With the reporting of AbbVie’s second-quarter earnings, we are getting a better understanding of the substantial savings accruing to the US health system as a result of biosimilar competition. AbbVie reported yesterday that net US revenues from Humira dropped 26% in the US for the six months ending June 30th to $6.4 billion. For the second quarter alone, this figure also fell 26%, to $3.4 billion. Keep in mind, these figures are net revenues, already accounting for discounts and rebates.
These declines were not the result of significantly lower utilization. Amjevita®, which was introduced at the end of January, has not been a good sales story for Amgen to date; Amgen earlier announced that Amjevita uptake has been meager for the first quarter and this was further reinforced by the company’s second-quarter earnings report on August 3, when it recorded only $19 million in additional revenues). As they were the only competition for Humira through the July 1 launch of the great wave of adalimumab biosimilars, the one-quarter drop in net revenue from Humira had to result from additional pricing discounts and rebates by AbbVie.
As we reported earlier, PBMs have placed their covered biosimilars at parity with Humira and have not disadvantaged the reference product; this was reconfirmed by Prime Therapeutics yesterday. Therefore, we should expect that Humira utilization will not decrease dramatically before the end of the year. However, if we extrapolate AbbVie’s second-quarter and 6-month results to the full year, Humira revenue would be around $13 billion (which would be a decrease of 40% from $21 billion in 2022). To the extent that biosimilar manufacturers (singularly or collectively) can pick up significant marketshare by year’s end, the amount of savings may be greater.
These data continue to raise alarm bells for the biosimilar industry, as the savings gained to date are not the result of biosimilar manufacturers gaining a foothold in the adalimumab market and earning a profit. It is solely the result of AbbVie having to match the competition’s price in order to retain its parity status. With the discounts put forward by many of the biosimilar adalimumab manufacturers, it will now be up to the PBMs and their clients to prefer biosimilars in 2024 to ensure the competition is here to stay.
(This post was modified Aug 3 to reflect Amgen’s second-quarter Amjevita earnings)
In the 2½ years since we last updated the denosumab biosimilar pipeline, several new manufacturing/commercialization partners have emerged on the horizon, and the first 351(k) application has been filed with the Food and Drug Administration (FDA). As importantly, denosumab, along with ustekinumab, appears to be one of the most hotly contested biosimilar categories for the near-term pipeline.
Amgen’s denosumab (Prolia®), a RANKL monoclonal antibody, is indicated for the treatment of osteoporosis in postmenopausal women. At Amgen’s first-quarter 2023 earnings conference, the company stated that US sales of Prolia reached $623 million (or an annualized estimate of $2.49 billion). This represents a 9% increase from the same quarter in 2022.
Amgen’s Xgeva® is the same compound as Prolia, but Amgen branded it separately for its different dosage schedules and indications. Xgeva is specifically indicated for (1) the prevention of skeletal-related events in patients with multiple myeloma and in patients with bone metastases from solid tumors and (2) the treatment of adults and skeletally mature adolescents with giant cell tumor of bone that is unresectable or where surgical resection is likely to result in severe morbidity. US sales of Xgeva were $384 million (or an annualized estimate of $1.54 billion), a 7% increase from Q1 2022. This implies overall estimated US revenues of approximately $4 billion for denosumab.
Prolia is injected by a healthcare provider every 6 months. Because the medication is not intended for self-injection, it is generally covered under the medical benefit. An inherent benefit to this is to optimize adherence and have patients visit the office every 6 months for evaluation and follow-up. However, there is an opportunity for health plans and insurers to disseminate via specialty pharmacies, which would threaten providers’ buy-and-bill reimbursement. In fact, data provided to BR&R by IQVIA indicates that 14% of Prolia prescriptions are covered by the pharmacy benefit, compared with only 3% of Xgeva prescriptions. The Figure, also based on the IQVIA data analysis, shows where Prolia fits in the current osteoporosis market, at about 17%, behind alendronate, the market leader.
Data courtesy of IQVIA
Furthermore, the medication can be administered at home by visiting nursing staff; in this case, it could also be covered under the pharmacy benefit. However, Xgeva would remain firmly covered as a medical benefit drug, given as an ancillary therapy in patients receiving cancer chemotherapy.
The principal patent in the US is estimated to expire in February 2025.
The Likely Denosumab Biosimilar Competition: The Outlook in July 2023
The denosumab biosimilar pipeline today is very different than the one cited in 2021. Whereas partners Samsung Bioepis and Biogen were considered the front runner then, Sandoz is certainly in the lead today. The number of potential competitors has been significantly expanded, with European and Southeast Asian manufacturers dominant. A few players new to the US biosimilar market also appear, such as Gedeon Richter and Intas. Keep in mind, this pipeline analysis is based mostly on potential players who have undertaken Phase 3 trials of their investigational products. It may be possible in the future that a biosimilar maker obtains FDA approval with only Phase 1 or 2 evidence.
Sandoz. As reported earlier this year, Sandoz filed the first US biologic licensing application for a denosumab biosimilar February 6. It is seeking approval for both Prolia and Xgeva biosimilars (clinical trials were conducted for the osteoporosis indication). Based on the filing date, it could receive an FDA decision as early as late 2023, though the launch would be expected no earlier than February 2025.
Samsung Bioepis/Biogen. Samsung Bioepis completed its Phase 3 trial of SB16 late last year, and it is possible that the 351(k) submission could be filed later this year.
Celltrion. Celltrion, which was also cited in the 2021 review, was scheduled to complete its Phase 3 trial of CT-P41 in March 2023 (this was not confirmed), which could also result in a biosimilar application in late 2023 or early 2024.
Teva. The Phase 3 trial of TVB-009 was completed in June 2023, which may mean a 351(k) application filed in the second or third quarter of 2024 (and thus an FDA decision in the first or second quarter of 2025).
Fresenius Kabi. FKS518’s Phase 3 trial should conclude at the end of this month, which would put it on a track similar to that of Teva for filing and potential approval.
Gedeon Richter. A late-stage trial is set to conclude in November 2023. Hikma Pharmaceuticals, which has a limited US footprint, signed a contract with Gedeon Richter to commercialize its biosimilar agent RGB-14-P should FDA approval be obtained (perhaps in late 2024 or 2025).
Other Potential US Denosumab Competitors Completing Studies in 2024
Assuming FDA approvals and licensing agreements are not signed with the reference manufacturer, each of the drug makers above should be preparing for launch just around the February 2025 patent expiration date.
Another group of prospective denosumab biosimilar manufacturers should be wrapping up their late-stage trials in 2024, and they include Alvotech (AVT03), Biocon (Bmab1000), partners Shanghai Henlius and Organon (HLX14), and Intas (INTP23). Unless their individual developmental consultations with the FDA determine that Phase 3 trials are no longer necessary for this drug category, they will be at a distinct disadvantage with later market entries.
A new senate proposal seeks to remove the Food and Drug Administration’s (FDA’s) interchangeable designation. If passed, it would enable all biosimilars to be considered interchangeable with their individual reference products.
The Biosimilar Red Tape Elimination Act was introduced July 13, 2023 by Senators Mike Lee (R-UT), Ben Ray Lujan (D-NM), Mike Braun (R-IN), and J.D. Vance (R-OH) to further increase competition within the biologics market.
Senator Mike Lee (R-UT)
The US remains the only major market where any approved biosimilar cannot be freely interchanged for its reference product. This key issue directly affects access to biosimilar agents and potentially to their utilization. The former is related to the cost of performing switching studies that may be required by the FDA to gain the designation. The latter is related to the fact that interchangeability is no guarantee of coverage by the payers, perhaps the most important factor in actual utilization of biosimilars.
In the past, we have published posts on the “value” of interchangeability, both from the perspective of the biosimilar manufacturer and the health system. The cost of conducting multiple switch trials (and the time needed to conduct them) adds tens of millions of dollars to the cost of commercialization for drug makers. Manufacturers have often taken the approach that they would seek conventional biosimilar approval first, and then seek to obtain interchangeability (e.g., Boehringer Ingelheim, Samsung Bioepis/Organon, Amgen, and Pfizer have all taken this approach with their adalimumab biosimilars). Interchangeability has any value only if the reference product retains significant market share over time, because the specific biosimilar can only be interchanged with that reference biologic.
In fact, the term was only included in the biosimilar-enabling BPCIA to permit automatic pharmacy substitution of the reference product with the specific biosimilar. It was never intended to differentiate two biosimilar products based on quality.
All Biosimilars Shall Be Deemed Interchangeable
The Biosimilar Red Tape Elimination Act would amend the federal code to state that “all biosimilars, upon approval, shall be deemed interchangeable.” Instead of voiding the term “interchangeable” altogether, the Act would retain it to minimize disruption of individual states’ existing pharmacy regulations.
The real-world data on the safety and efficacy of biosimilars firmly support the move to eliminate the interchangeability designation. Experts have argued that these multiple switching studies are of very limited or no scientific value.
Sarfaraz Niazi, PhD, an industry veteran and scientist who consulted on the bill, stated that it will remove the perception that biosimilars are of two classes of quality and will thus help resolve the educational issue that exists around the quality of biosimilars.
This bill is an update to Senate Bill 6, submitted in November 2022 during the 117th Congress by Senator Lee, which sought to amend language associated with interchangeability. The current proposal seems a more aggressive attempt to remove the existing interchangeability provision. It has at least a measure of bipartisan support in its introduction, and plenty of time in this term for its progression through committee.
A tidal surge of biosimilar competitors to Humira® launched this week, with at least a couple of surprises. Last month, Coherus announced their huge price discount, based on the reference product’s wholesale acquisition cost (WAC). Samsung Bioepis/Organon has decided to meet that 85% discount. None of the other competitors raised the ante, but Sandoz and Biocon Biologics revealed via Email that they are introducing their unbranded adalimumab biosimilars at an 81% and 85% discount, respectively.
Sandoz and Biocon also noted that it is selling their branded products at a 5% discount. Among the adalimumab biosimilar launches, several other manufacturers have decided to modestly discount their brands (see Table). This, of course, has little bearing on net price. It simply means that companies that resolved to shadow Humira’s price have more room to negotiate rebates.
We can’t be sure at this juncture, but we do have a couple of implied numbers to discuss. With Amgen’s January launch of its two-tier WAC option (a 5% or 55% WAC discount), we can assume the manufacturer planned to offer a net price that was similar (or a bit below) what AbbVie would offer in 2023. This was estimated to be a 50% rebate, according to several sources.
If this is accurate, the net price of Humira’s 2-pen package would be $3,461 ($6,922 X 0.5). We would also assume that Coherus and Samsung Bioepis/Organon, which are offering 85% WAC discounts, and Sandoz’s unbranded version, which is offered at an 81% discount, is not subject to rebating. Based on this simple calculation, these specific products are 25% to 30% below the estimated net cost for Humira, as of today. Mind you, the potential fluidity of the situation at hand!
BIOSIMILAR WAC DISCOUNTS RELATIVE TO HUMIRA PRICES
Brand
Manufacturer
WAC Discount
Formulation/Comment
Abrilada
Pfizer
Not announced
LCF
Amjevita
Amgen
5%
LCF
Amjevita
Amgen
55%
LCF
Cyltezo
Boehringer Ingelheim
5%
LCF (interchangeable)
Hadlima
Samsung Bioepis/Organon
85%
HCF
Hulio
Biocon Biologics/Kyowa Kirin
5%
LCF
(Unbranded)
Biocon Biologics/Kyowa Kirin
85%
LCF
Hyrimoz
Sandoz
5%
HCF
(Unbranded)
Sandoz
81%
HCF
Idacio
Fresenius Kabi
5%
LCF
Yuflyma
Celltrion
5%
HCF
Yusimry
Coherus
85%
LCF
HCF = high-concentration formulation; LCF = low-concentration formulation. Data gathered from corporate websites, E-mail communications.
The high-concentration formulations (100 mg/mL) account for 85% of all Humira use today. However, it should also be pointed out that the WAC prices of the biosimilar high-concentration products are not necessarily higher than that of the low-concentration (50 mg/mL) products. For example, Sandoz is offering both branded and unbranded in its high-concentration form.
As illustrated, WAC pricing covers an extremely wide spectrum. Yet we don’t think the net pricing variation is that wide. In the deals being negotiated, companies are trying to retain as much value as possible, while somehow separating themselves from the wild competition. One can assume that if these >80% discounts are carried through the end of the year, net prices for the modestly discounted products will trace a similarly steep path.
