CVS Health launches its new Cordavis brand to target the $100 billion biosimilar market
CVS Health (CVS) on Wednesday announced the launch of a new business unit, Cordavis, to bring biosimilar medicines to market.
The move represents “one of the biggest opportunities” to bring down drug costs, and gives the healthcare giant a cut of what it expects to be, Prem Shah, CVS’s executive vice president and chief pharmacy officer, told Yahoo Finance. $100 billion market By 2029.
In the same way that CVS and other retailers have private-label generic drugs—branded acetaminophen on the same shelf as Tylenol (JNJ, KVUE)—the health-care giant wants to build a line of private-label biosimilars under its name. Cordavis.
Shah said the company will not do any drug research and development.
But CVS said the strategy is about more than just putting a label on the finished product.
“For products that Cordavis is involved in manufacturing, Cordavis will be significantly involved in the manufacturing process with contract manufacturers, including such things as overseeing manufacturing and quality control processes, developing product labeling, and organizing product logistics, among other things.” said a company spokesperson. Yahoo Finance said.
“most valuable to customers”
“We have a strategy to pursue products that we believe we can create the most value for customers, and for the US market where we can increase competition, reduce cost, get that cost to consumers, and get these products to market consumers at lower prices,” Shah said.
The first product Cordvice will co-manufacture and market is Hyrimoz from Sandoz (NVS) — a biosimilar to AbbVie’s (ABBV) rheumatoid arthritis drug Humira, which was patented this year.
Cordavis-branded Hyrimoz will be listed at 80% less than the Humira price.
That’s similar to rival OptumRx, a unit of UnitedHealth (UNH), which announced last year.
The move is a volume-based transaction with only upside for CVS, Lisa Gill, an analyst at JPMorgan, said in a note on Wednesday.
“CVS has committed to purchasing a certain amount of volume from Sandoz and management has indicated that there are no additional capital commitments,” Gill said. “CVS expects Cordavis to generate positive margins to market the product, but it is too early to quantify the potential contribution.”
OptumRx said the Sandoz-branded biosimilar Hyrimoz will list at 5% less than Humira, and non-branded alternatives 81% less than Humira, which has List price $6,922 per month for injectable medication.
In comparison, Amjevita’s proprietary (AMGN) biosimilar is 55% lower than Humira for the unbranded version and 5% lower for the branded version.
Mark Cuban’s Cost Plus Drugs distributes Coherus’ Yusimry, another biosimilar to Humira, for about $570, plus fees, per month.
Specialized medicines on demand
Cordavis was launched as a wholly owned subsidiary of CVS Corporation, targeting the expensive specialty drug market It accounted for 50% of spending on drugs In the US in 2021 though Only 2% is used Of the population.
Humira and its biosimilars fall into this category.
Pharmaceutical industry has focused more of its efforts In recent years to target the launch of specialized drugs. These efforts, combined with the number of patents for blockbuster drugs held by major drug companies, provide a market ripe for competition.
“Over the next 10 years, we’re seeing this biomimetic competition enter the US market, and we want to ensure these products are approved,” Shah said.
But it is also an area that has historically faced shortages as supply chain issues hinder product production.
Cancer drugs as well as diabetes drugs, such as Ozempic from Novo Nordisk (NVO), made it to the Food and Drug Administration’s drug shortages list this year. That is why Shah said CVS intends to select products that can provide adequate supply.
“When we switch patients to these clinically complex formula (products), we want to make sure we don’t run out of supplies, and there have been supply issues with some other products,” Shah said. Explains why the company chose Sandoz biosimilar for its launch.
“Cordavis is a logical development for us and will help ensure an adequate supply of biosimilars in the United States and support this market now and in the future, while ultimately improving health outcomes and lowering costs for consumers,” CVS Chief Financial Officer Sean Gorten said Wednesday.
“Let’s be really clear. Our mission is to get prices as low as possible for our customers. And that’s what we do as a company every single day.”
Follow Anjali on Twitter @AnjKhem.
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