CVS launches new subsidiary for biosimilars

CVS Health is getting into the biosimilars business.

The drug store and health care giant this week launched Cordavis, a new subsidiary that will work with pharmaceutical manufacturers to commercialize and co-produce Food and Drug Administration-approved biosimilars, which are essentially generic versions of biologic medications.

Through wholly owned Cordavis, Woonsocket, Rhode Island-based CVS said it aims to develop a portfolio of products to help improve access to biosimilar drugs in the United States, including via the creation of more competition that lowers prices as well as through investment in future products.

Biosimilars—which are “highly similar to” but have no clinically meaningful differences from biologic medicines already approved by the FDA—represent a key avenue for reducing drug costs for consumers and employers in the U.S., CVS noted. The nation’s biosimilars market totaled less than $10 billion in 2022 but stands to grow to more than $100 billion by 2029, the company projected. CVS retail competitors with pharmacy operations ostensibly could end up sourcing biosimilars from Cordavis.

“Biosimilars are crucial to creating competition and reducing costs for specialty pharmaceuticals, where drug prices are rising the fastest,” Prem Shah, chief pharmacy officer and co-president of CVS Health’s pharmacy and consumer wellness segment, said in a statement. “Through our direct involvement, we will expand the supply chain and ensure biosimilar availability in the market. We have assembled a talented team at Cordavis and look forward to the value this business will deliver to patients and payors.”

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For its first product, Cordavis has contracted with generic and biosimilar drugmaker Sandoz to commercialize and bring to market Hyrimoz (adalimumab-adaz), a biosimilar of AbbVie’s Humira, an injectable biologic used to treat symptoms of inflammatory conditions such as Crohn’s disease and rheumatoid arthritis. CVS said Hyrimoz, slated for release in the 2024 first quarter under a Cordavis private label, will carry a list price more than 80% lower than that of Humira.

“CVS Health has a history of bringing innovative solutions to the market that lower the cost of drugs and ensure people have access to the medications they need to stay healthy,” according to Shawn Guertin, chief financial officer for CVS Health. “Cordavis is a logical evolution for us and will help ensure sufficient supply of biosimilars in the U.S. and support this market now and in the future, while ultimately improving health outcomes and reducing costs for consumers.”

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The nation’s largest drug chain and pharmacy care company, CVS already is in the generic drug business through its Red Oak Sourcing joint venture with pharmaceutical distributor Cardinal Health. Launched in July 2014, the 50/50 venture sources and negotiates generic medication supply contracts for both Cardinal Health and CVS Caremark, CVS’ pharmacy benefits management arm.