BMS/AZ withdraw Forxiga (dapagliflozin) from German market – December 17, 2013

On Friday, BMS/AZ announced a decision to withdraw Forxiga (dapagliflozin) from the German market, following a failure to reach an agreement with German authorities on the product’s pricing. As background, the German government's recent campaign to curtail rising medical costs by implementing a more aggressive comparative effectiveness review process has had a significant negative impact on the diabetes drug market in the country. The German Federal Joint Committee (G-BA) ruled earlier this year that Forxiga shows "no added benefit" when compared to sulfonylureas, based on a review conducted by the German Institute for Quality and Efficiency in Health Care (IQWiG). A "no additional benefit" ruling eliminates manufacturers' ability to negotiate on a product's pricing, and instead subjects the project to reference (generic-level) pricing. Novartis' Galvus (vildagliptin) and BI/Lilly's Trajenta (linagliptin) also received “no additional benefit” rulings in a recent G-BA class review of the DPP-4 inhibitors. As a result, BI/Lilly decided not to launch Trajenta in Germany, and Novartis has considered withdrawing its product from the German market. BMS/AZ’s Onglyza (saxagliptin) franchise and Merck’s Januvia (sitagliptin) franchise received more positive rulings in Germany.

Disappointingly, in all these cases (including Forxiga's), IQWiG and the G-BA's negative rulings were not based on the drugs' efficacy data, but rather came because the drugs' clinical trial programs did not follow the G-BA's strict rules on the choice and administration protocol for comparator therapies. IQWiG's report listed four primary issues with BMS/AZ's Forxiga submission: 1) The companies did not conduct a direct comparison between Forxiga and a sulfonylurea for the monotherapy indication, and in the indirect comparison provided (which is allowable in some cases), Forxiga was not used as approved (in metformin-intolerant patients only); 2) For the metformin co-therapy indication, the drug was compared with glipizide, while the G-BA requires comparison with glimepiride or glibenclamide; 3) For the sulfonylurea co-therapy indication, glipizide was used, or (when glibenclamide was used) the dosage exceeded the maximum allowed in Germany; and 4) For the insulin co-therapy indication, the studies provided did not sufficiently allow for patients to adjust their insulin dosage; on the latter, we agree patients should be allowed to adjust their dose.

We have consistently been disappointed with the German comparative effectiveness review process, which has struck down therapies for not meeting a very narrow set of guidelines rather than evaluating their risk/benefit profiles. Most manufacturers’ clinical trial programs are geared towards global regulatory approval, and as such it is somewhat unrealistic for the G-BA to hold manufacturers to such strict standards for comparative effectiveness reviews that are so specific to Germany (or, alternatively, to expect manufacturers to invest additional immense resources in a separate set of trials geared towards reimbursement). The withdrawal of Forxiga from the market is arguably a bigger blow for German patients than withdrawals of individual DPP-4 inhibitors, as Forxiga was first and only SGLT-2 inhibitor on the market in Germany. From what we have seen so far, the German process appears to be a significant threat to diabetes patient choice in the country. Forxiga’s worldwide sales were $7 million in 3Q13 (see our BMS/AZ 3Q13 Report for more details), and AZ management remarked during their 3Q13 update that physician uptake of the product in Europe has been positive. We are hopeful but not optimistic that pushback from providers may lead the G-BA to reconsider its recent decisions on diabetes drugs. We are not optimistic about patient advocacy having the same outcome, at this stage.

-- by Manu Venkat, Jessica Dong, and Kelly Close