The Institute for Clinical and Economic Review (ICER) released a report this week that highlighted seven pharmaceuticals with “substantial price increases on top of already high current spending.” According to ICER, these seven agents accounted for billions in unnecessary expense in 2017 and 2018. AbbVie’s Humira® and Genentech’s Rituxan® topped the list, with Neulasta® coming in at number 5. The first two are not that surprising, because relatively high price increases (even net rebates or other considerations) are common reactions of pharma companies to imminent new competition. This has been typical for small molecule brands facing patent expiration and generic challenges. In 2017 and 2018, AbbVie may have been more concerned that it could not reach a settlement with the several biosimilar manufacturers working on adalimumab agents. Genentech also faced similar conditions with Rituxan. On the other hand, Amgen was already facing strong competition from Zarxio® and Granix®.
ICER specified, “Net price increases for the seven drugs unsupported by new evidence were responsible for increasing total US drug spending by more than $5.1 billion from 2017 to 2018. The drug whose price increases accounted for the greatest single impact on spending was Humira. Humira’s average US price increased 15.9% over this period.” I emphasize, this was net price not list price increases.
In a presentation at the Drug Information Association (DIA) annual meeting, Janet Woodcock, MD, Director of the FDA’s Center for Drug Evaluation and Research, stated that 83 biosimilar development programs were now ongoing, for a total of 38 different biologics. This implies that biosimilar interest in several new classes of biologics remains strong from established and prospective manufacturers.
Tanvex BioPharma announced in late September that its TX-01 filgrastim biosimilar candidate was not approved by the FDA. According to Tanvex, the FDA’s complete response letter did not cite any data deficiencies that might require additional studies. This leads one to suspect that production facilities problems may be the issue. The soonest Tanvex can expect a new FDA decision is 6 months from its new application submission date. As a result, Zarxio® and Nevistym® remain the only two biosimilar filgrastim agents (plus the follow-on product Granix®) to compete with Amgen’s Neupogen.
On May 7, the Senate
Judiciary Committeeheld hearings
on how to clear the patent thickets obstructing access to lower-cost
biosimilars. One of the key avenues raised during the hearings was moving the
Federal Trade Commission (FTC) directly into the fray. We asked Kevin M. Nelson,
our go-to expert on intellectual property issues, for his take on this
possibility.
Biosimilars Review
& Report: Kevin, thanks for trying to help us sort out these issues!
Let’s set the stage first: Has the FTC dipped their toes into intellectual property
(IP) and patent issues in the past?
Kevin Nelson, Esq:
The way you phrased the question is appropriate. Yes, they have dipped their
toes into patent issues a little bit. It’s sort of a dicey field for the FTC.
Kevin M. Nelson
To provide a bit of background, two matters come to mind. The first, Federal Trade Commission v. AbbVie, had to do with Androgel®, where the FTC alleged violations of section 5 of the FTC Act and sham litigation. This is usually a civil cause of action brought by generic companies. (Sham litigation is a form of anticompetitive litigation that is “baseless or otherwise without any legitimate foundation.” It is usually a delaying tactic to prevent product competition for extended periods of time). Antitrust violations can be difficult to prove, so sham litigation, which can also be a high hurdle, is sometimes alleged. Interestingly, in the Androgel matter, the FTC’s decision did make it past the District Court level, but I believe it is currently on appeal. But there was a large disgorgement ordered by the District Court in the $500 million range. One of the primary things the Commission said was that the lawsuits filed delay competition, and those lawsuits were objectively and subjectively baseless. So the FTC did wade into the patent issue.
The second was Federal Trade Commission v. Bristol-Myers Squibb, which involved BuSpar®. In its investigation, the FTC found that there was not only false listing in the Orange Book but false statements to the US Patent Office by Bristol-Myers Squibb, and also baseless allegations of patent infringement.
So the FTC has dipped its toes in the water in evaluating
the patent issues and the merits of patents as part of its jurisdiction of
looking at whether there is anticompetitive injury. The focus has been more in
the FTC Act versus one of the traditional antitrust acts.
THE FTC’S AUTHORITY IN PATENT DISPUTES
BR&R: Will legislation
be necessary to provide the FTC the necessary authority to investigate patent filings
that hinder competition?
Nelson: The FTC
already does have the authority to bring causes of action where there has been
unlawful use of patent rights in order to delay or harm competition. That’s the
FTC’s mission—to protect competition. If there is any action to harm
competition, the FTC has the tools to address that right now. The Androgel matter
is a perfect example. The FTC used the FTC Act, not the Antitrust Act, but the
result was the same—a significant disgorgement of profits, which is the penalty
that we as consumers would want to occur if someone was abusing their patent
rights.
BR&R: One way
the FTC may intervene in the biosimilar patent thickets is to focus solely on
the expiration of the composition-of-matter patents when deciding on the timing
of a biosimilar launch. Might this start us on a slippery slope? In this case,
the Commission would disregard patents involving new formulations, new manufacturing
processes, new indications, etc, as a separate, less-essential group. We’re not
talking necessarily about invalid or obfuscating patents per se.
Nelson: It will
be interesting to see exactly what the legislative proposal will say. Right
now, it’s a bit unclear.
The first problem that we’re seeing, is that the FTC has the
tools to act, but these tools can only be used after the fact, or after
competition has been harmed.
Problem 2 then becomes, if we try to do something before the competition is harmed (or to prevent this harm) and we allow some patents to be asserted, we will be getting into constitutional concerns. If you bring lawsuits based on patents, is that a violation of Takings Clause? [Editor’s Note: The Takings Clause is found in the Fifth Amendment of the Constitution, and prohibits the government from taking personal property without just compensation.] A product may be protected by subsequent, legitimate patents; we can’t prejudge that.
The Constitution prohibits the government, at least right
now, from saying that “you cannot assert these patents.” That also relates to a
petitioning or free speech issue. If I file a lawsuit because I have a patent, and
the FTC says I can’t file that lawsuit, does that interfere with my free speech
rights? The answer is yes, unless your lawsuit was objectively and subjectively
baseless.
That’s where we get into FTC’s dilemma now. It will be very
interesting to see the remedies that will be proposed, especially since there
may be better avenues out there.
DOES THE FTC NEED NEW LEGISLATION TO ACT?
BR&R: It
sounds like the FTC doesn’t lack the authority, but legislation would have to
be passed to further define how it can enforce this authority.
Nelson: I don’t
know that we need new legislation to further define the FTC’s authority, rather
there needs to be direction in terms of their priorities. The FTC could enforce
these issues, but that has been low on its priorities.
For example, the Commission have been very active in the
pay-for-delay area. A lot of their actions are the result of anticompetitive
acts that took place in the early 2000s. We’re not seeing much action today where
the government is trying to punish companies for wielding an unfair number of
patents—where many of them are improperly issued or should not be enforced at
all. That needs to be more of a policy focus or objective of the FTC.
BR&R: Assuming
the FTC does get involved more proactively in policing anticompetitive patents,
do you think that might affect drug manufacturers who intend to seek new
formulation/manufacturing patents and others in the future?
Nelson: The hope
is that innovator companies would be careful in the types of patents that they
pursue and try to enforce against potential competitors. Because there hasn’t
been much enforcement in this area, we are seeing these 100-patent assertion
cases, which put a strain on resources. In some companies, we are seeing less
emphasis on a strategy of innovation and more on creating these patent thickets
to delay competition. In several open forums, the FTC has actually expressed
this view. And that’s not what we should be focusing on as a society. They should
be focusing on the next generation of life-saving therapies, not putting a
protective wall around older agents.
If the FTC is more willing to go after companies that are
enforcing a lot of these improper patents, the manufacturers may actually start
to refocus on innovation.
BR&R: When do
you think the rubber will meet the road? Will the FTC be pushed in this
direction?
Nelson: I think
we will see that legislative proposal. The better focus is on things that have an
impact on consumers, innovation, and competition. We do need legislation that
limits or prohibits product hopping or product shifting; that’s a real concern
and can be addressed. We can limit use of products that are “second-generation”
and have no additional clinical benefit to patients over the original product.
If there is no clinical benefit to the patient, then we shouldn’t be giving
them exclusivity. That takes companies away from the incentive to protect old
products and move them toward creating new innovative products.
I think a policy shift for the FTC, rather than a
legislative shift, will encounter fewer obstacles.
It seems that AbbVie has won the battle and the war. The last remaining holdout in the fight to bring a biosimilar adalimumab to market before 2023 has capitulated, as AbbVie announced May 14 that Boehringer Ingelheim agreed to the terms of a licensing arrangement. This agreement allows Boehringer Ingelheim to enter the marketplace July 1, 2023, getting a slight jump on some other licensees, but it effectively ends the protracted patent litigation that Boehringer hoped to win.
In an interview with BR&R, Molly Burich, Boehringer Ingelheim’s Director, Public Policy, Biosimilars and Pipeline, told us in October 2018, “We are committed to making Cyltezo® available to US patients as soon as possible and certainly before 2023.”
WHICH COMPANIES HAVE SIGNED LICENSING DEALS WITH ABBVIE?
Company/Partner
Drug Name
Launch Date
Amgen
Amjevita*
January 2023
Samsung Bioepis/Merck
SB5
June 2023
Boehringer Ingelheim
Cytelzo*
July 2023
Mylan/Fujifilm Kyowa Kirin Biologics
Hulio
August 2023
Sandoz
Hyrimoz*
September 2023
Fresenius Kabi
MSB11022
September 2023
Pfizer
TBD
November 2023
Momenta
M923
December 2023
Coherus
CH-1420
December 2023
*Received FDA
Approval.
However,
at that time, Ms. Burich also disclosed that Cyltezo would not be
commercialized in Europe; in October, the stampede of biosimilar manufacturers had
just left the starting gate. In addition, Boehringer had earlier decided to
drop plans to develop other biosimilars in the pipeline and focus solely on
Cyltezo. That would seem to leave Boehringer out in the cold until July 2023.
In response to BR&R’s
query, Susan Holz, Boehringer’s Director
of Communications, Specialty Care, provided the following statement: “As
we previously shared, at this point in time, our focus remains on providing
patient access to our biosimilar Cyltezo in the US, and future biosimilars
activities will be driven out of this market. Boehringer Ingelheim continuously
evaluates our business portfolio, and we assess potential strategic
partnerships to help enhance our pipeline and development capabilities. As you
know, we have stopped development activities for the rest of the world, and I
am not able to comment on specifics regarding our biosimilar in- or
out-licensing strategy.”
Boehringer Ingelheim had
reported that it is seeking the interchangeability designation for its adalimumab
biosimilar. In the possible scenario where Cyltezo won its patent challenge,
and gained the interchangeability designation from the FDA (note that FDA only issued
its final interchangeability guidelines draft this week), the marketing potential
was rosy indeed. However, suppose the FDA approves the interchangeability label
for Cyltezo. It cannot leverage it until after Amgen’s and Samsung Bioepis’
adalimumab biosimilars have launched. Will it have the same advantage? That’s
difficult to say. Payers will be anxious to grab immediate savings on this
product, and interchangeability may not be considered such a great benefit.
That is, in four years, will payers routinely switch available biosimilar
agents anyway? My guess is that health plans and insurers will be leaning in
that direction.
On the other hand, it will be easier to automatically switch patients in nearly every state. That lever will only be used if Boehringer gives payers a real reason to use it—a significantly better deal than the existing options. AbbVie offered huge discounts (on the order of 80% in some countries) in an effort to hang on to some marketshare once biosimilars were available in the EU. After all, why worry about interchangeability and switching when you can continue to use Humira® at a 75% discount?
Ms. Holz told BR&R, “In regards to interchangeability, this is a very important issue for many stakeholders, as it is the catalyst for automatic substitution at the pharmacy level, which in turn may help drive efficient use of biosimilars and maximize the cost-saving potential of these important medicines.” She added, “We were very pleased to see the Agency finalized interchangeability guidance that retained the appropriate balance between a high-bar to prove interchangeability and product-specific flexibility to make such a status attainable.”
In the next four years, the price of Humira will undoubtedly rise. This will mean that savings gained in 2023 will be little more than money lost to the system over the previous 48 months. As significantly, it represents tens of billions of dollars into AbbVie’s bottom line from a product that was approved in the US 17 years ago.
In the biosimilars arena, at least in the US, history seems
to be truncated. Policy changes occur in rapid fire succession these days, and
access scenarios don’t evolve—they just happen or they don’t! Along this brief
journey, I’ve taken the opportunity to focus on some of the sign posts that
were exceedingly poor maps for navigating the future.
One of the first blogs I wrote for The Center for Biosimilars in early 2016, involved a defeat for Amgen in its patent litigation with AbbVie regarding Humira®. No one was sure what the implications of this decision would be. Amgen was on the road to gaining approval of the first biosimilar adalimumab. The payer and investment community sensed momentum building towards the imminent takedown of the number 1 biologic in terms of sales. I referenced 2016 Humira revenue estimates of $14 billion for AbbVie, and mentioned two other prospective biosimilar makers—Baxalta and Momenta—being hot on Amgen’s heels.
In that same article, many in the investment community was under the belief that a US marketed adalimumab biosimilar would be available by 2020. Instead, January 2023 is looking more inevitable. I wrote, “The investment community believes that Amgen will come out on top; they believe that AbbVie will have $6 billion—not $18 billion—in Humira sales by 2020.”
I’m not sure that I could have been more wrong in my
assumptions or sentiments, thinking that AbbVie’s maze of 70 patents (at the
time) could be severely damaged at that time by the process to challenge patents.
This may happen today through Boehringer’s efforts, but I wouldn’t count on it.
The other major players don’t have the stomach for fighting this battle.
In 2017, Baxalta and Momenta have dropped out of the biosimilar contention for Humira’s marketshare, replaced by Sandoz, Boehringer, Coherus, Samsung Bioepis, and perhaps others. Baxalta and Momenta , one being taken over by Shire and the other facing financial realities.
Unfortunately, it will take a miracle, in the form of a Boehringer victory or even less likely, adoption of Dr. Peter Bach’s biologic pricing proposal, to get adalimumab to the payer market. The fact that the proposal that Dr. Bach and his colleagues at Memorial Sloan Kettering laid out received as much attention as it did tells quite a bit about our serious frustration today with access to biosimilar savings.
Of course, very few actions taken by the current Administration have yet to be implemented. These are intended to bolster the biosimilar industry and move from promised to actual savings. However, the signs are telling me that we’re not in an evolutionary phase of biosimilar development–an extinction event may be around the corner.
In May 2016, I interviewed Steven Avey, Vice President, Specialty Pharmacy, MedImpact, for the Center for Biosimilars. That conversation speculated on the potential for biosimilars, having only recently experienced the launch of the first biosimilar in the United States, filgrastim-sndz. At the Academy of Managed Care Pharmacy’s 2019 annual meeting last week, I sat down with Steve once again to gain his perspectives on changes in the biosimilar environment.
Biosimilars Review
& Report: Congratulations on winning the Academy of Managed Care
Pharmacy Foundation’s Steven G. Avey Award! This is sort of a double honor,
first having the award initially named after you, and then many years later,
winning it yourself!
Steve, you’re considered one of the real thought leaders in
managed care pharmacy. What do you consider to be the main challenges facing your
colleagues today?
Steven Avey, PharmD: Thank
you. There are many real challenges today. First of all, we have the potential
for drug rebates to go away. It’s clear that something is going to be done (and
we don’t know what that is), and it could apply not
only to Medicare Part D, but possibly Medicaid and commercial. We will need to
wait and see.
Steven Avey, MS, RPh
Another challenge relates to the Administration’s emphasis
on reducing list prices for drugs. This will not only influence the industry,
but managed care pharmacy as well.
That challenge is part of the ongoing concern about the cost
of specialty medications (and continuing price increases), and the greater call
from payers for a better understanding of the value that they’re getting from
these medications. Are the people who are taking specialty medications actually
getting real benefit?
BR&R: In
addition to payers, employer purchasers and others have been requesting a
better understanding of the value of specialty medications. This has been
sought for 10 years or more. Are we any closer today in getting a grip on this?
Avey: I think we
are. Many PBMs are getting more involved in data management regarding these
medications. The better we get at analyzing the medical and pharmacy data
together, the closer we will get to understanding the value of these specialty
medications.
To give you an example, a PBM today is basically reviewed
and assessed on what its financial picture looks like—are you able to bend that
specialty cost trend? But if you don’t know what these specialty agents are really
doing for the patient population, how can you tell if covering them is the
right thing to do? In order for us to know that, we have to evaluate the
medical and pharmacy data together and focus on the total cost of care of that
individual member. Over time, you can say that our costs are either going down
or not. Then, we can ask the question, am I using the right agent or should we
be using those very expensive drugs for these patients?
Given the lack of the medical and pharmacy data, we just
don’t know. That’s one of my greatest frustrations.
BR&R: Let’s
switch to biosimilars. Do you believe that if the rebate safe harbor is removed
for Medicare, payers will also stop seeking them?
Avey: Yes. It
will definitely trickle into the commercial side. I can see a day in the not
too distant future where we don’t rely at all on rebates. It will be a new
world focused almost solely on list price reductions.
BR&R: Will
that give biosimilar manufacturers an edge?
Avey: It will be
a boon for biosimilar makers! When the rebate goes away, then all that remains
is the list price. That will be a huge advantage for biosimilars.
BR&R: Well,
if I’m a reference biologic maker, whose R&D costs were paid off a decade
ago and whose profit margin is extremely high, I can still lower my WAC price
considerably to compete with the biosimilars, right?
Avey: They can,
but they will have to compete with three or even five biosimilars who do not
have to spend millions of dollars on advertising or promotions like the
innovators do to keep their brand’s exposure and visibility high. The innovator
drug maker will do everything possible to avoid losing that high market share.
Now, I haven’t seen much of this in print, but payers are
angry—they’re angry at these 10% to 20% increases in costs each year from the
innovator drug manufacturers. As a payer, if a biosimilar is available, why would
I want to support that innovator maker, who has
dramatically raised costs for the last 10 years? That gives biosimilar
manufacturers the advantage: “Hey, I’m the new guy helping you to reduce costs.
How about supporting me instead?” I think many payers will act on this message.
BR&R: In our
conversation in April 2016, that was the gist of what you said.
Avey: And I
haven’t changed my mind.
BR&R: I
asked, how soon are you going to drop the AbbVie contracts (when there was some
expectation that biosimilars would be available before 2020), and you said, “As
soon as humanly possible.” And you weren’t the only one who said this.
Avey: Absolutely.
And now the timeline has been extended to 2023. This just made us all the more
angry, because this is because AbbVie filed 100 patents on Humira®,
which overwhelmed what the BPCIA was intended to address. The result is that AbbVie
is going to make $16 billion a year (and more each year) for 4 more years
before we’ll be able to see some competition for their market.
BR&R:
Genentech (Roche) is coming out with subcutaneous forms of Herceptin®
and Avastin®. Will these introductions change the way you position the
biosimilars for these two cancer agents, when they are finally launched?
Avey: We’ve dealt
with this 15 years: It’s really no different than what we’ve seen occur with conventional
agents. Consider a sustained-release form of a brand that is approved around the
time the generic for the immediate-acting formulary is launched. You look at
the new product and ask, what does that premium in pricing buy us? Is it a
site-of-care advantage? Maybe, but does it really offset the cost of using that
more expensive agent? We generally decide to cover the lower-priced (albeit it
not as convenient) dosage form. With biologics, the cost differential between
the new agent and the biosimilar is very large, and there is very little
advantage for the new subcutaneous formulation.
BR&R: We are
seeing something similar playing out right now with pegfilgrastim. Most of the
market has moved to the use of Amgen’s on-body injector OnPro®, and
the biosimilars are being launched using prefilled syringes. To the extent that
payers are interested in eroding OnPro’s marketshare, assuming the price
difference is substantial, OnPro does represent a bit more patient convenience.
Some payers may be thinking this way. To the extent that this will happen may
predict some similar effect for the trastuzumab and bevacizumab markets.
Avey: You have to
remember that payers are receiving a lot of criticism that we’re not doing a
good job of supporting the biosimilars. Quite frankly, the biosimilar drugs
that have been approved up until now are really covered under the medical
benefit. We have a little trickle that can be covered under the pharmacy
benefit. Payers have only so much bandwidth. They know that under present
conditions, a new biosimilar has to build market share from scratch. Some have
said, “You know, it’s not worth the effort. We have other fish to fry. We’re
not going to get too excited yet about these products.”
We have an HMO client that did an amazing job moving market share
away from Neupogen® to Granix®. But they own their
prescribers and they can easily analyze the combined medical-pharmacy spend.
They saw a dramatic lowering of expenditures.
BR&R: Are you
expecting biosimilar products for trastuzumab and bevacizumab to be managed
under pharmacy?
Avey: We see
those drugs under the pharmacy benefit now. Remember that those drugs have a
greater utilization than the other biosimilars that have been launched to date.
I do think that they will attract a lot of attention. And if the rebates do go
away, that takes the market share question right off the table. The biosimilars
will do quite well.
BR&R: The
four-letter suffixes: The FDA recently came out with an updated guidance,
saying that the agency will no longer consider adding four-letter suffixes to
previously approved reference agents. However, they will continue to add
suffixes to newly approved biosimilars and interchangeable agents.
Avey: Everybody
is trying to figure out what’s next here. When we look at biosimilars’
pharmacokinetic information, one biosimilar is going to be somewhat different
than another. I don’t think it will be an insurmountable problem, but just a
headache. We’ll just have to be more in synch with our specialty pharmacies to
ensure that they stock and dispense this one biosimilar with this one
four-letter code.
BRE&R: Have
we made any progress from an educational standpoint here? Do providers and
patients still think that a product with a four-letter code is not comparable
to the originator brand? What is the level of discomfort today?
Avey: I’ve
watched this carefully over the last year. I don’t think there will be huge
angst from the payer. The prescribers and to some
degree the patients that will need more educating to make them feel more
comfortable. We will need better educational materials and communications for
them.
The situation is really no different than when we started instituting
the generic substitution laws. We heard a lot of claims that docs will never
prescribe generics, patients will never take them. We had to do a lot of
educating to alleviate their fears, and to help prescribers understand that
these drugs work like the brands work. At the end of the day, I don’t think
that this will be a long-term challenge.
Only Boehringer Ingelheim remains as a biosimilar maker who
has an approved version of adalimumab but who has not signed on with AbbVie.
United Food and Commercial Workers Local 1500 has filed the suit with the other
manufacturers and AbbVie, claiming that by their actions, they are trying to “divide
the market for adalimumab between Europe and the United States,” according to
the Center for Biosimilars report.
This is an interesting question. The individual motivations of the first companies to come to agreement with AbbVie (Amgen, then Samsung Bioepis) included an end to interminable patent legislation in the US. They wanted the ability to immediately plan launches in Europe (starting in October 2018). The motivations of most other subsequent signees almost certainly was to not forfeit marketshare in Europe, which was needed to help sustain biosimilar development efforts for the US market. In fact, many of these prospective US manufacturers already had received approval in the EU.
AbbVie’s principal patents on Humira® expired in Europe in October 2018. The last of the principal patents are supposed to expire around 2023 in the US anyway. Was it necessary to arrange serial US launches as demonstrated in this link? Would patent litigation have continued well past the supposed patent expiration date? Knowing AbbVie, this is likely. Their several patents involving adalimumab use to treat individual diseases would provide AbbVie a basis for forging ahead with lawsuits that would have gained them additional billions of dollars in sales while the suits meandered toward conclusion.
Does this mean that access to Humira is accelerated through the signing of the royalty agreements, rather than delayed through acts of collusion? That is difficult to say. Although should the lone holdout—Boehringer Ingelheim—decide that it makes business sense to launch at risk, it could topple the carefully orchestrated structure of the agreements. Amgen believes that it will launch the first adalimumab biosimilar, and experience a few months of exclusivity in the US. At that point, Amgen (and every subsequent adalimumab biosimilar maker) would have to decide whether (1) to do the same or risk losing its advantage, (2) start working towards marketing plan B, or (3) cede the initial marketshare and its billions in revenue and wait it out. If Boehringer obtains its sought after interchangeability designation, that may well speed up the process.
Personally, I find it hard to believe that these individual
acts represent premeditated collusion; although the resulting lack of access to
the many biosimilar versions may look to others as an orchestrated maneuver.
In the absence of really big biosimilar stories with far-reaching implications, let’s start with some interesting bits on biosimilars to begin this week.
First, insulin maker Eli Lilly asked the Food and Drug
Administration a very interesting question, in comments
on the agency’s guidelines on transitional drugs. Lilly requested clarification
of the rules under which it might introduce an authorized brand of insulin
(that is, a lower-priced version of an existing insulin brand). The insulins
are one group of medicines that is scheduled to transition to regulation under
the Public Health Services Act in 2020, and thus be subject to formal biosimilar
competition.
Second, Boehringer Ingelheim, which received FDA approval to market its adalimumab biosimilar Cyltezo® in August 2017, received a positive ruling in its patent litigation case with AbbVie. A federal court judge ruled that AbbVie, which makes the originator product Humira® must turn over all papers related to the Humira patents. This may actually move the court case out of the discovery phase, according to Fierce Healthcare, and potentially closer to an actual, early biosimilar launch. Third, Health Canada has decided not to add a four-character suffix onto the names of its biosimilars and biologics. Instead, it will rely on its specific drug identification number as well as the nonproprietary names to identify medications being taken. This of course, contrasts with the FDA’s practice. The FDA is the only major advanced regulatory system that requires the use of a suffix to distinguish biosimilars and their reference products. And it is not used by providers.
Since the October expiration of Abbvie’s EU patent, the potential Humira savings seem to be truly mind-blowing. After implementing its contracts for adalimumab, the UK National Health Service (NHS) should save about three quarters of the $514 million (£400 million) it spends each year on this product alone.
In a fixed-budgeted system like that in the UK, the real implications of these savings become clear. According to the NHS, this additional $385 million (£300 million) will enable it to pay for 11,700 community care nurses or 19,800 treatments in patients with breast cancer.
And to earn these Humira savings, the NHS does not exclude using the originator product Humira. It has signed contracts (with large price cuts) with Abbvie, as well as with biosimilar manufacturers Amgen, Biogen, Mylan and its partner Fujifilm Kyowa Kirin, and Sandoz.
Could the US see such savings on adalimumab in 5 years? Although the competition may be fierce when the brand loses patent protection in 2023, Abbvie has created a stepped-launch scenario with its licensing agreements. Rather than a jailbreak of competition, as we are seeing in the EU with patent expiration there in October 2018, the timing of the licensing agreements may limit the drop in per-unit price, at least for the first year or so.
After that time, payers will be able to choose from all biosimilar adalimumab manufacturers, which should then drive pricing down (or rebates up) considerably, resulting in long-sought lower net costs. However, this will happen only after years of price increases by Abbvie. Abbvie has not claimed, while it is drastically slashing its price in the EU, that it will be losing money. In part, that is because its US revenues on Humira will continue to be at over $10 billion a year. Furthermore, its revenues largely reflect pure profit on the manufacturing of the product today, as its research and development costs were covered 15 years ago and ongoing marketing costs are a tiny fraction of this figure.
Despite repeated protestations in the US that healthcare resources are not unlimited, our system is not based on a fixed budget. It is not disingenuous to consider savings in the terms posed by NHS. Defining the large savings in terms of other useful expenditures give people a concrete idea of how the money can be better used. The need for savings on drug expenditures is acute in this nation, and biosimilars will eventually lead the way.
Just a few short weeks ago, Abbvie announced that it intended to rely on discounts as deep as 80% in parts of the EU to retain Humira® marketshare. One bellweather EU member country has signaled that it is signing tenders with other biosimilar adalimumab manufacturers.
The Center for Biosimilars reported an Email exchange with the Danish national tendering authority Amgros, which manages the country’s bidding system. Amgros confirmed that Abbvie did not provide the best bid for two tenders for adalimumab (covering January to March 2019 and covering April to December 2019). Five companies (including Abbvie) competed for the national tenders. Although Abbvie did not rank best for pricing, agreements were signed with all five companies.
According to the report, a spokesperson for Amgro said, “In both tenders for adalimumab 40 mg, we have entered into agreements with 5 companies—the agreements are ranked according to price. In both tenders, we have signed an agreement with Abbvie for Humira—but Humira does not have the lowest price (ie, is not the winner with the highest ranking).”
The importance of this action may extend beyond Denmark, as several European countries utilize others’ pricing decisions as a benchmark for their own. For example, the price for adalimumab in Bulgaria by policy cannot exceed that in 17 other EU countries.
Humira savings, the NHS does not exclude using the originator product Humira. It has signed contracts (with large price cuts) with Abbvie, as well as with biosimilar manufacturers Amgen, Biogen, Mylan and its partner Fujifilm Kyowa Kirin, and Sandoz.
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