FDA Lets Pharmacies Substitute Branded Insulin With Knockoff Product

Semglee is made by Viatris Inc. VTRS 0.42% and Biocon Biologics Ltd. and was first approved by the FDA last year. But doctors would have to specifically prescribe the biosimilar version, rather than allowing pharmacists to substitute it for Lantus when filling the prescription. The companies said they would launch the product with new labeling on interchangeability before the end of the year.

A Viatris spokeswoman declined to disclose how much the company will charge for the interchangeable Semglee product.

The current list price for a pack of five Lantus injection pens is $425.31, a Sanofi spokeswoman said. When Semglee was originally introduced last year, the companies charged $147.98 per five-pen package.

A majority of patients pay $0 or $10 per prescription for Sanofi insulins through the company’s copay assistance program, the spokeswoman said. For uninsured patients, the company has a program that allows patients to pay a fixed price of $99 a month.

Insulin, a lifesaving medication used to control blood sugar levels in people with diabetes, became a flashpoint in recent years in the debate over rising drug prices. The cost of insulin led some patients, particularly those without health insurance or coverage requiring significant out-of-pocket payments, to ration or skip doses of the medication.

In 2010, Congress created a mechanism for drugmakers to develop biosimilar copies of so-called biologic drugs—made from living cells—that had lost patent protection. The aim was to create more competition and bring down prices in the same way that generics had for traditional pharmaceuticals made from chemicals.

But the biosimilar market hasn’t delivered as much cost-savings as policy analysts had hoped, partly because there haven’t been any approved biosimilars designated as interchangeable by the FDA.

“This is a momentous day for people who rely daily on insulin for treatment of diabetes, as biosimilar and interchangeable biosimilar products have the potential to greatly reduce healthcare costs,” acting FDA Commissioner Janet Woodcock said in a statement.

Lantus had second-quarter sales of 637 million euros, equivalent to about $757 million, down 2.7% from the same quarter a year ago, in part because of biosimilar competition. In the U.S., sales rose 6.6% to 237 million euros, or about $282 million, over the same period.

The FDA’s approval of Semglee as interchangeable is an important step to creating competition and affordable insulin, but there is still a long way to go, said David Mitchell, founder of Patients For Affordable Drugs, a lobbying and advocacy group.

“Semglee offers an alternative for only a fraction of the diabetes community—we need competition from interchangeable, less expensive options for all modern forms of insulin,” Mr. Mitchell said in a statement.

The interchangeability designation for Semglee may not have as much of an impact on the insulin market as the FDA hopes, said Bernstein & Co. analyst Ronny Gal. There are already several long-acting insulin products on the market that doctors and patients view as equivalent, and drugmakers have created ways to bring down patient copays in recent years amid scrutiny from lawmakers and the media, Mr. Gal said.

Pharmacists typically only substitute cheaper drugs when a patient’s insurance encourages them to do so, said Mr. Gal. In the case of insulin, insurers and pharmacy-benefit managers have kept tight control of which products patients receive because they can obtain larger rebates and discounts by guaranteeing their market share to particular products, he said.

But the FDA’s first approval of an interchangeable product is a positive signal that the agency is willing to grant the designation to future biosimilars where insurers may be willing to allow for substitution, said Mr. Gal.

“It’s important looking forward to other markets where interchangeability is more important,” said Mr. Gal. “In the context of insulin, it is a minor market development.”

Write to Joseph Walker at [email protected]