CivicaRx Announces Plans for Generic Insulin

Just days after President Biden called for a cap on insulin prices in his State of the Union Address, CivicaRx announced it is planning to develop and manufacture certain insulin products to be sold at a much lower cost than those currently on the market.  The current plan is for the first insulin to be introduced in 2024.  CivicaRx’s focus is to avoid the gross-to-net pricing framework (rebates) currently used for insulin products.

PBMs utilize their formulary coverage and product exclusions to drive prescription volume and associated brand drug rebates.  PBMs currently exclude lower list price insulins and would be expected to do the same with future low priced CivicaRx insulins.  Patients would still be able to access the product with a prescription and pay the cash price.  Depending on the pharmacy benefit plan, the monthly patient cash price may be much lower than the third-party price for patients with high deductible plans.  Existing manufacturer financial support programs through copay cards reduce the patient cost for Lantus, Novolog, and Humalog.  In combination, these factors generate a preference for the existing brands compared to the potential lower cost CivicaRx insulins

Medicaid currently focuses on the lowest net cost product and will exclude generics in situations where the generic price costs the Medicaid program more than the brand.  Unless CivicaRx versions are less expensive than rebated brands, Medicaid plans will limit coverage for these products.

Medicare Part D plans also benefit from brand rebates (percentage of list price) and DIR fees (percentage-based and flat-fee options).  CivicaRx insulins would be disadvantaged based of the lack of rebates, and possibly on DIR fees, if the PBM could retain a percentage of the brand insulin vs a flat fee on a generic insulin.

Therefore, if there is limited third-party coverage, pharmacies may lack the demand to stock the CivicaRx insulins.

The easiest avenues for gaining market share appear to be:

  • Uninsured cash-paying patients across all pharmacies
  • Hospital inpatient use to lower cost and expand profit opportunities

PHSL supports a competitive market, especially for a necessary treatment where patient costs become an obstacle to care, but there are product adoption concerns based on the initial notice and current market framework. CivicaRx will have obstacles to overcome for wide adoption of the lower cost insulins. Where do you see a fit in the market for CivicaRx’s proposed insulins?

 

 

Posted: March 2022

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