A generic version of Bristol Myers’ Revlimid (lenalidomide) became available on the US market on March 7, 2022. One would expect that this ought to be some cause of celebration for us, myeloma patients (as well as some patients with myelodysplasia syndrome [MDS], mantle cell lymphoma [MCL], follicular lymphoma [FL] and marginal zone lymphoma [MZL]) as we may have been expecting substantive reductions in both the selling price and copay of this very expensive drug. This, however, will not happen anytime soon. Let me explain.

The introduction of generic Revlimid is currently determined by individual agreements that Bristol-Myers/Celgene has entered into with a number of generic companies (among them Natco Pharma, Sun Pharma, Zydus Cadila, Cipla, Dr. Reddy’s Laboratories and Alvogen) pursuant to settlement of patent litigation between Bristol-Myers and these generic companies. ALL of these agreements are volume constrained and contain language such as (e.g., in the case of Alvogen):

“In settlement of all outstanding claims in the litigation, Celgene has agreed to provide Alvogen with a license to Celgene’s patents required to manufacture and sell certain volume-limited amounts of generic lenalidomide in the United States beginning on a confidential date that is some time after the March 2022 volume-limited license date that Celgene previously provided to Natco. For each consecutive twelve-month period (or part thereof) following the volume-limited entry date until January 31, 2026, the volume of generic lenalidomide sold by Alvogen cannot exceed certain agreed-upon percentages. Although the agreed-upon percentages are confidential, they increase gradually each period to no more than a single-digit percentage in the final volume-limited period. In addition, Celgene has agreed to provide Alvogen with a license to Celgene’s patents required to manufacture and sell an unlimited quantity of generic lenalidomide in the United States beginning no earlier than January 31, 2026.” [emphasis added]

We have some idea of what these “volume constrained quantities” are from publicly available information. The first generic (manufactured by Natco in India and marketed by Teva/Arrow in the US) will be living under the following constraints:

“Then, in the first month, Natco and its U.S. marketing partner Arrow, will produce only a small amount—described as a mid-single-digit percentage of Revlimid’s monthly volume. Over time, that percentage increases, reaching 33% of Revlimid’s volume by March 2025. Then on January 31, 2026, the limitations end.” [emphasis added]

In simple terms this means that for the next some months Teva/Natco will be able to supply only about 5% of the US market, and this means the following for us patients:

• We will only have a 5% likelihood that our refill prescription for Revlimid will be filled with a lower cost/lower copay generic as 95% of prescriptions will be filled with the brand Revlimid at the Revlimid price and copay
• Teva/Natco will have little incentive to lower the price of Revlimid to us patients as they will not have to face competition from other generic manufacturers/marketers for some months. That is just pure economics where companies will do their best to maximize their profits. Please be aware that while we (in the US) are used to Revlimid pricing of about $908 per capsule (e.g., as is currently paid by Medicare), its manufacturing cost is about $1.00 for that same capsule (based upon the selling price of generic Revlimid on the Indian market at the current exchange rate). In other words, there is a massive margin (around 900 times its manufacturing cost) on lenalidomide (regardless of whether it is brand or generic).
• In a discussion with a pharmacist at one of the companies that we use to get our Revlimid refills, I learned the following:
  • The price differential between the brand and the generic is a mere 9%
  • It is very difficult to have access to any generic quantities as only very limited volumes are allocated to the specialty pharmacies that fill our prescriptions

Even if there will be 6 generic manufacturers/marketers present on the US market by year-end, they will only be allowed a combined total of about 30% market share. This is simply not competition that will meaningfully lower the cost/copay of this badly needed medication, not today and not in the next two years.

True competition and meaningful price/copay reductions in the Revlimid /lenalidomide market will not happen until the total supply that can be made available by generic companies will exceed the total demand of the market (estimated around 2025).