Express Scripts covers Amgen, Lilly migraine drugs, excludes Teva

LOS ANGELES (Reuters) – Express Scripts Holding Co, one of the largest US prescription benefits managers, will cover new migraine drugs from Eli Lilly and Amgen Inc, but exclude a rival medication from Teva Pharmaceutical Industries Ltd after price negotiations with all three manufacturers.

The decision represents a setback for Israel-based Teva , which is in the midst of a corporate restructuring and had hoped to capture a sizable share of the multibillion-dollar migraine market. Express Scripts is also taking steps to limit use of the Amgen and Lilly migraine drugs to patients it says are most likely to benefit from them.

Pharmacy benefits managers (PBMs) are taking more aggressive action to lower the cost of prescription drugs for their clients, large employers who pay for health benefits for their workers.

Teva's Nasdaq-listed shares fell 4% to $21.32, while Amgen was up slightly at $203.03 and Lilly shares rose 2% to $113.23.

The new migraine treatments were approved for the US market within a few months of each other this year. That gave Express Scripts more leverage in demanding a discount in exchange for putting a therapy on its “formulary,” or list of covered drugs. “These products are fairly interchangeable,” Harold Carter, clinical solutions director at Express Scripts, told Reuters. “It comes down to manufacturers providing the best value to be on the formulary.” He acknowledged that price rebates played a role in determining coverage status, but declined to comment on the level of rebating.

In May, Amgen and marketing partner Novartis AG won US approval for Aimovig, an injected drug designed to interfere with a process that helps kick off migraine headaches. Teva's Ajovy and Lilly's Emgality were approved last month.

The three drugs work in a similar manner and represent an improvement over older treatments. In clinical trials they significantly reduced migraine frequency in about half of patients.

Wei-Li Shao, vice president of neuroscience at Eli Lilly, told Reuters last month that discounts and rebates for Emgality would be negotiated with insurers and other payers.

Teva, in an emailed statement, said it was “disappointed” with Express Scripts' decision, but has programs in place to make sure patients can access Ajovy, which is seeing “strong demand” in the few weeks since its launch.

All three drugs have a list price of $575 a month, or $6,900 a year. Geoffrey Porges, biotech analyst at Leerink, told Reuters he expects the drugmakers will need to offer rebates of at least 30% for the new migraine class to be covered by insurance.