CVS launches unit to market and co-produce biosimilar medicines

FILE PHOTO: Illustration shows CVS Health logo

By Patrick Wingrove and Pratik Jain

(Reuters) -CVS Health Corp said on Wednesday it has launched a new company called Cordavis that will work directly with manufacturers to commercialize and co-produce biosimilar medicines for the U.S. market.

The company next year will partner with Swiss drugmaker Novartis' Sandoz unit to market Hyrimoz, a version of AbbVie's blockbuster arthritis drug Humira, at a list price that is more than 80% lower than the branded drug.

Unlike generic versions of easy to manufacture pills, complex biotech drugs made from living cells cannot be exactly duplicated and so are called biosimilars.

Lawmakers and the Federal Trade Commission have been investigating the role of pharmacy benefits managers (PBMs), which negotiate drug prices with manufacturers, in rising healthcare costs this year.

CVS' Caremark, one of the largest PBMs in the U.S., has also been under scrutiny, particularly since eight drugmakers launched their own biosimilar versions of Humira this year and most kept prices high to compete with one another for leverage with PBMs.

Three kept their list price within 5%-7% of AbbVie's $6,922 per month Humira price tag, while two priced at an 85% discount and two, including Sandoz, offered both types of prices.

Coherus BioSciences partnered with Mark Cuban's Cost Plus Drugs, an online pharmacy launched by the billionaire to sell medicines directly to customers, to market its Humira biosimilar for $569.27 a month.

Robert Popovian, the chief science policy officer at patient advocacy group Global Healthy Living Foundation, said CVS' move to sell Hyrimoz at an 80% discount through Cordavis was probably a reaction to the Coherus-Cuban partnership.

"I think they looked at what happened with Coherus and thought they could partner up with one entity to see if they could really push this medicine more broadly, and perhaps even sell it directly to patients," he said.

(Reporting by Leroy Leo and Pratik Jain in Bengaluru; Editing by Krishna Chandra Eluri and Bill Berkrot)