CVS Health will no longer cover Thousand Oaks-based Amgen’s Neupogen on its standard drug plan in 2017, favoring the biosimilar Zarxio from Novartis.
CVS, which is the second largest benefits manager behind Express Scripts and also owns the largest chain of drug stores in the U.S., said Aug. 2 it will choose biosimilar drugs over their name brand counterparts next year in an effort to lower costs and add 35 drugs to its list of excluded drugs in 2017.
Neupogen boosts white blood cell counts in chemotherapy patients and other patients with compromised immune systems. Last year, Neupogen had sales of about $1 billion worldwide and $793 million in the U.S.
In March 2015, Zarxio became the first biosimilar approved for marketing and use in the U.S. by the Food and Drug Administration. Amgen sued Novartis to block Zarxio’s debut on the U.S. market but an appeals court said in September that Novartis could sell the drug.
Biosimilars are similar to generic drugs, but are made with living organisms and aren’t identical to the complex compounds they replicate. Because the compounds are not identical, extensive testing must still take place to ensure their safety, which does not lower the cost of the drugs as much as generics.
The cost savings on biosimilars is only 15 to 30 percent, but with drugs often costing tens of thousands of dollars per year for treatments, it’s enough to catch the attention of pharmacy benefits managers.
“In situations where the medications are equivalent, from a medical point of view it makes sense to do this in order to reduce cost,” Troyen Brennan, CVS’s chief medical officer, told Bloomberg News. “The coverage exclusions will only apply to new patients, meaning that people already taking excluded cancer drugs can keep doing so.”
He added, “We are trying to endorse the use of biosimilars. They have real possibility of helping us control costs.”
Amgen said in an e-mailed statement that it “feels strongly that Neupogen is competitively priced based on its clinical and economic value.”
Amgen also sees the potential of biosimilars for its bottom line. The company is currently developing six biosimilars treating various cancers, Crohn’s Disease and Rheumatoid Arthritis among other diseases. On July 12 an FDA committee recommended approval of Amgen’s first biosimilar.
• Bloomberg News contributed to this report. Contact Philip Joens at [email protected]