Abbvie manoeuvres to defend Humira to the last

Abbvie's latest move to shore up Humira sales against a biosimilar onslaught involves politically sensitive price hikes.

The era of Humira sales growth is nearly at an end. But Abbvie wants to make the most of its megablockbuster before it finally falls. The writing is on the wall in Europe, but continued price rises in the US could help the company offset incoming biosimilar competition.

Abbvie’s chief executive, Richard Gonzalez, indicated last week that the company intended to wring all it can out of Humira’s last years using “mid-single-digit” annual price increases. Whether the group will be able to carry out this plan in the current political climate is a separate question.

If Abbvie can indeed get away with a 5% rise per year until 2023 – when Humira biosimilars are set to hit the US – the branded product’s list price would grow by nearly 28% between now and then.

Wringing the most out of Humira: how US price rises could offset biosimilars
Humira price per month ($)* Biosimilar price per month ($)**
2018a 2019e 2020e 2021e 2022e 2023e 2023
4,740 4,977 5,226 5,487 5,761 6,050 3,629
*Assuming 5% rise per year; based on list price of $2,370 per 40mg syringe, given every other week. **Assuming 40% discount to Humira list price. Source: EvaluatePharma (NADAC). Inspired by @ZacharyBrennan.

A hike of this amount would help protect the franchise from sliding European revenues. It would also give the company extra leverage to compete with US biosimilars manufacturers. 

Assuming that US biosimilars are priced at a 40% discount to the branded product in 2023, Abbvie could slice a similar amount off its product and end up with a price that it was charging not too long ago. According to EvaluatePharma, Humira cost around $3,600 per month in early 2016. 

The first copycat to reach the US is set to be Amgen’s Amjevita – the company has agreed to a January 2023 launch date – while others are due to follow throughout that year. Abbvie’s latest deal yesterday, with Momenta, currently makes that company’s biosimilar the last to launch, in November 2023. Momenta's M923 is one of the two biosimilar assets it is keeping having decided mostly to exit the space (A memorable first biotech moment for Momenta – for all the wrong reasons, October 15, 2018).

But Abbvie has not had it all its own way. Notably Boehringer Ingelheim has so far not played ball, choosing to continue its legal battle rather than settle with Abbvie. That’s company’s contender, Cyltezo, could be a wildcard.

Upcoming US Humira biosimilar launches
Biosimilar Company US entrance date
Amjevita Amgen  January 31, 2023
Imraldi   Samsung Bioepis June 30, 2023
Hulio Mylan July 31, 2023
Hyrimoz Novartis September 30, 2023
MSB11022 Fresenius Kabi September 30, 2023
M923 Momenta November 20, 2023
Cyltezo Boehringer Ingelheim FDA approved, no agreement with Abbvie
Source: company press releases.

If the biosimilar players go for bolder discounts in the US, however, this could upend Abbvie’s strategy. Many are assuming that US biosimilars will come in 40-50% cheaper than the branded products but, with the market still in its infancy, this is by no means certain.

The level of discount applied to biosimilars differs between countries owing to the different ways drugs are paid for in each market. The US, with its fragmented payer system, seems unlikely to bring about the aggressive discounting seen in some other countries.

Even branded drug makers have had to make big discounts in the face of biosimilar competition: an example concerned Abbvie, which was recently forced to cut the price of Humira by 80% in an unnamed Scandinavian country to win a tender. Here Abbvie appeared to be sacrificing price for volume; this deal covered the entire TNF segment, so was probably worth winning in terms of patient numbers.

Mr Gonzalez played down the importance of this agreement on the company’s third-quarter earnings call last week. He noted that these kinds of huge discounts were only likely to be seen in countries with a national tender process, as seen in the Nordic region, which only account for 4-5% of Abbvie’s overall international sales.

Even if US biosimilar discounts end up being bigger than expected, it is worth noting that Humira is a hugely profitable product, with manufacturing costs coming in at around 2% of its price, according to Bernstein analysts.

Hiking prices before the arrival of cheap competition is standard practice in the drug industry. With Humira leaving a huge hole to fill, Abbvie needs to get away with as much as it can. Maybe only massive political pressure stands in the way of Abbvie’s last defence of its best seller.

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