- Glumetza won't be covered when generic Metformin launches
- Express Scripts says Valeant encourages use of high-cost drugs
Express Scripts Holding Co. is sharpening its fight against drugmaker Valeant Pharmaceuticals International Inc., in the latest turn between the two key protagonists in an ongoing U.S. debate over the price of pharmaceuticals.
The pharmacy benefit manager plans to block reimbursements for Valeant’s diabetes drug Glumetza as soon as a generic version is introduced on Feb. 1, according to a post on its website Friday. Valeant raised the price of Glumetza by 800 percent in 2015, said Express Scripts. The drug now retails for about $1,500 a month, according to GoodRx, a drug price database. The pill is an extended-release, brand-name version of metformin, a generic drug commonly used to treat diabetes.
“Recent agreements Valeant has signed with retail pharmacies now potentially encourage the pharmacies to bypass the more affordable generic,” Express Scripts said. “To protect our clients and patients from wasteful, unnecessary drug spend, Express Scripts will exclude Glumetza,” from its formulary.
The move is a step beyond what often happens when a drug loses patent protection. Typically, pharmacy benefit managers like Express Scripts push patients to use generics by imposing higher copayments or cost-sharing, but don’t always cut off a brand-name drug entirely.
Push to Generics
Express Scripts said that its typical strategy -- which makes brand drugs available to customers willing to pay perhaps $50 more, while encouraging most to pick the cheaper generic -- wouldn’t work in this case. Valeant last year struck a deal with Walgreens Boots Alliance Inc.’s U.S. stores to distribute some of its drugs.
“Drug prices are set in a very dynamic marketplace, and this development is another example of how the market works to influence price,” said Laurie Little, a Valeant spokeswoman. The company has previously said that it has been preparing for the drug to go generic and lose much of its revenue.
Drugmakers like Valeant are locked in a struggle with pharmacy benefit managers and insurers over which drugs they cover and how much patients should have to pay. Insurance companies have tried to boost co-pays to push their members to pick generics, only to see pharmaceutical companies give out copay coupons, effectively picking up the patients’ tabs, while leaving insurers on the hook for much of the cost of the drugs.
Climbing drug costs have become an issue on the presidential campaign trail, with both Republicans and Democrats saying some treatments have become too pricey. At a campaign event in Iowa, Democratic candidate Hillary Clinton criticized Valeant for boosting the price of another drug, a migraine therapy called D.H.E 45. She called the practice “predatory” and “unjustified.”
“The company is one of these companies that is absolutely gouging American consumers and patients,” Clinton said at the event. “I’m going after them. We are going to stop this.”
Valeant, in an online post responding to Clinton, said it has less than 1 percent of the market for D.H.E. 45, and pointed out that generics are available. The company said it expects to generate about $1 million in revenue from sales of about 200 units of the drug this year.
“Whenever the sales volume of a drug declines, manufacturers must consider pricing adjustments to keep production of the drug viable,” Valeant said. “Patients are able to choose generic versions of the drug, however, at significantly lower prices.”
The company is scheduled to testify at a Feb. 4 Congressional hearing on drug prices.
Valeant advanced 5 percent to $90.44 at 10:10 a.m. in New York. The shares are down 15 percent this year as of Thursday’s close, after tumbling 29 percent in 2015.
Express Scripts said it made the move to exclude the diabetes drug, Glumetza, outside of its usual cycle of changing what drugs it covers. The company sometimes excludes products from its lists of covered drugs, as it did with Gilead Sciences Inc.’s hepatitis C treatment for some of its customers.
“We are ensuring our clients are aware that the more affordable, clinically equivalent generic formulation of metformin will be available to their patients,” said David Whitrap, a spokesman for the pharmacy benefit manager.