Memorandum

GLP-1 Ozempic temporarily secures spot on 2018 Express Scripts formulary (for part of year), but with higher copay vs. Trulicity, Bydureon – March 1, 2018

Novo Nordisk has secured “temporary unrestricted [positioning] at highest branded copay” for GLP-1 agonist Ozempic (semaglutide) on the Express Scripts national formulary for 2018. Currently, Express Scripts excludes Novo Nordisk’s Victoza (liraglutide) and Sanofi’s Adlyxin (lixisenatide), while Lilly’s Trulicity (dulaglutide) and AZ’s Bydureon and Byetta (exenatide) are tier 2, preferred brand drugs. Ozempic has been given tier 3, non-preferred brand status. To our understanding, this means that Ozempic will have a higher copay than Trulicity and Bydureon, but will still be covered, unlike Victoza.

This is the first update we’ve heard on Ozempic’s reimbursement status following US launch in early February. Given that the product was FDA-approved late last year, after most payer negotiations for 2018 had wrapped, there were some concerns that Ozempic might not be well-reimbursed – and therefore wouldn’t take off in terms of prescription volume – until 2019. We see it as a win for patients that Ozempic will be covered this year for millions of Americans under Express Scripts (the PBM manages plans for 83 million people, though not all are covered by the national formulary).

That said, it’s important to note that Trulicity and Bydureon will still be more affordable (lower copay) for Express Scripts’ patients, and cost dictates treatment decisions for so many people with diabetes.

At our local CVS, a one-month supply of Ozempic is listed at ~$799 – exactly the same as Trulicity’s list price and slightly higher than Bydureon’s $784/month. With near-equivalent list prices, rebates will impact profitability, and formulary access could depend on how much Novo Nordisk, Lilly, and AZ are each willing to compromise with PBMs/payers on rebate size.

In our ideal world, preferred status would be shared, much like the current setup with Trulicity and Bydureon. This maximizes patient choice, and indeed, ADA issued a statement of concern last year regarding the choice-limiting practices of PBMs. We see more than enough room for all of these GLP-1 products to be commercially successful. We view the variety of options as a real opportunity for more personalized diabetes care. For example, while Ozempic showed superior A1c-lowering and weight loss vs. Trulicity in SUSTAIN 7, Trulicity’s autoinjector will be more attractive to some patients (and indeed, the IDEO-designed pen has received much positive feedback because the needle isn’t seen). We hope to hear more on preferences from dQ&A over time; for more information and insights, please contact Richard Wood or Sophie Koontz.

 

-- by Ann Carracher, Payal Marathe, and Kelly Close