If you’re one of the millions of Americans taking the prescription medication Humira, get ready to add the word biosimilars to your conversations with your doctor.
Starting July 1, alternatives to the world’s top-selling drug are expected to flood the market, some at dramatically lower prices.
Mark Cuban’s Cost Plus Drugs, the company the Dallas billionaire is backing to disrupt the pharmaceutical industry, will start selling Humira alternative Yusimry at $569 for a 40-milligram dose (typically taken every two weeks). Humira can cost more than $3,600 a dose.
Drugmaker AbbVie’s patent on the high-cost drug that racked up $21 billion in sales last year expired at the beginning of this year, setting the stage for others to rush in with similarly formulated medications. One biosimilar is already available and at least seven others are preparing to launch.
Here’s what that means to patients, their insurers and employers, and AbbVie competitors who want a piece of the now-broken monopoly.
How did Humira gain its monopoly?
Humira is in a class of drugs called biologics. It treats chronic inflammatory conditions like rheumatoid arthritis and Crohn’s disease, but other biologics treat a range of severe and chronic conditions like cancer and diabetes.
Unlike most drugs that are chemically synthesized, biologics are manufactured within living cells. These drugs cannot be formulated into identical generics. Instead, competing manufacturers produce highly similar drugs, called biosimilars.
Branded biologics like Humira typically enjoy long periods of market exclusivity in part because of their complex manufacturing process. Humira’s monopoly lasted 20 years and yielded AbbVie $200 billion in revenue.
While its immense profitability is partly because it treats more than 10 different chronic diseases — by blocking a protein that causes inflammation throughout the body — it can also be linked to the drug’s continuously increasing prices.
AbbVie’s precursor, Abbott Laboratories, launched Humira in 2003 at $522 per two-week 40-milligram syringe. Within 10 years, that price jumped to $1,024 per syringe, according to a House oversight committee drug pricing investigation.
When AbbVie spun off from Abbott Laboratories in 2013, it raised Humira’s price 14 more times by 2021. List prices for Humira can exceed $80,000 per patient annually.
AbbVie also extended its exclusivity by years by filing over 250 different patents on Humira, according to the House committee report.
Biosimilars competing against Humira face challenges such as maneuvering through the patents to more patient-oriented problems if they are to take away market share.
The patient perspective
Unlike generics, pharmacists cannot easily switch patients between Humira and a more affordable biosimilar. A doctor has to write a new prescription.
“With biosimilars, because they are a more complex product …, there isn’t that ease of interchangeability,” said Hanna Fish, strategic communications director at the National Community Pharmacists Association. “While the drugs are similar and should act very much the same way, the way that they’re manufactured and then able to be metabolized by the body, it’s not so simple as a one-for-one switch.”
One Humira alternative coming in July, Cyltezo, is approved as interchangeable, and others may follow.
Any patient on Humira can talk with their doctor about switching to a biosimilar, but Fish said those with established treatment plans might be hesitant to change. Fish said biosimilars might be more attractive for patients just starting out on the drug.
Congress created a Food and Drug Administration approval pathway for biosimilars in part to help make expensive biologic medications more affordable, FDA spokesperson James McKinney said. But the complexities of health and pharmaceutical benefits might make lowering prices a bigger challenge than simply introducing lower-cost options.
Most people can’t afford Humira out of pocket at over $80,000 a year, and even the biggest price cuts from biosimilars are unlikely to make the drug accessible to most uninsured patients.
Those with health care coverage do not have much choice over which drugs they get under their plans. Pharmacy benefit managers negotiate with prescription drug programs and payers to decide which drugs will be covered by insurance. Some of the large PBMs — OptumRx and CVS Caremark — already offer the existing biosimilar Amjevita and have indicated they will add others.
Where Mark Cuban’s disruptor comes in
Cuban’s Cost Plus Drugs launched in 2022 as a direct challenge to unaffordable drugs and complex pricing strategies in the pharmaceutical industry. By negotiating directly with drug makers and insurance companies, instead of working through PBMs, Cost Plus Drugs offers medications at significant discounts. It will do the same with Humira.
Partnering with Coherus Biosciences, Cost Plus Drugs will offer Humira alternative Yusimry at its manufacturing cost plus 15%, totaling about $569 before shipping and dispensing fees. While the uninsured may still struggle to pay that price, Cost Plus Drugs co-founder and CEO Alex Oshmyansky said the biosimilar’s pricing will help alleviate strain.
“So let’s say you have a $5,000 deductible for your insurance benefits,” Oshmyansky said. “The list price of Humira is in the $6,000 range for a month’s supply. At the beginning of the year, you’ll be asked to pay $5,000. A lot of people don’t have (that) just lying around. Hopefully, those patients who are unable to afford that kind of deductible will benefit significantly from having a lower payment option available.”
Yusimry’s lower price also will be attractive to employers, Oshmyansky said. Employers typically cover more than two-thirds of the cost of their workers’ health insurance.
“We’ve had an enormous amount of interest from the employer community,” he said. “Because at the end of the day, who’s paying for most of the medications? It’s employers. We should be able to save employers and payers more broadly substantial amounts of money going through our channels, as opposed to conventional ones.”
For employers and employees on conventional health plans, maneuvering around PBMs to access a low-cost option might be tricky, and large firms with employees spread around the world might not opt to complicate their coverage.
Small to mid-sized employers could benefit from an option like Yusimry, said Marianne Fazen, executive director of the DFW Business Group on Health, a coalition of about 55 mid-sized to large North Texas firms, including Southwest Airlines, American Airlines and Texas Instruments.
“Cities would. Municipalities would,” Fazen said. “They are very interested in trying new things like Mark Cuban’s because they have about 3,000 to 6,000 employees. All of their employees are right here in this marketplace.”
What can employers do?
Health insurance is a costly expense for employers. The Kaiser Family Foundation estimated that the average annual premium for single coverage was almost $8,000 a person in 2022 and over $22,000 for families.
“The area that’s getting more costly is from the pharmaceutical side because so many of the conditions people are suffering with get taken care of through pharmaceuticals, through some kind of drug,” Fazen said.
Specialty drugs like biologics constitute a large portion of employer expenses. While less than 2% of patients use biologics, they account for up to 40% of all drug spending, according to an FDA report.
In October, the DFW Business Group on Health held a workshop on biosimilars for employers. Fazen said learning about biosimilars was eye-opening for them.
“Most of our employers — we did a survey — did not know or didn’t know very much about biosimilars,” Fazen said. “No wonder they’re slow to take place in the general health care treatment arena. Guess who wins in that one? The pharmacy companies that make the branded biologic drugs.”
Companies also might not offer biosimilars because they rely on PBMs to inform them of their options, and companies’ own employee benefits managers don’t always receive information about lower-cost alternatives.
“Most benefits managers have very little knowledge about the different drugs on a formulary and treatments for high-cost claims,” Fazen said.
Despite these challenges, employers, particularly large employers with self-funded health plans, have significant power over what drugs are covered by their health plans. They can negotiate for lower-cost biosimilars.
“That would force the market to lower their prices of biosimilars because … the employers for thousands and thousands of employees that may need it for cancer or rheumatoid arthritis or whatever their condition is have said we prefer to have the biosimilar,” Fazen said. “Well, all of a sudden, biosimilars will become more popular and the price will get even lower. It’s just that the insurers and PBMs tend to prefer the more expensive medicines over the lower cost alternatives.”
One goal of DFW Business Group on Health is to help company benefit managers understand the safety, effectiveness and savings offered by biosimilars.
“They can see about a 50% drop in their total pharmaceutical spend by putting biosimilars” in their health insurance plans, Fazen said.
Despite challenges, lower prices are expected … eventually
Until there is real-world data, it isn’t known if biosimilars will drive down Humira’s cost. In a Facebook post, the Rheumatoid Arthritis Foundation suggested patients have measured optimism.
“While there is a lot of excitement around them, the cost-saving effects likely won’t be dramatic at first,” the post said. “We should also be exploring other cost-saving strategies on the pharmacy side of the benefit that can implement a greater effect more quickly.”
At whatever pace, patients and employers are likely to benefit from increased treatment options.
“I think any time you can add competition to the marketplace it’s ultimately beneficial to patients,” Fish said, adding that biosimilars will expand access.
Fazen agreed.
“The pipeline of biosimilars is absolutely full, there’s a bunch coming on, the FDA is busy approving them and this is all really good for people who need those drugs for their high-cost conditions,” she said.
