Lilly hopes volume can make up for late migraine entry

In a constrained pricing environment a volume play could help sales of Lilly's Emgality as it takes on Amgen’s Aimovig and Teva’s Ajovy.

Corporate strategy

Launching a single new biological into a genericised disease area like migraine would always have led to tough reimbursement discussions. But the debut of three such antibodies within months of each other in 2018 has given payers a rare opportunity to use formulary exclusions to put pressure on drug makers and their pricing strategies.

Amgen and Novartis have made the most of their first-to-market status with their product, Aimovig –  the former reported better than expected sales in its recent fourth quarter. But Lilly has positioned Emgality well with payers, getting its product on the national formularies of both CVS and Cigna’s Express Scripts pharmacy benefit managers. This should help boost uptake against Aimovig and Teva’s Ajovy in an emerging commercial environment in which volume will matter more than price.

This was the case Lilly made to investors yesterday, despite early sales of Emgality that looked disappointing. The product was launched last quarter, and brought in $5m in 2018; EvaluatePharma’s consensus of sellside analysts had forecast $18m. Still, Lilly execs on yesterday's conference call described Emgality’s “best-in-class” payer access, and the company said only one unnamed regional PBM had excluded Emgality.

They said yes

Lilly's success in gaining formulary access for Emgality came at the expense of Aimovig in the case of CVS, and Ajovy in the case of Express Scripts. Lilly's win no doubt came after price concessions, something that might have been a smart move given the view from the top of biopharma that, in general, growth needs to come from volume – a mantra on the Lilly call.

“We're seeing an increase in our patient affordability efforts. These are around Humalog and new launches like Trulicity and Emgality,” said the group's finance chief, Josh Smiley. “We're very confident that those kinds of impacts are positive [and] in the long run they lead to volume gains.”

For its part, Amgen was also bullish on payer access for Aimovig in its year-end earnings call, even though the CVS exclusion was generally known about at that point. Full-year revenue for the product of $119m exceeded sellside consensus of $67m. Still, with the formulary exclusion set to kick in in 2019, the dynamics could shift here.

Outlook for the anti-CGRP antibody migraine drugs
    Annual sales ($m)
Product Company 2018 2019e 2020e 2022e 2024e
Aimovig Amgen/Novartis 119 422 818 1,540 2,058
Emgality Lilly 5 221 489 926 1,201
Ajovy Teva/Otsuka 6* 97 271 637 962
Eptinezumab Alder Biopharmaceuticals - - 50 382 804
*Forecast sales. Source: EvaluatePharma.

With Teva yet to report its year-end earnings the consensus forecast for Ajovy seems easy to beat. Yet when Teva launched the drug in September it had to match an Amgen programme that offered free prescriptions for a limited period of time, likely limiting net sales numbers for 2018 (Teva tries to make something out of nothing with Ajovy approval, September 17, 2018). Even with the free prescription, Express Scripts did not like the price of Ajovy, putting it on its national exclusion list for 2019.

Free to pay

Amgen disclosed that the proportion of paid Aimovig prescriptions increased from 35% in the first half of 2018 to 50% in the fourth quarter. Commercial head Murdo Gordon told investors on the fourth-quarter call that an increasing share of patients would shift from the free programme to insurance coverage in the first quarter and afterwards, and this would also result in a short-term drop in the net price as rebating kicked in. The number of patients in the free programme would be "a smaller and smaller percentage of our business" as the year progressed, he said.

Lilly said its free access programme consisted of in-office samples, so any reported prescriptions were paid.

Obviously, with an estimated six million patients to play for, there is plenty of time for Amgen and Teva to shift payer contracts back in their favour. All of the companies involved are experienced in wringing sales out of hard-fought therapy areas, and when the dust settles all three approved CGRP inhibitors might have gained wide access as long as their makers were willing to cut prices enough. And then volume really will be the name of the game.

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