Copycats bite AbbVies’ top-selling drug Humira

When Humira, AbbVies’ record-breaking immunology drug, went off patent early last year after generating more than $200 billion in sales for the maker over two decades, a slew of cheaper copycats , known as biosimilars, hit the market. However, AbbVies’ monopoly barely wavered.

U.S. revenue for the world’s best-selling drug, which is used to treat inflammatory conditions from arthritis to Crohn’s disease, fell by a third as AbbVie offered favorable discounts to middlemen industry, called pharmacy benefit managers or PBMs, to maintain prescription volumes. But the arrival of generic competition had gone exceptionally well, AbbVies’ incoming chief executive Robert Michael concluded at an investor event earlier this year.

That was until this month, when CVS Caremark, one of the three dominant PBMs, removed Humira from its lists of preferred drugs for reimbursement. Biosimilars rose from a 2% share of all Humira prescriptions in late March to 19% in mid-April, according to data provider IQVIA.

That was driven by an increase in prescriptions for Sandoz’s Hyrimoz, CVS’s preferred biosimilar, which was dispensed to more than 10,000 patients in the week ending April 12, boosting the biosimilar’s share of new Humira prescriptions up to 43%.

What happens next is expected to be the biggest test yet of whether generic competition can serve its purpose of driving down drug prices in the US, or whether the outsized influence of the big three PBMs, whose powerful positions are drawing scrutiny from politicians and regulators. stifle market forces.

The result could have ramifications beyond the industry. US President Joe Biden has put his fight against Big Pharma at the heart of his re-election campaign, championing his efforts to lower drug prices through the Inflation Reduction Act.

Is the biosimilar market a failure for these pharma benefit drugs like Humira? Maybe in March it was, but in April it looked functional again, said Alex Brill, chief executive of Matrix Global Advisors, a healthcare consultancy.

The slowness of PBMs to promote some of the nine approved Humira biosimilars and the reluctance of pharmacists to prescribe them had cost patients and health plans $6 billion, as the biosimilars are priced at one-fifth the level of the original drug, according to a report published this month by the Biosimilars Council, an industry body. Full adoption of biosimilars would deprive PBMs of 84 percent of the $2.1 billion in net profits they were making with Humira, he estimated.

In a statement, Sandoz said AbbVies’ continued dominance was the epitome of a dysfunctional market. Misaligned incentives in the US health care system have caused significant delays and barriers to the adoption of biosimilars, resulting in significant lost opportunities for health savings, the Swiss generics maker said.

UnitedHealth OptumRx and Cignas Express Scripts groups, the other two big PBMs, have continued to give Humira a preferred position on their formulary lists as AbbVie has offered them bigger discounts. Insurer-owned benefit managers argue that these discounts are passed on to patients in the form of lower premiums, but pocket some of the discount for themselves.

OptumRx told the Financial Times it offered three biosimilars on par with Humira, including adding high and low list price options, allowing customers to choose what works best for their plan designs and members

Whether other large PBMs adopt biosimilars will determine how quickly competition for Humira grows. In addition to striking a county deal with CVS to offer Hyrimoz at a discounted price of $1,315 a month, Sandoz has a higher list price version of the biosimilar, priced similarly to Humira at more than $6,000 a month , in which it then offers a large discount to attract OptumRx and Express Scripts to promote the drug.

“We’re hopeful that the market will open up even more in 2025 and we’ll see others displace Humira as well,” Sandoz said.

AbbVie said the foray from Humira’s rivals had been anticipated and factored into its financial guidance.

Column chart of Humira's annual US revenue ($millions) showing that AbbVie's Humira will still generate billions in sales despite being off patent

PBMs are facing increasing pressure from the Federal Trade Commission, the U.S. antitrust regulator and bipartisan legislation in work aimed at encouraging the adoption of biosimilars.

[PBMs] they’re very aware of their situation: everybody hates them and they’re looking for friends, said Douglas Holtz-Eakin, president of the American Action Forum, a right-wing think tank. But the groups would rather solve their own problems, rather than have politicians solve them, he said.

Despite Sandoz’s foray into Humiras territory, generic makers remain cautious in their optimism. It’s too soon to hang up a mission accomplished sign, said Craig Burton, executive director of the Biosimilars Council. Big PBMs make money every step of the way when they stick with the brand and it’s going to take a lot to shake them out of that mindset.

CVS has put its stake in the ground that they are going to create a market where one [biosimilar] The manufacturer is rewarded, said Jon Martin, head of the biosimilar arm of Organons USA, which makes Humira’s competitor Hadlima. I think you’re going to see other PBMs gradually get to that place because if they want competitive market dynamics, they have to start rewarding biosimilars.

A Humira biosimilar from Teva Pharmaceuticals that was working with Alvotech earlier this year became the first drug to be granted interchangeable status by the US Food and Drug Administration, which allows pharmacists to replace it with Humira without consult patients. Another Organon biosimilar in collaboration with Samsung Bioepis has a pending application to be granted interchangeable status.

If interchangeable biosimilars were added to the big PBMs’ formularies next year, that would increase competition, Martin predicted.

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You would think that any PBM would want to offer every available biosimilar; creating that real competition would move the market, said Mark Cuban, the American billionaire whose drug discounter Cost Plus Drugs has a deal with maker Coherus to sell its biosimilar for $995 a month.

Cuban targets the 38 percent of private sector employers who self-insure at least one of their health plans. The real tipping point is when self-insured employers require … other biosimilars to be listed on their formularies, he added.

However, James Shin, a biopharmaceutical analyst at Deutsche Bank, said the sharp increase in biosimilar prescriptions in recent weeks would be alarming for AbbVie. I think a lot of people now expect a pretty significant erosion of the AbbVies US Humira business this year, he said.

This story was updated to reflect that Organon’s biosimilar has a pending application to be granted interchangeable status.

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