Bristol Myers' schizophrenia drug, the first of its kind, has been approved by the FDA

For the first time in more than two decades, an entirely new form of antipsychotic drug will be available in the United States following approval by the Food and Drug Administration on Thursday.

While the approval is significant, it could also shine a renewed spotlight on a persistent failing in America's health care system. An effective drug comes to market, but insurance barriers may make it difficult for patients to get it at first. Wall Street analysts are optimistic that there won't be many such hurdles, but some psychiatrists are cautious, pointing to previous experience with new drugs.

The drug, sold as Cobenfy, was developed by Boston-based biotechnology company Karuna Therapeutics. In three medium to large clinical trials, Karuna showed that treatment with Cobenfy significantly reduced symptoms of schizophrenia in people with the mental disorder.

In addition, the drug did not cause excessive weight gain, restlessness or movement problems – side effects that are common with existing antipsychotics and in the past have led patients to either switch medications or stop taking them altogether.

The results were met with great enthusiasm, particularly since significant portions of the schizophrenic population do not respond to or maintain other therapies. But while doctors are eager to have another treatment option, they say they're not sure how much Cobenfy will ultimately benefit patients.

A main concern is the extent to which health insurance companies will cover such a drug given the abundance of cheaper alternatives. The FDA has already approved more than a dozen antipsychotics for schizophrenia, and many have inexpensive generic versions that patients may want to try first. At Cobenfy, the list price for a year's supply is $22,500, before taking into account any insurer rebates or rebates.

A spokesman for Bristol Myers said the company priced the drug “in line with the landscape of branded oral antipsychotics.” Most patients would not pay the list price, the spokesman added.

“You really have to be sure it's better than anything else that's cheaper and more readily available,” Mitzi Gonzales, a neuropsychologist and director of translational research at Cedars-Sinai, said in an interview earlier this year.

Carol Lim, a psychiatrist at Massachusetts General Hospital, noted in an interview this year that after schizophrenia drug Caplyta was approved in 2019, it was difficult to get insurance coverage until other treatments failed.

Cobenfy's launch will be handled by Bristol Myers Squibb, which recently acquired Karuna for $14 billion. Adam Lenkowsky, Bristol Myers' chief commercial officer, said on a conference call in late July that payers had given the company “very positive feedback” and acknowledged that Cobenfy “fills a significant unmet need.”

Lenkowsky added that a team at Bristol Myers has been pitching Cobenfy to state Medicaid directors and Medicare payers for months. Estimates suggest that more than 80% of schizophrenia patients participate in these programs, meaning their consent will be “critically important,” according to Lenkowsky.

Citing data from Clarivate, Bristol Myers estimates that the schizophrenia population in the U.S. totals about 1.6 million.

Cobenfy's labeling includes warnings about risks such as urinary retention, increased heart rate, and swelling of the face and lips. The FDA recommends against the use of the drug in people with moderate to severe renal impairment or known liver impairment.

Expectations for Cobenfy are high on Wall Street. Investment firm Cantor Fitzgerald expects annual sales to reach $1 billion starting in 2026. Analysts have forecast the drug will generate more than $3 billion by 2030, according to Leerink Partners.

“I think you're going to get a huge influx of early adopters,” Paul Matteis, an analyst at Stifel who previously covered Karuna, said late last year. “And I think Bristol [Myers] You just can’t mess it up.”

Sales could increase if Cobenfy receives further approvals, a goal Bristol Myers is already working toward. In a study involving around 400 people, the drug is being examined as an additional therapy for schizophrenia patients who do not respond adequately to their current atypical antipsychotics. Data from this experiment should be available next year.

Also in 2025, Bristol Myers plans to move the drug into late-stage testing for both bipolar disorder and the agitation that often accompanies Alzheimer's disease.

In 2026, the company expects results from two studies with around 800 people with psychoses related to Alzheimer's.

Cobenfy is not like available antipsychotics, all of which work by balancing levels of the chemical messengers dopamine or serotonin. Instead, it activates “muscarinic receptors,” a type of protein that researchers believe harmonizes certain brain circuits that don't function properly in schizophrenia and some other psychiatric illnesses.

Thanks to Karuna's results, muscarinic receptors have become a sought-after commodity. Just two weeks before Bristol Myers announced its acquisition plans, AbbVie agreed to acquire Cerevel Therapeutics for nearly $9 billion.

Cerevel, a Pfizer spinout, has developed a muscarinic drug, emraclidine, that could ultimately compete with Cobenfy. Two emraclidine studies, in which a total of around 750 participants with schizophrenia took part, are expected to provide initial data before the end of the year.

Further down the line, companies like Neurocrine Biosciences, Neumora Therapeutics and MapLight Therapeutics are working on their own muscarinic compounds.

Editor's note: This story has been updated with pricing information from Bristol Myers.