CivicaScript Launches Initial Generic Drug, Plans Several More in Coming Years
- Aug 11, 2022
- PBM Model
As appeared in AIS Health’s RADAR on Drug Benefits and Health Plan Weekly on August 11, 2022
CivicaScript last week began selling its initial generic drug, a 250 mg abiraterone acetate tablet. It's the first of what the health insurer- and PBM-backed nonprofit company hopes are many medications that it will produce to help patients and payers lower their drug spending.
The product is currently only available through lntermountain Healthcare, a Utah based integrated health plan and system that owns a specialty pharmacy, and Lumicera Health Services, a specialty pharmacy owned by Navitus Health Solutions. But CivicaScript President Gina Guinasso tells AIS Health, a division of MMIT, that she expects other pharmacies to offer the medication in the coming months.
CivicaScript is offering a 120-tablet bottle of 250 mg abiraterone acetate (a month's supply) for sale to pharmacies for $160 and is recommending that pharmacies charge no more than $171 per bottle, which is the suggested maximum retail price (MRP) and represents an $11 markup. The combination of abiraterone acetate and prednisone is intended for patients with prostate cancer whose disease has spread to other parts of the body.
Citing CMS data from 2020, CivicaScript noted in a press release that the MRP is about $3,000 per month less than the average cost of the drug for people with Medicare Part D, which commonly covers a large number of prostate cancer patients.
But Elan Rubinstein, Pharm.D., principal of EB Rubinstein Associates, says that CivicaScript may be overstating its case. Rubinstein notes in an email to AIS Health that the retail price for generic abiraterone acetate is as low as $187 for a month's supply at Rite Aid, according to GoodRx, which tracks prescription drug prices. He also cites data from Medicaid that finds the national average drug acquisition cost (NADAC) for abiraterone acetate averages about $1.91 per tablet, or $230 for a month's supply.
While CivicaScript says the MRP should be $171, "the price at the pharmacy counter depends on the PBM's pricing arrangement with the pharmacy or on third party pricing like that available through GoodRx," Rubinstein writes.
He adds that adding an $11 markup to the NADAC would lead to a $241 retail price for the existing abiraterone generics, which is a 41% increase over CivicaScript's MRP.
"Significant?" Rubinstein writes. "Yes, but not thousands of dollars difference as per the news release."
Ben Heiser, Lumicera's vice president of pharmacy operations and business development, tells AIS Health that the $11 markup may be "very hard to service from a specialty standpoint" because that $11 may not even cover the costs to ship the medication to patients. However, he adds that the price should be much lower than alternative versions of abiraterone, and Lumicera is committed to offering the lowest price possible.
"We're working with [CivicaScript] to determine what the best way [is] to make sure we're providing that lowest cost," Heiser says. "I can't give you any specifics on what the cost to the end user will look like yet, but the most important thing is that compared to what's currently happening...even if [the price] is a little bit [higher] than what was originally said, the vast majority of savings are still going to be happening for patients and plan sponsors."
CIVICASCRIPT FACES COMPETITION IN CROWDED ABIRATERONE ACETATE MARKET
CivicaScript is facing competition, as several companies have sold generic abiraterone acetate since 2018, the year that Janssen Pharmaceuticals lost its patent protection for the Zytiga branded drug.
CivicaScript is working with Hikma Pharmaceuticals pie, a London-based company that began selling generic abiraterone acetate in early 2019. Hikma is manufacturing the generic drug for CivicaScript, continuing a relationship that started in 2019, when Hikma joined forces with Civica, Inc., the parent company of CivicaScript. As part of a five-year agreement, Hikma agreed to produce 14 sterile injectable medications for Civica, Inc. using Hikma's abbreviated new drug applications (ANDAs) and Civica's National Drug Code (NDC) and labeling. The Hikma-CivicaScript deal for abiraterone acetate is in a similar vein.
Civica, Inc. is focused on dealing with drug shortages in the hospital setting, while CivicaScript is targeting high-cost generics in the outpatient setting. CivicaScript was founded in 2020 by Civica, Inc., the Blue Cross Blue Shield Association and 18 independent and locally operated Blues companies. Recently, Navitus and EmsanaRx became the first two PBMs to join CivicaScript. Navitus is a startup PBM that touts a 100% pass-through model, while EmsanaRx was founded last year by the Purchaser Business Group on Health, a nonprofit representing nearly 40 private and public purchasers that collectively spend $350 billion annually on health care services.
"There are a number of other generic manufacturers that have abiraterone 250 [mg] out on the market, but we've yet to see that that is bringing the price down enough for consumers," says Guinasso, who joined CivicaScript last year from OptumRx, where she was senior vice president of commercial and Medicare formulary contracting strategy. "We did select this product because of that list price being very high and knowing we'd be able to launch at a lower price than what's out there as well as ensure those lower prices are passed on to the patients that need the product."
Rubinstein sees CivicaScript's entry as a positive for the abiraterone acetate market, but he's not sure about the uptake among PBMs and pharmacies.
"CivicaScript's pricing for this drug appears to be lower than the NADAC, which should make it competitive in the marketplace," Rubinstein writes. "I cannot predict if major wholesalers and major drug chains will drop current sources and move to CivicaScript."
Rubinstein adds that, "It seems likely that PBMs will take CivicaScript's net price for this drug into account in determining Maximum Allowable Cost [MAC] that pharmacies in their networks will be paid - if and only if the CivicaScript drug is widely available to pharmacies. That is, PBMs won't base their pharmacy reimbursement on low drug prices that pharmacies in their networks cannot realize through their wholesalers or directly."
WILL OTHER PHARMACIES PARTNER WITH CIVICASCRIPT?
Lumicera and lntermountain, the first two pharmacies to partner with CivicaScript, both are closely tied with the company. Navitus, Lumicera's parent, is a member of CivicaScript and is focused on passing through costs to consumers, while lntermountain was one of the original members of Civica, Inc.
Heiser says Lumicera has been dispensing other generic abiraterone acetate tablets for the past few years. He adds that Lumicera may continue to dispense those competitors in addition to the CivicaScript abiraterone tablet.
"I would say that's to-be-determined," he says. "It's based on each individual plan sponsor's needs and their formularies. The biggest thing for us is we want to make sure that whatever product that we're providing to a patient or a plan sponsor, that we're providing it at the pass-through cost...That's where this product fits in very well because we can assure CivicaScript that the end user is seeing that lower cost, where that's not necessarily the case everywhere."
Heiser notes that other pharmacies may be hesitant to dispense CivicaScript's products because of the low markups, which could hurt the organization financially.
"These medications present a lot of revenue opportunity and profitability to traditional models," he says. "Another [reason they may hesitate] is that in order to actually pull this off, you have to have the tools and infrastructure and technology to do it. We've been doing this since 2014, essentially passing through the true cost to our clients, so it's nothing that's challenging for us. We're able to do it out of the gate. That's why it's a no-brainer for us to join and easy for us to join, where others are struggling with, 'How do we deal with the potential loss of profitability on this medication?' and 'How do we actually do it with our technology?"'
He adds: "Our hope is that we make this very, very successful and show that it is possible and show the value that we can provide within the health system to pass that cost through and provide that lowest net cost, so it kind of almost forces the hand of other organizations to say, 'You know what? We've got to step up to the plate. We've got to do something like this, help control drug cost, help for the betterment of the patients and things like that."'
CIVICASCRIPT PLANS GENERIC INSULIN, OTHER MEDICATIONS
During the next few years, CivicaScript expects to launch generic medications in six to 10 drug classes, including three insulin biosimilars that will be available in 2024 with a recommended price to the consumer of no more than $30 per vial and no more than $55 for a box of five pre-filled pen cartridges. Civica, Inc. is building an
insulin manufacturing facility in Virginia, and it has agreed to a co-development and commercial agreement with GeneSys Biologics, an India-based biotechnology company.
CivicaScript plans on applying for its own ANDAs with the FDA so it doesn't have to partner with manufacturers and can control the prices of the drugs it manufactures, according to Guinasso. She says the company is focusing on therapeutic areas where the generics are currently expensive, where there are a lot of patients who need the drugs and where CivicaScript can use its low-cost model to offer a more affordable option for patients and payers.
"We price as low as we possibly can in order to sustain the company and really the mission of this company," Guinasso says. "Our cost of goods is slightly lower than what we're selling it for in order to continue to do the work that this initiative was built to do."
Contact Guinasso via Debbi Ford at firstname.lastname@example.org, Rubinstein at email@example.com and Heiser via Kristin Deuber at firstname.lastname@example.org.
Copyright © 2022 by AIS Health, a division of Managed Markets Information & Technology, LLC. Reprinted with permission from AIS Health, an MMIT company, aishealth.mmitnetwork.com.