In 2003, a little drug named Humira hit the market under the name DE27. Analysts believed at the time that Humira, which was approved to treat Rheumatoid Arthritis, would eventually generate between $500M and $1B in sales annually. In 2021, Humira’s global sales totaled $20.7B. Lifetime earnings have eclipsed $200B. For comparison, the next biggest blockbuster drug was Pfizer’s Lipitor, which is still racking up $2B in annual sales, has brought in $160B in lifetime revenue.
Humira’s rapid takeoff can be traced back to 2013 when Abbot Laboratories spun off Humira to form AbbVie and the new company built a patent-wall around their cash-cow. All told, AbbVie has filed 250 patient filings extending their legal monopoly an additional 6 years and expanding Humira’s approved use to now treat 10 conditions from psoriasis to Chron’s and colitis.
Humira has been a thorn for employer sponsored health plans, where the annual cost of covering Humira can top $70k per patient. Copay assistant and manufacturer financial aid programs notwithstanding, Humira routinely sits at the top of most employers claim reports. And while that number is large for a single drug, AbbVie’s new Skirizi clocks in at $200k/year.
But on January 1, 2023, Humira’s rein finally comes to an end as its U.S. patent expires and biosimilars will begin flooding the market. Employer sponsored plans will yield a lot of influence especially self-insured employers who don’t have to rely on the large PBMs to determine which drugs are covered or not and if/how rebates will influence biosimilars placement on their formularies.
While the first biosimilars will launch in 2023, only Amgen’s Amjevita is approved for an early launch in January. Five follow-on biosimilars are approved to launch in later mid-year.
Will competition bite into Humira’s massive sales?
We can look to the European market where biosimilars where first approved back in 2018
In these countries, there are typically mandated discounts to the originator drugs once biosimilar competition arrives. While Germany and the UK allow free pricing, there is usually a discount negotiated anywhere between 10-25%. With Humira, however, Germany has seen discounts on biosimilars up to 40%, especially with Hyrimoz and Imraldi, which is unprecedented and might hint at the future of biosimilars on the market.
What’s most telling is that by the end of 2019 – two years after Humira’s monopoly in Europe expired - nearly 35% of patients had been switched from Humira to a biosimilar
Why Self-Funded Employers are in the Driver’s Seat
The odds of AbbVie maintaining its market clout in the U.S. with Humira is largely based on its ability to negotiate with insurers for prime formulary placement. With a fully insured health plan, plan sponsors relinquish their control to the insurance companies (which own their own PBMs) over what drugs are covered and forgo any rebates that AbbVie is doling out.
Self-funded employers, however, yield significant control as plan fiduciaries to manage their plan assets. The ability to negotiate PBM contracts, customize formularies, and obtain rebates and manufacturer remuneration are in the plan sponsor’s domain. Wise employers understand their leverage and are already working to ensure that their PBM contract language favors lowest drug net-cost and not list prices and that their PBMs aren’t incentivized in any fashion to cover one medication versus another.
2023 will be a fascinating year to watch.
