CVS Struggles to Compete with Humira's Rivals

CVS Health Corp. is still deciding on its approach to covering Humira, one of the world's best-selling drugs, as a competing version is set to hit the market at the end of this month. As the largest prescription benefits provider in the US, CVS's decision could have a significant impact on the availability and cost of this important medication.

The decision could have a huge impact on AbbVie Inc., the company that makes the anti-inflammatory injection Humira. Its rivals, such as Amgen Inc., who are hoping to replace Humira with similar drugs called biosimilars, will also be affected.

CVS says it will make its decision based on what delivers the best cost to clients, but that's a complicated calculation. Makers of brand-name medicines typically offer rebates and discounts to undercut the price savings from copycat drugs. In the case of Humira, this is even more complicated because doctors and patients may be hesitant to switch to biosimilars.

"Our goal is to provide the lowest net cost for our customers," said Alan Lotvin, president of CVS Caremark, the company's pharmacy-benefits division.

CVS will take into account the unit price of the drugs after any discounts or rebates, as well as projections for how many patients will switch therapies if biosimilars end up costing less, Lotvin said in an interview. He added that the company will also consider the potential impact of biosimilars on patient outcomes and satisfaction.

If a drug plan pays a higher price for the original product because it adds a competing therapy, total costs could rise if few patients migrate to the less expensive choice, said the source.

AbbVie has vowed to ensure that Humira, its best-selling drug, remains accessible. Amgen's Amjevita is set to launch in the US at the end of January. More biosimilars for Humira are expected later this year.

CVS manages prescription benefits for more than 110 million people. «The company's earnings are expected to be boosted by biosimilars,» Lotvin said.

Both UnitedHealth Group Inc. and Cigna Corp. have announced that they will be adding biosimilars to their approved medication lists, known as formularies. The biosimilars will be treated the same as Humira, meaning that the companies will not incentivize patients to use one over the other.

Biosimilars are not exact copies of the complex biologic drugs they are meant to compete with. They may differ slightly in ingredients or how they are administered. Humira, for example, is given by self-injection.

Lotvin said that one variable that can influence the adoption of biosimilars is whether they have devices that make them easy for patients to administer. Another consideration is whether the drugs contain the chemical citrate, which is linked to pain after the injection. These details can influence whether patients and doctors will switch to alternatives, and they are part of CVS's assessment of the new options.

Pharmacy-benefit managers negotiate discounts with drug manufacturers in exchange for placing their products on preferred formularies. This can steer patients towards certain medications and away from others. These incentives have sparked criticism, though drug plans say the savings are passed along to clients.

Lotvin said that they will be looking for ways to help biosimilar manufacturers be successful and make a return on their investment, while also reducing costs for customers. He added that if no one is successful in selling alternatives to Humira, it will be a real challenge.

CVS has several formularies for various types of prescription plans, and Lotvin said the company might adopt different strategies for biosimilars in different plans. That approach may change throughout 2023 and 2024 as the company gains more experience with biosimilars and sees how they are used by patients.

"We'll have plenty of time for discussion, negotiation and decision-making," he said.