2023, Casberg explained, but it may only have one generic competitor this year, meaning the price may not drop very quickly. “In the respiratory area with inhalers, it’s tough to get drugs approved, so the competition comes slowly,” he said.

The next product is Boehringer Ingelheim’s Spiriva (tiotropium bromide), which generated roughly $1.5 billion in annual sales, and has been one of the biggest products in the respiratory and COPD category for many years. Similar to Dulera, the product may have only one generic competitor this year.

Overactive bladder (OAB) is the final category primped for significant generic competition in 2023, Casberg said. In this area, Astellas’ urology drug Myrbetriq (mirabegron ER tablets) is set to go generic. A generic here will improve access in OAB to a product with less side effects, which is especially important in the elderly population, Casberg noted.

505(b)(2)s Pathway Brings New Naloxone Products

In other pipeline developments, the FDA’s 505(b)(2) pathway could open the doors in 2023 for products in several important drug categories: naloxone and epinephrine, which address overdosing and allergic reactions.

The 505(b)(2) New Drug Application process is a streamlined approval pathway for manufacturers to submit new drug applications. Under the pathway, manufacturers can use safety and efficacy data from existing products in their applications for their own products. This pathway is being used to produce more naloxone products, which reverse opioid overdoses.

In March, the FDA approved several new naloxone products using the pathway, including one from Amphastar, which will compete with other intranasal on the market. Another naloxone product is over-the-counter (OTC) Narcan by Emergent Biosciences. This is the first OTC naloxone product. A subsequent OTC product, RiVive (intranasal 3-mg), was granted approval to Harm Reduction Therapeutics. The company says it will produce two million doses a year and give away half of them for free, while the rest will be sold at roughly $18 per dose.

The fourth naloxone product is Orexo’s OX124 (high-dose naloxone), which could receive approval in the fourth quarter of 2023. This product would be a more potent prescription version than the OTCs, Casberg notes.

One other important product that is using the 505(b)(2)s pathway is the nasal spray neffy (epinephrine), which is used for emergency treatments of allergic reactions. The product, manufactured by ARS Pharma and Neurelis Pharma, would be the first needle-free epinephrine alternative to autoinjectors, such as the EpiPen.

Diabetes and Weight-Loss Drugs

Another big development that payers in 2023 will be watching closely is the arrival of more glucagon-like peptide-1 (GLP-1) therapies indicated for diabetes, but often used for weight loss.

“In the world of health plans and payers, the GLP-1s have become a big expense,” Casberg says.

The latest GLP-1 entrant is Mounjaro, which joins the already popular Ozempic and Trulicity. “There are predictions that Mounjaro, the newest of the three big ones, will be the first $100-billion-dollar drug,” Casberg says. “Putting that in perspective, Humira was the largest selling drug of all time today, and Humira sells about $25 billion per year.”

Casberg notes that only about 25% of commercial payers have some type of pharmaceutical coverage for weight loss.

“Payers are looking to manage this utilization and by putting in prior authorization, putting in edits for diabetes diagnosis and edits that look for a type 2 diabetes drug in their profile over the last three to six months,” he explains. “Payers are really looking to control the use to make sure that these drugs are being used for type 2 diabetes and not weight loss.”

“Because of the increased use in weight loss for the existing GLP-1 products, even the type 2 diabetics can’t get the drug because there’s just too many people that are trying to get on it for the weight loss side,” he says.

Capitol Hill Watch: Legislation on PBMs

Pharmaceuticals are not the only things on the minds of payers and PBMs these days. A crucial issue for them is what’s taking place on Capitol Hill, including fallout of the Inflation Reduction Act (IRA) that was signed into law last year.

Among the IRA’s provisions are those allowing price negotiations of certain drugs under Medicare Part D, as well as measures to redesign the Part D plans themselves. Casberg said his company is getting many queries from payers and PBMs about these issues.

The impact of the IRA’s price negotiations on payers is mixed, he noted. Starting in 2026, the provision will affect 10 Part D drugs. This increases to 15 Part D drugs in 2026, as well as 15 Part B and D drugs in 2028, and a full 20 Part B and D drugs in 2029.

For Medicare payers, the IRA will likely affect rebates on selected drugs and require changes in formulary strategies. The IRA doesn’t make any requirements on PBM tiering and utilization management programs. Still, the law may impact claim operations and network contracts, Casberg noted.

Commercial payers will likely see no direct impact, but it may affect commercial rebates with new price points for negotiations. Under the IRA provision, manufacturers may be less willing to negotiate for commercial books of business, he said.

Another crucial piece of legislation is the American Rescue Plan Act (ARPA), which among other things addresses the cap on Medicaid rebates on drug average manufacturer prices (AMPs).

Prior to ARPA, Medicaid rebates were capped at 100% of AMP, and total rebates could not exceed 100% of AMP. In 2024, ARPA removes the 100% AMP cap. Categories likely impacted include insulins and respiratory inhalers.

Commercial payer contracts and rebates are expected to be most impacted. “The result is that manufacturers could end up having to pay Medicaid plans to dispense their drugs,” Casberg said. “They’d actually be providing more rebate than the cost of the drug. There’s real concern for certain manufacturers about this ARPA and implantation of removal of this rebate cap.”

Other bills that get people talking are those requiring PBM reforms. Casberg said quite a few pieces of PBM legislation are focusing on transparency and access to generics. “You can hardly not read about the PBM reforms right now,” he added.