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After generating $208 billion in sales over two decades, AbbVie’s (New York Stock Exchange: ABBV) the monopoly on its world’s best-selling therapy, Humira (adalimumab), is set to end this week as imitation versions enter the US market.
A self-administered injectable indicated for rheumatoid arthritis and other autoimmune conditions, Humira generated worldwide sales of $21 billion for AbbVie (ABBV) in 2021, accounting for more than a third of its top line and becoming the world’s best-selling drug for the tenth consecutive year.
Thanks to patent extension strategies and legal settlements, the company has maintained its best-selling status since former parent company Abbott Laboratories (ABT) obtained the first US approval for Humira in 2002.
After the 2013 spin-off, AbbVie (ABBV) added multiple autoimmune indications while building a so-called “patent maze” to cement its legal monopoly on Humira for another six years after its parent patent expired in 2016.
Since first approval in 2002, the company and its subsidiaries have applied for over 250 Humira patents in the US, of which 130 have been grantedaccording to the Initiative for Medicines, Access and Knowledge, which tracks drug patents.
According to research firm SSR Health, since 2016, Humira’s annual list price has risen 60% to more than $80,000, while AbbVie (ABBV) has filed lawsuits and settled to delay the threat of biosimilars.
In 2016, as Amgen (AMGN) was on the brink of winning FDA approval for a Humira biosimilar, AbbVie (ABBV) filed a lawsuit alleging that the rival was violating 10 of its patents. About a year later, the two parties reached an agreement with Amgen (AMGN), agreeing to delay the launch of the Humira biosimilar until 2023.
Similar deals occurred with nine other drugmakers, delaying its market entry until 2023, even as Humira’s price has increased 30-fold since 2002, including an 8% increase this month. If not for that delay, one analysis found, Medicare, which covered the cost of Humira for 42,000 patients in 2020, would have saved more than $2 billion between 2016 and 2019.
Amgen (AMGN), the first to reach an agreement with AbbVie (ABBV), has a January 31 launch date for its Humira biosimilar Amjevita, while Samsung biological and partner Organon (OGN) is set for a June launch for its Humira version Hadlima.
In 2022, the FDA rejected Alvotech’s (ALVO) plan to launch a Humira biosimilar with its partner Teva Pharmaceutical (TEVA), citing manufacturing issues. The agency agreed to reconsider its offer after inspecting the company’s production site in Iceland, with a decision expected on or before April 13.
Meanwhile, eight other drugmakers, including Pfizer (PFE), Viatris (VTRS), Roche (OTCQX:RHHBY) (OTCQX:RHHBF), Johnson & Johnson (JNJ) and Fresenius (OTCPK:FSNUF) (OTCPK:FSNUY) they have wobbled release dates throughout the year.
However, its impact on US medical spending is difficult to predict amid concerns about pricing power and the likelihood that many patients will switch. Low-cost biosimilars are not exact copies of Humira but share clinical characteristics with the reference product.
“Although they are finally coming to market, there are several obstacles to Humira’s biosimilars reducing healthcare costs,” said Ralph Pisano, president of RemedyOne, a formulary and reimbursement optimization company.
“First, given the challenging nature of the conditions Humira treats, such as Crohn’s disease, physicians will be reluctant to switch patients who have achieved stability on Humira to another medication, even if it offers cost savings.” he explained.
According to Pisano, AbbVie (ABBV), which is estimated to have paid more than $5 billion in rebates to PBM in 2021, can match the net cost of biosimilar manufacturers with only a 10% increase in sales.
AbbVie’s (ABBV) agreements with biosimilar makers, under which the company is entitled to an estimated 10% of Humira’s net sales, also “effectively create a floor on how much prices can drop,” Pisano added. .
“Ultimately, Abbvie’s reimbursement agreements with PBMs and plans strongly stipulate that they cannot provide an advantage, such as lower out-of-pocket costs, for biosimilars for the benefit of the patient,” he opined.
RemedyOne and its affiliates, along with form optimization firm Nuwae, the Humira project biosimilars will gain up to 5% market share by 2023 before extending it to a maximum of 20-25% by 2026.
With rivals close behind and nearly a third of AbbVie’s (ABBV) gross revenue at stake, the company’s stock has lost over the past six months, trailing the rest of Big Pharma, as indicated in this chart.
AbbVie (ABBV) international revenue fell ~46% between 2018 and 2021 as the company lost the composition of matter patent for Humira in most EU countries, allowing the first biosimilars to enter the market European in 2018.
Read: Seeking Alpha contributor Edmund Ingham recently maintained his buy rating on AbbVie (ABBV), arguing that the Humira patent cliff is “not going to derail the strong progress of this company.”
