Humira and the Looming Biosimilar Boom

 

You probably know Humira® is the world’s top-selling drug (Covid vaccines excluded). What you may not know is that unlike many of the world’s widely prescribed drugs, Humira is a biologic. Why does that matter?

Biologics are developed from living organisms and possess molecular structures that are far more complex than chemically derived drugs. They also command high price tags. Worldwide, Humira sales were almost $20 billion last year. If only there were a generic…

Actually, several are on the way. More accurately, a wave of FDA-approved biosimilar products is poised to enter the U.S. market starting next year. Many patients and payers are excited by the prospect of competition among costly biologics and the potential for reduced specialty spend. All eyes are on 2023 and beyond.

Similar, But Not Generic

Unlike generic drugs, which can be viewed as chemical replicas of their brand-name counterparts, biosimilars cannot possibly be exact copies of their respective reference product, because they too are derived from living organisms with intrinsically complex structures. A biosimilar receives FDA approval once the data show that the product is “highly similar” to the reference product and contains no clinically meaningful differences.

In addition to proven clinical safety and efficacy measures, patients and payers are hoping for meaningful differences in cost.

The Roaring ’20s

Patents for 17 major brand biologics are set to expire over the next decade. Doors will soon open to increased competition from biosimilars for products like Humira, Stelara® and Trulicity®.

To date, 39 biosimilars have been approved for the U.S. market, with nearly 50 more in the pipeline. Only 22 have made an official market debut. Many of those in circulation are heavily concentrated in the oncology space and, therefore, under the medical benefit. This next wave of biosimilars is unique in that it’s aimed at inflammatory diseases like rheumatoid arthritis, Crohn’s, psoriatic arthritis and plaque psoriasis, along with few that treat autoimmune disease.

Which brings us back to Humira. AbbVie has secured more than 120 patents for it, some of which extend into the 2030s, but one that really matters expires at year’s end. Come 2023, at least seven Humira biosimilars will launch in the U.S. These and many new biosimilars will be adjudicated under the pharmacy benefit and will usher in a host of new plan design considerations for payers.

Eyes on the Price

Most available data indicate that biosimilars will enter the market with list prices 15% to 35% below that of their brand biologics. Considering the list price for a year’s worth of Humira treatment can be upwards of $84,000, most patients and payers would welcome $12,000 to $30,000 of relief.

However, the question becomes, just how much savings will actually reach payers and patients? As rebates often get in the way of true lowest net cost, the biosimilar playing field is no exception. AbbVie may very well up the stakes—offering larger rebates to offset biosimilar price points and secure Humira’s formulary status as the lowest net cost option.

Ultimately, biosimilars will thrive in drug classes with limited rebates, where there are clear interchangeability pathways and where plans do their part to incentivize their use, whether by simply pushing therapy-naïve patients to the biosimilar product or by offering monetary incentives to patients to make the switch.

The coming year will be interesting to watch. Whatever the cost savings turn out to be, in the near term at least half are estimated to come from Humira biosimilars.

Pump the Brakes?

We can’t talk about a potential biosimilar boom without mentioning the recently passed Inflation Reduction Act. The massive piece of legislation contains several key provisions designed to bring down prescription drug costs under Medicare, while leaving the door open for biosimilar competition. (Biosimilar manufacturers will be allowed to request a delay in brand-name drug price negotiation if the associated biosimilar product is poised to hit the market within 2 years).

However, a number of industry experts in and outside of pharma believe the bill will produce unintended consequences, including the potential for reduced investment in biosimilar research and development and cost-shifting to the commercial market that will negate the savings biosimilars might otherwise bring. It’s all speculation at this point since many provisions in the IRA won’t take effect until later in the decade.

For now, we still have much to monitor in 2023. It will be a good study on how quickly the markets shift toward mainstream adoption of biosimilars, and how the blockbuster biologics like Humira respond to the competition.

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