(Bloomberg) — Novo Nordisk A/S’s Victoza, a diabetes treatment that dominates its class of drugs, was shunned by U.S. pharmacy benefits manager Express Scripts Holding Co. for at least the second year in a row, signaling that the Danish company refused to concede on pricing.
Competing drugs from AstraZeneca Plc and Eli Lilly & Co. remained on the preferred list for 2017, while GlaxoSmithKline PLC’s Tanzeum was also left off, according to a document published by Express Scripts on Monday. Separately, French drugmaker Sanofi’s blockbuster insulin Lantus was among products excluded from CVS Health Corp.’s 2017 list of covered drugs. Shares of Novo and Sanofi slumped on Tuesday in Europe.
Employers, insurers and other customers pay Express Scripts and CVS to keep the cost of drugs in check by switching patients to generic versions of medicines, and by pitting manufacturers of branded drugs against each other to get coverage. Last year, diabetes was the most expensive category for treatment after specialty medications for illnesses such as cancer and rheumatoid arthritis in the U.S., according to Express Scripts.
Victoza, the market leader among drugs known as GLP-1 analogs that stimulate insulin production, is forecast to generate sales of $3.09 billion this year, according to analysts’ estimates compiled by Bloomberg. The treatment in June demonstrated that it also helped reduce the risk of heart attacks, strokes and deaths from cardiovascular causes in diabetics, though the benefit was smaller than some analysts had expected.
“This development is surprising,” Citigroup Inc. analysts in London including Peter Verdult wrote in a research note on Tuesday, commenting on Victoza being excluded. “Sentiment near term will be driven by market perception on Novo’s success in contracting for 2017 as well as the rebates required to grant access.”
Shares of Novo fell 2.7 percent to 370.50 kroner in Copenhagen trading, in its biggest decline in seven weeks. The stock has dropped about 7 percent this year. Sanofi shed almost 3 percent in Paris on Tuesday.
A spokeswoman for Bagsvaerd, Denmark-based Novo declined to comment on the decision by Express Scripts. Jack Cox, a spokesman for Sanofi, said the drugmaker was disappointed by the CVS decision, but would continue talks with other insurers.
Express Scripts is targeting $1.8 billion in additional savings for its clients next year, compared with $1.3 billion in 2016, Credit Suisse Group AG said in a note Tuesday.