Three Biosimilar Targets in CMS’s Sights

With the announcement today of the first 10 drugs to be subject to the Medicare price negotiation provisions of the Inflation Reduction Act, three of these agents are of interest to the biosimilar community—Enbrel®, Stelara®, and NovoLog®.

With the initial implementation date of the newly “negotiated” prices set for January 1, 2026, it is likely that Johnson & Johnson will bypass price negotiation, via the Biosimilar Special Rule, as Stelara (ustekinumab) should be facing active biosimilar competition in 2025. Based on the number of biosimilar competitors for Stelara, the net price to payers should drop rapidly for all customers (not just Medicare).

On the other hand, Amgen’s Enbrel (etanercept) has been shielded from biosimilar competition for far too long (and may not face biosimilar competition until 2029, or 3 decades of exclusivity). For this product, Medicare price negotiation cannot come quickly enough. If CMS follows through with mandatory discounts between 25% and 60%, depending on how long the drug has been on the market, then Amgen should expect very sharp cuts. This may well further discourage biosimilar manufacturers who already received approval (and long ago) for their etanercept products from entering the market at all in 2029. This includes Sandoz’s Erelzi™ and Samsung Bioepis’ Eticovo™. CMS will release the amount it will pay for these first 10 drugs in September 2024, which should at least avert further list price increases of Enbrel.

NovoLog (insulin aspart) is also the subject of development by biosimilar manufacturers, including CivicaRx and  Biocon. As multiple insulin manufacturers and CivicaRx have pledged to offer their products to patients for no more than $30 per month, it is unknown at this time how Medicare price negotiation may affect CMS’s insulin costs.

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