Memorandum

CVS Health award exclusive formulary contract to Amgen’s Repatha (evolocumab) for 2016 – November 23, 2015

CVS Health announced this morning that it has awarded an exclusive formulary contract to Amgen’s PCSK9 inhibitor Repatha (evolocumab) for 2016. Sanofi’s PCSK9 inhibitor Praluent (alirocumab) is not included on the formulary. In its announcement, CVS shared that an exclusive formulary contract allowed the company to get the lowest possible price for the drug class. CVS continues to recommend utilization management strategies, such as starting all potential patients on statins first, to manage costs of covering these expensive drugs (a year’s supply of Repatha costs about $14,100 per patient). CVS Health is the second-largest pharmacy benefits manager (PBM) in the US, after Express Scripts, and the exclusion of Praluent would be quite negative for Sanofi (although we don’t expect sales of the class to expand dramatically until after the CVOTs are over). Up until this point, as we understand it, Sanofi and Amgen were on fairly equal footing in the PCSK9 arena. Express Scripts announced last month that it would cover both Repatha and Praluent equally, albeit with a fairly intensive clinical documentation process to determine patient eligibility for the products, which is unsurprising. Sanofi noted in its 3Q15 update that it is still waiting on a coverage decision from another major PBM, UnitedHealthcare. Reimbursement is key for this very expensive drug class and, after the first two payer negotiation showdowns, it seems that Repatha is coming out slightly ahead of Praluent. Sanofi appears to be positioning Praluent to headline its new combined Diabetes and Cardiovascular business unit, so sluggish sales due to poor access would be disappointing though we think this is just the beginning ... millions of patients annually have problems with statins although proving this will sometimes be complicated – we are eager to see how this class evolves since we believe millions of patients with diabetes will ultimately be able to benefit.