Turns Out That Biosimilars Do Impact Biologic Drug Costs

Introduction of biosimilars for the rheumatology drug adalimumab, whose original branded version Humira has long been a blockbuster, appears to have led to a dramatic drop in net spending for these products — even though biosimilars barely dented Humira prescription rates.

Analysis of prescriptions and sales figures for 2023 — the first year in which Humira faced biosimilar competition — showed the total number of adalimumab prescriptions remained nearly flat in the year’s fourth quarter (Q4) relative to the same quarter in 2022, but net spending on all adalimumab products fell 45% over this period, according to Benjamin Rome, MD, MPH, of Brigham and Women’s Hospital in Boston, and colleagues.

Net costs per prescription also declined precipitously, by 43%, the group reported in a JAMA Health Forum research letter. But Humira also retained its stranglehold on the market for adalimumab: biosimilar prescriptions in Q4 2023 were just 1.35% of the total.

The researchers pulled prescription data from the IQVIA National Prescription Audit, and sales figures from manufacturers’ published financial reports. (Because some biosimilar makers aren’t public companies, not all were included in the analysis; also, patients’ out-of-pocket costs were not available.)

While the net spending drop is clearly a good thing, Rome and colleagues warned that it may not be sustainable if biosimilar manufacturers can’t do better at selling their products.

“Lower health care spending is a goal of biosimilar introduction, but low uptake raises concerns that manufacturers may withdraw from the market or avoid developing future biosimilars,” they explained. “Compared with biosimilars, uptake of new generic drugs is often rapid, averaging 66% of the market share during the first year after brand-name market exclusivity ends.”

Adalimumab ought to be the most lucrative market there is for biosimilars: as Rome and colleagues noted, it’s “the best-selling drug in history, with more than $200 billion in global sales since its 2002 approval.” It now boasts approvals for nine indications including rheumatoid arthritis and related conditions, both major forms of inflammatory bowel disease, and plaque psoriasis. Biosimilars began to win FDA approval in 2016; but thanks to the patent thicket AbbVie had erected around adalimumab, actual biosimilar sales in the U.S. didn’t begin until 2023.

Prospects for cost savings didn’t look great initially: AbbVie started 2023 by actually raising Humira’s list price by 8%, Rome and colleagues indicated. The onset of biosimilar competition, however, apparently prompted the company also to hike its discounts and rebates paid to insurers and pharmacy benefit managers. That is how AbbVie was able to keep selling Humira at nearly the same rate as before, and also how its net sales plummeted despite the increased list price.

Thus, it turns out that both sides in an earlier debate about biosimilars’ impact on the biologic drug market were correct.

In 2017, at the American College of Rheumatology’s annual meeting, Roy Fleischmann, MD, of the University of Texas Southwestern Medical Center in Dallas, squared off against Jonathan Kay, MD, of the University of Massachusetts Medical School in Worcester, on the question of whether rheumatologists should switch their patients from original branded products to biosimilar equivalents. Kay took the “yes” position, arguing that prices would surely come down once competition began.

Fleischmann countered that costs hadn’t budged and probably wouldn’t, because of the many tricks that branded-drug makers have up their sleeves. “For my patients in the United States, there are no savings from biosimilars,” he said. (At the time, a biosimilar for infliximab had been on the market for a year.) “The savings, if there are any, go exclusively to pharmacy benefit managers and vertically integrated healthcare systems. There is no benefit in cost to patients and no improvement in access to biologic therapy to patients.” The latter, he added, was the key factor — if patients’ costs aren’t any lower, then there is no reason to move them from a branded biologic to a biosimilar.

So Kay seems to have been correct that biosimilars would bring total costs down, even as Fleischmann rightly predicted that branded manufacturers could dissuade most prescribers from switching.

Another example (and perhaps driver) of that latter success came in June, with a report showing that only about half of Medicare Part D plans pay for adalimumab biosimilars, whereas nearly all cover Humira.

On the other hand, hints are emerging that biosimilars could chip away at the Humira monolith. Rome and colleagues observed that the lone adalimumab biosimilar with “interchangeability” designation — meaning the FDA has approved back-and-forth switching with the originator product — had begun winning prescriptions.

Perhaps more important was a move earlier this year by one of the nation’s biggest insurers, CVS Health. In January, it said it would replace Humira with biosimilars as the preferred adalimumab versions in its commercial formularies.