AbbVie’s Humira has a rival in the US, but costs could remain high By Reuters

By Patrick Wingrove

(Reuters) – U.S. patients will finally have access to cheaper versions of AbbVie (NYSE:) Inc’s blockbuster arthritis drug Humira this year, but the cost savings are expected to be limited.

rival pharmacist amgen inc (NASDAQ:) on Tuesday launched Amjevita, the first biosimilar version of AbbVie’s 20-year-old drug, with two price tiers. One sets a 5% discount to Humira’s monthly price of $6,922. The other will cost about half the price, but may not be widely available.

Coinsurance costs for most patients are stated as a percentage of the list price and are expected to be calculated from the highest price.

At least seven more Humira biosimilars are expected this summer and could debut at discounted list prices. Even then, patient groups, pharmacists, doctors and academics said they will be overshadowed by the US private insurance intermediary trading system and secondary market discounts called rebates.

Pharmacy benefit managers (PBMs) say the deep discounts they receive are passed back to insurers and employers to lower their overall medical costs.

Benjamin Rome, a drug pricing researcher at Harvard Medical School, said the introduction of biosimilars in the United States has not caused prices to fall as originally expected.

Unlike pills, which have extremely cheap generic copies, complex and expensive biologic drugs made from living cells cannot be exactly duplicated. Their closest alternatives are called biosimilars.

“The bottom line is that it is feasible that even if prices for Humira and biosimilars go down, this could be in the form of higher reimbursements for PBMs rather than actual lower prices being passed on to patients,” Rome said.

The United States pays the highest drug prices in the world, in part because many private sector companies do not have the power of a single government payer.

The Biden administration’s Inflation Reduction Act will allow the government’s Medicare program for people 65 and older to negotiate the prices of its most expensive drugs, but excludes drugs like Humira with direct competition.

Humira, the world’s best-selling non-COVID prescription drug, is used to treat rheumatoid arthritis, Crohn’s disease, ulcerative colitis, and psoriasis.

A 5% lower list price would result in a savings of approximately $35 per month for an individual whose coinsurance payment is 10% of the list price.

Some patients who qualify for AbbVie’s patient assistance programs pay deeply discounted rates. Amgen has released a similar savings program for their version.

There are currently about half a dozen biosimilar competing drugs in the United States. Prices for those have fallen as much as 20%, according to a report from the National Bureau of Economic Research.

Amgen has set list prices of $1,557 and $3,288 per 40-milligram pen device, a two-week supply. Amgen executive Murdo Gordon told Reuters the lower price would appeal to healthcare systems that act as both insurers and providers and typically do not seek discounts in the secondary market.

“If you’re thinking about a pharmacy benefit manager, I would prefer the high list price, because their business model is to get rebates from manufacturers and pass them on to their employer, customers or intermediate health plan customers,” Gordon said.

UnitedHealth (NYSE:) Group’s OptumRX and cigna corporation (NYSE:) said last year that they had agreements to make Humira, as well as rivals from Amgen and others, available under the same prices and terms of access. CVS Health, another large PBM, plans to add the drug to its coverage list but as a non-preferred on less favorable terms.

JC Scott, president of the Association for Pharmaceutical Care Management, said PBMs want more competition in the prescription drug market and discouraged delays sought by drugmakers.

“The bottom line is that increased competition is the most effective and sustainable way to reduce prescription drug costs,” he said.

LIST PRICES TO LOWER

In Europe, where governments negotiate drug prices, AbbVie offered up to 80% off in November 2018, a month after Humira’s patent was withdrawn, Reuters reported.

Additional AbbVie patents continued to protect it in the United States, and the company struck deals with Amgen and others to allow rival drugs in exchange for royalty payments.

AbbVie declined to comment.

Douglas Hoey, executive director of the National Association of Community Pharmacists, said he expected prices for such drugs in the US to fall by 15% to 20% after new competition entered in July.

But Robert Popovian, director of science policy for patient advocacy group Global Healthy Living Foundation, said more market and public pressure would be needed after summer entries to lower list prices.

Analysts expect the introduction of biosimilar competition to reduce sales of Humira. They are forecasting sales of $21.2 billion in 2022, falling to $13.4 billion this year and $8.3 billion in 2024, according to Refinitiv. Analysts expect Amgen’s biosimilar to generate sales of $747.6 million in 2023 and $933.8 million in 2024.

Marcus Snow, a rheumatologist at the University of Nebraska Medical Center, said he would prescribe adalimumab, the chemical name for Humira, based on price and the terms of each patient’s insurance coverage.

All things being equal, he said, he would keep existing patients on Humira and try to put new patients on the drug that is likely to have priority on formularies in the future, to avoid switching.

“I wouldn’t expect to see the price changes that we all expect to see in the first year,” Snow said.