AbbVie stated that its net revenues (after discounts and rebates) for its adalimumab brand Humira® was $18.6 billion in 2022. The first adalimumab biosimilar was launched in January 2023, and the majority of the pack launched in July 2023. After 18 months of biosimilar availability in the drug class, utilization of adalimumab biosimilars has only now started to rise. However, the overall savings obtained through the existence of biosimilar competition has been remarkable.
When viewing reports of future biosimilar savings, I am skeptical. Several organizations have analyzed projected biosimilar savings, and I have been reluctant to spend much time on them. They seem to be based on assumptions that are too subject to highly variable market conditions. They may turn out to be somewhat accurate predictions in the end, but I am much more confident in estimates based on actual experience. The Association for Accessible Medicines (and its Biosimilar Council) calculated the total savings accrued by biosimilars since their introduction in this country, and the numbers have been impressive, even though perhaps conservative. In just 2022, prior to the introduction of adalimumab, the savings obtained from all biosimilars was $9.4 billion. Since the launch of the first biosimilar in the US, Association calculated $23.6 billion in all biosimilar savings. What have we saved with adalimumab biosimilars alone?
Calculating System Savings From Adalimumab Biosimilar Competition
In this article, I attempt to quantify the actual savings accrued to the US healthcare system from adalimumab biosimilar competition alone. The methodology is simple, and therefore the limitations are many. But it is a commonsense look at the net earnings figures, specifically those reported by the manufacturers (or marketing partners), compared with AbbVie’s peak US earnings for Humira in 2022, on the eve of Amgen’s biosimilar Amjevita® launch.
In many instances, the biosimilar maker did not disclose either net revenues for their specific adalimumab biosimilar or for sales in the US only. In those cases, estimates were used, which were generally less than 1% of total expenses on any adalimumab. This is supported by the utilization data for 2023 and through the first two quarters of 2024, with the exception of Sandoz’s Hyrimoz®, its unbranded product, and its co-branded biosimilar with Cordavis.
To be conservative, I assigned a minimum amount of $10 million in net revenues for any manufacturer in 2023, unless their actual net revenues were reported to be below this figure. For the first two quarters of 2024, I assigned a floor of $25 million in net revenues to any manufacturer that did not disclose their figures (unless utilization figures merited a somewhat higher figure, such as Sandoz’s).
In the case of Hyrimoz and its unbranded and co-branded forms, the company announced its 2024 first-half earnings on August 8. The company does not reveal its earnings by biosimilar product (or by country, using the North American region instead). Sandoz’s total biosimilar sales for the first two quarters of 2024 were $1.3 billion (vs. $1.0 billion for the same period in 2023), growth that is partly attributed to the US uptake of Hyrimoz and its acquisition of Coherus’ Cimerli® (ranibizumab), among others. Total net sales of all its drugs increased by $140 million in North America over that same period, meaning that its Hyrimoz-related revenues in the US alone were somewhat less than this figure. As a result, I used $100 million as the 2024 guesstimate for Sandoz’s Hyrimoz-related products. Although this estimate may be off the mark, it represents only 2.4% of total adalimumab expenditures to date; therefore, the margin of error is still relatively small.
The Adalimumab Biosimilar Savings Figure Is….
Based on this back-of-the-envelope calculation, using the sum of all reported and estimated net earnings, the total savings through 18 months of adalimumab biosimilar competition is $10.96 billion.
This is based on the following assumptions:
- A total Humira expenditure of $27.9 billion over 18 months if biosimilar competition did not exist ($18.6 billion in 2023 + $9.3 billion in Q1 + Q2); this assumes stable Humira revenue for AbbVie without biosimilar competition
- The estimated expenditures for all adalimumab biosimilars in 2023 was $12.44 billion (dominated by Humira’s $12.2 billion in reported earnings)
- The estimated expenditure for Q1/Q2 2024 was $4.5 billion (with Humira accounting for $4.1 billion)
Notably, this savings figure does not account for another complicating factor in the base situation where there was no biosimilar competition: In that case, AbbVie might be expected to raise its prices by an average of at least 5% per year. Using the 5% figure, the resulting savings would be $12.84 billion, a significant increase.
This calculation of $11 billion in adalimumab biosimilar savings does not consider the important question of who accrued the savings. We cannot examine how much was achieved through rebates to PBMs or payers, versus adalimumab purchases through low-WAC pricing (which are associated with little or no rebate). Furthermore, it may be more difficult to tease out real savings estimates in the future because of the increasing sales through pseudomanufacturers like Cordavis, whose specific drug revenues may not be disclosed.
Earlier this year, IQVIA calculated that these adalimumab biosimilar savings could have been substantially larger if Humira use was converted immediately by payers and PBMs to biosimilar adalimumab. The organization stated that a maximum of $5.7 billion in additional savings could have been obtained.
In the final tally though, $11 billion in savings, is a huge figure that was achieved in only 18 months. With anticipated greater uptake of low-WAC adalimumab biosimilars through the end of 2024, the Q3 plus Q4 savings figure will certainly exceed that for the first half of this year. That would mean another 40% lower expenditures for adalimumab for the full year compared with 2023.
