the health strategist
institute for
strategic health transformation
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Joaquim Cardoso MSc.
Chief Research and Strategy Officer (CRSO),
Chief Editor and Senior Advisor
August 29, 2023
What is the message?
The article, published by CNBC, highlights CVS Health’s collaboration with Sandoz to develop a cost-effective alternative to the arthritis drug Humira through the creation of a biosimilar.
This move is part of CVS’s strategy to strengthen its presence in the biosimilars market, aiming to offer a near-identical version of Humira at a price more than 80% lower.
The partnership showcases CVS’s commitment to securing a reliable supply of biosimilar drugs, addressing affordability concerns and positioning itself strategically in the evolving pharmaceutical landscape.
One page summary:
CVS Health has joined forces with Sandoz, a subsidiary of Novartis, to develop a near-identical version of the widely-used arthritis treatment Humira.
This strategic move is aligned with CVS’s new venture, focusing on the creation and procurement of biosimilar drugs, which function as analogous alternatives to complex biologic therapies. The collaboration aims to provide a solution that significantly undercuts the current price of Humira by over 80%.
Prem Shah, CVS Health’s EVP and Chief of Pharmacy, emphasized the commitment to ensure a stable supply and launch a high-quality biosimilar product at a substantially reduced cost compared to the original Humira.
To facilitate this endeavor, CVS has established a subsidiary named Cordavis, tasked with securing the supply of new biosimilar drugs, in partnership with Novartis Pharmaceuticals’ generic manufacturing unit, Sandoz.
While CVS is already a prominent player in generic drug sourcing through its joint venture Red Oak with Cardinal Health, this move is aimed at solidifying its presence in the burgeoning biosimilars market, which is projected to reach $100 billion in the coming six years.
The introduced biosimilar, named Hyromiz, is anticipated to launch in the first quarter of 2024, bearing a list price more than 80% lower than AbbVie’s Humira.
Notably, this move comes amidst an evolving landscape where demand for biosimilars is growing, leading to new dynamics in payer behavior and coverage negotiations with health insurers.
Despite recent developments such as CVS being dropped as a pharmacy benefits manager by Blue Shield of California, analysts like John Ransom of Raymond James view the subsequent stock price drop as unwarranted.
They assert that CVS’s position in the current biosimilar market remains relatively secure due to substantial rebates from manufacturers and competitive discounts, factors that limit the impact of potential newcomers.
In summary, CVS’s partnership with Sandoz to produce an affordable Humira biosimilar reflects the company’s strategic positioning in the rapidly expanding biosimilars sector, aiming to provide cost-effective alternatives to complex biologic therapies while navigating the evolving landscape of pharmaceutical markets and payer dynamics.
DEEP DIVE
This summary was written based on the article “CVS pushes into making cheaper versions of complex grugs with new discount Humira”, published by CNBC, on August 23, 2023.
To read the full article, access https://www.cnbc.com/2023/08/23/cvs-health-sandoz-humira-biosimilar.html.
