Adalimumab Biosimilar Savings Will Cause Payers to Rejoice, for the Short-Term Anyway

We are heading down the home stretch for the July launches of multiple adalimumab biosimilars, and much is occurring that is noteworthy. Coherus’ announcement earlier this month that it will be discounting 85% off of Humira®’s list price set off a great deal of discussion. The implications can be far reaching, for payers, the reference manufacturer, and for the biosimilar industry as a whole.

Adapted from Samsung Bioepis Q2 2023 Biosimilars Report

AbbVie set Humira’s 2023 wholesale acquisition cost (WAC) at $6,922 for a two-pen carton. Upon its introduction in January, Amgen offered a two-prong pricing option for its biosimilar Amjevita®, with the low WAC price being $3,114, or a 55% discount off Humira’s WAC (for the 40-mg formulation). We assume that AbbVie has provided rebates in the area of 50% to match the net price of Amjevita. Coherus, whose Yusimry® will launch in July, set its WAC price (again, the 40-mg formulation) at $995, or an 85% discount off Humira’s WAC. Coherus then set a price of $569 (plus shipping and dispensing) for Yusimry when it is obtained through Mark Cuban’s CostPlus pharmacy. This represents a 92% discount off Humira’s WAC.

Keep in mind that this low-concentration formulation represents only 15% of total Humira utilization. At the moment, we do not know if biosimilars with the high-dose concentration (80 mg) will be priced at a higher tier. This certainly represents a possibility, but a significant price difference could result in a greater shift towards utilization of the low-dose form.

With their deeply discounted pricing, Coherus may have complicated matters for themselves from another perspective: According to a report from Reuters, AbbVie and Coherus are trying to resolve a dispute over whether the biosimilar maker has violated its licensing agreement, allowing it to launch Yusimry in the first place. Although the exact terms of the agreement are not known, we understand that each of the licensing agreements signed with AbbVie incorporates a royalty payment back to the reference manufacturer. Is AbbVie unhappy about the royalties it would receive based on the low price, amidst its larger revenue losses from declining Humira sales?

Sustaining Biosimilar Competition

I am more concerned here about the health of the biosimilar industry, and payers should be worried, despite their immediate savings on adalimumab. The WAC set by Coherus would reflect a price similar to that of adalimumab’s initial price in 2002. No payer would complain about that. Of course, pharmacy benefit managers might, based on the loss in rebate revenue. However, where does that leave the other adalimumab biosimilar manufacturers?

It has taken at least 4 years for any of the medical benefit products subject to biosimilar competition to reach a “pricing floor.” During this time, the biosimilar manufacturers have had ample time to recoup their investment, and perhaps continue to make additional profit, even at this low floor price (which has remained at around a 70% discount from the reference product’s WAC at the time of biosimilar launch). Reaching a pricing floor within 2 quarters of launch is a new experience. It may convince biosimilar makers that they should invest in other areas of medicine, despite efforts to lower the costs of bringing biosimilars to market.

This is especially troubling in view of the upcoming ustekinumab biosimilar launches, which may pose a very similar situation of licensing agreements that will align competitors launch dates within a short period, 6 or more competitors, and the potential for immediate, fierce price cutting.

The number of biosimilar manufacturers is limited. Pfizer has no pipeline. Coherus has more innovative products under investigation than it does biosimilars. Boehringer Ingelheim has put all its biosimilar eggs into one basket—adalimumab. Viatris sold its biosimilar business. Whereas Formycon, Bio-Thera, and Alvotech have recently entered the arena, they are each dependent on partner companies to either manufacture or commercialize their biosimilar products.

If companies see little future opportunity for reasonable profits, competition for biologics with expiring or expired patents will dwindle. How then will payers save money on these expensive specialty products?

Note: This article was updated on June 21, to correct an error in the original version. Coherus, not Celltrion, announced its 85% WAC discount. Celltrion has not yet disclosed any pricing information as of this date.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.