Blockbuster Arthritis Drug Humira Faces Competition From First Lower-Price Copycat in U.S.

AbbVie had fought for years to protect Humira and its sales from copycats. Under settlements with the various competitors, AbbVie can’t hold off near-identical rivals any longer. Its aggressive defense should help it hold on to most sales for several months, but Humira’s dominance is expected to start cracking by later this year when other copycats go on sale.

The competition should eventually drive down prices and save health insurers billions of dollars a year, while sending AbbVie searching for new sources of sales, analysts said.

Employers and health plans have been looking forward to the arrival of Humira copycats, known as biosimilars, because AbbVie’s drug usually is among their top three drug costs, according to analysts and consultants. A year’s supply now lists for about $90,000.

Older biosimilars have reduced drug costs of health plans by 20% to 30% a prescription, said Katie Asch, the U.S. pharmacy leader at

Willis Towers Watson

PLC, which advises employers on pharmacy benefits.

Amgen is taking the unusual step of offering its new biosimilar, named Amjevita, at two prices: about $40,500 for a year’s supply, a 55% discount to the list price of Humira, and a version that would list for 5% less at $85,494. The prices are before insurance and other discounts. 

Amjevita is unlikely to cause a major decline in Humira use immediately because AbbVie has said that it has reduced its price in contracts to maintain volume, analysts said.

Also helping AbbVie hold on to sales in the near term, analysts said: Pharmacists won’t be able to dispense the new therapy without seeking a doctor’s permission first.  

“There’s a deepening of adoption of biosimilars for sure, but it hasn’t picked up meaningfully in the U.S.,” said Carter Gould, an analyst at

Barclays

PLC. For Humira copycats, “we’re kind of expecting something that’s going to be more gradual.” 

AbbVie has projected that Humira U.S. sales may drop by roughly 45% during the course of the year. SVB Securities analysts recently raised its forecast for the amount of sales AbbVie could retain, partly because health plans will keep covering the drug.

Humira, which is now cleared to treat rheumatoid arthritis, psoriasis and other autoimmune diseases, first earned approval from the U.S. Food and Drug Administration in 2002.

The drug helped patients overcome a painful, debilitating arthritis, while becoming a sales juggernaut.

It held the title of the top-selling pharmaceutical for years until Covid-19 vaccines took the mantle. In 2021, Humira generated roughly $21 billion in sales worldwide, including $17 billion in the U.S. On Feb. 9, AbbVie is scheduled to report full-year sales for 2022.

The drug accounts for about a third of AbbVie’s sales. 

Humira is known as a biotech drug, or biologic, because it is made from living cells in a process that resembles brewing. For years, biotech drugs, which are largely injected or infused, didn’t face competition even after their patents expired, like pills did with generics. Companies seeking to introduce a rival product would have to test it and get it approved as if it were an entirely new drug.

In the 2010 Affordable Care Act, Congress established a process for rival companies to sell copycats, called biosimilars, based largely on existing knowledge about the safety and effectiveness of the original drug. The originals got 12 years of protection from competition in exchange.

The FDA has approved 40 biosimilars, but their use has been less than expected because drugmakers like AbbVie have taken out additional patents and kept contracts with drug-benefit managers by offering volume-based discounts.  

The main U.S. patent related to Humira expired in 2016, but AbbVie obtained more than 100 additional U.S. patents. AbbVie cited those patents, which the company said extended into the 2020s and 2030s, in litigation seeking to protect Humira from biosimilar competition. Critics say AbbVie abused the U.S. patent system to preserve sales.

The legal strategy prevented the developers of biosimilar versions from launching their products in the U.S., even after the FDA had approved them and while some copycats began selling in Europe in 2018.

Meantime, AbbVie kept raising the price of Humira. A year’s supply of the drug originally was priced at about $13,600.

The FDA approved Amjevita in 2016, but its launch was held up as Amgen and AbbVie were tied up in litigation. The companies resolved their legal dispute in an agreement that paved the way for Tuesday’s Amjevita launch. 

Amgen set two prices for Amjevita because of the complexity of the U.S. drug payment system. Amgen could negotiate larger discounts and rebates off the higher list price, which some drug-benefit managers and pharmacies may prefer to a lower list price, said

Murdo Gordon,

Amgen’s head of global commercial operations. 

Under other settlements, at least eight additional FDA-approved Humira biosimilars are due to launch this year, the most against a biotech drug in the U.S. 

Analysts predict Humira’s dominance will begin eroding later this year and into 2024, after more biosimilars become available and help drive down prices. Humira sales are forecast to drop to about $8.2 billion in 2024, according to analysts surveyed by FactSet.  

Amjevita could generate roughly $1 billion this year in sales given its advantage as the first Humira biosimilar, according to Cowen & Co. 

Drug-benefit managers OptumRx, owned by 

UnitedHealth Group Inc.,

CVS Health Corp.’s

CVS Caremark and

Cigna Corp.’s

Express Scripts have said they would add Humira biosimilars to their coverage plans, called formularies, in addition to continuing to cover Humira. OptumRx and CVS Caremark said they would add Amgen’s drug Feb. 1.

Optum Rx and Express Scripts said they don’t plan to give the biosimilars priority over Humira, while CVS Caremark said it would give preference to Humira.

AbbVie has said that 90% of insured patients will have access to Humira because of its negotiations with drug-benefit managers. 

The company has two multibillion-dollar products, immune drugs Rinvoq and Skyrizi, that together in 2027 should top Humira’s peak sales, Chief Executive

Rick Gonzalez

said at a recent healthcare conference. The company declined to comment further. 

Unlike most of the biosimilars available for other diseases that hospitals and doctors administer, Humira biosimilars will be dispensed at pharmacies, and patients will take their drug at home. 

Rival biosimilars due to roll out beginning in July include therapies from Boehringer Ingelheim,

Organon

& Co. and Samsung Bioepis Co., as well as from

Teva Pharmaceutical Industries Ltd.

and

Alvotech

Holdings SA.

The FDA granted the biosimilar from Boehringer interchangeable status, meaning pharmacists can substitute the copycats for Humira without getting permission from a physician. Teva and Alvotech said they expect the interchangeable designation for their biosimilar. 

The interchangeable designation could prove significant because some doctors are hesitant to switch their patients to biosimilars and reluctant to give a pharmacist permission to substitute a biosimilar. 

“You don’t need the physician to intervene, so it makes it a little bit easier to transition over,” said Terrence Flynn, an analyst at Morgan Stanley.  

The FDA hasn’t designated Amjevita as interchangeable. Mr. Gordon said Amgen has built capabilities to help interested patients switch, though the company expects Amjevita will draw more new patients initially.

Amgen also plans to pursue an interchangeability designation, a spokeswoman said.

Write to Jared S. Hopkins at jared.hopkins@wsj.com

AbbVie had fought for years to protect Humira and its sales from copycats. Under settlements with the various competitors, AbbVie can’t hold off near-identical rivals any longer. Its aggressive defense should help it hold on to most sales for several months, but Humira’s dominance is expected to start cracking by later this year when other copycats go on sale.

The competition should eventually drive down prices and save health insurers billions of dollars a year, while sending AbbVie searching for new sources of sales, analysts said.

Employers and health plans have been looking forward to the arrival of Humira copycats, known as biosimilars, because AbbVie’s drug usually is among their top three drug costs, according to analysts and consultants. A year’s supply now lists for about $90,000.

Older biosimilars have reduced drug costs of health plans by 20% to 30% a prescription, said Katie Asch, the U.S. pharmacy leader at

Willis Towers Watson

PLC, which advises employers on pharmacy benefits.

Amgen is taking the unusual step of offering its new biosimilar, named Amjevita, at two prices: about $40,500 for a year’s supply, a 55% discount to the list price of Humira, and a version that would list for 5% less at $85,494. The prices are before insurance and other discounts. 

Amjevita is unlikely to cause a major decline in Humira use immediately because AbbVie has said that it has reduced its price in contracts to maintain volume, analysts said.

Also helping AbbVie hold on to sales in the near term, analysts said: Pharmacists won’t be able to dispense the new therapy without seeking a doctor’s permission first.  

“There’s a deepening of adoption of biosimilars for sure, but it hasn’t picked up meaningfully in the U.S.,” said Carter Gould, an analyst at

Barclays

PLC. For Humira copycats, “we’re kind of expecting something that’s going to be more gradual.” 

AbbVie has projected that Humira U.S. sales may drop by roughly 45% during the course of the year. SVB Securities analysts recently raised its forecast for the amount of sales AbbVie could retain, partly because health plans will keep covering the drug.

Humira, which is now cleared to treat rheumatoid arthritis, psoriasis and other autoimmune diseases, first earned approval from the U.S. Food and Drug Administration in 2002.

The drug helped patients overcome a painful, debilitating arthritis, while becoming a sales juggernaut.

It held the title of the top-selling pharmaceutical for years until Covid-19 vaccines took the mantle. In 2021, Humira generated roughly $21 billion in sales worldwide, including $17 billion in the U.S. On Feb. 9, AbbVie is scheduled to report full-year sales for 2022.

The drug accounts for about a third of AbbVie’s sales. 

Humira is known as a biotech drug, or biologic, because it is made from living cells in a process that resembles brewing. For years, biotech drugs, which are largely injected or infused, didn’t face competition even after their patents expired, like pills did with generics. Companies seeking to introduce a rival product would have to test it and get it approved as if it were an entirely new drug.

In the 2010 Affordable Care Act, Congress established a process for rival companies to sell copycats, called biosimilars, based largely on existing knowledge about the safety and effectiveness of the original drug. The originals got 12 years of protection from competition in exchange.

The FDA has approved 40 biosimilars, but their use has been less than expected because drugmakers like AbbVie have taken out additional patents and kept contracts with drug-benefit managers by offering volume-based discounts.  

The main U.S. patent related to Humira expired in 2016, but AbbVie obtained more than 100 additional U.S. patents. AbbVie cited those patents, which the company said extended into the 2020s and 2030s, in litigation seeking to protect Humira from biosimilar competition. Critics say AbbVie abused the U.S. patent system to preserve sales.

The legal strategy prevented the developers of biosimilar versions from launching their products in the U.S., even after the FDA had approved them and while some copycats began selling in Europe in 2018.

Meantime, AbbVie kept raising the price of Humira. A year’s supply of the drug originally was priced at about $13,600.

The FDA approved Amjevita in 2016, but its launch was held up as Amgen and AbbVie were tied up in litigation. The companies resolved their legal dispute in an agreement that paved the way for Tuesday’s Amjevita launch. 

Amgen set two prices for Amjevita because of the complexity of the U.S. drug payment system. Amgen could negotiate larger discounts and rebates off the higher list price, which some drug-benefit managers and pharmacies may prefer to a lower list price, said

Murdo Gordon,

Amgen’s head of global commercial operations. 

Under other settlements, at least eight additional FDA-approved Humira biosimilars are due to launch this year, the most against a biotech drug in the U.S. 

Analysts predict Humira’s dominance will begin eroding later this year and into 2024, after more biosimilars become available and help drive down prices. Humira sales are forecast to drop to about $8.2 billion in 2024, according to analysts surveyed by FactSet.  

Amjevita could generate roughly $1 billion this year in sales given its advantage as the first Humira biosimilar, according to Cowen & Co. 

Drug-benefit managers OptumRx, owned by 

UnitedHealth Group Inc.,

CVS Health Corp.’s

CVS Caremark and

Cigna Corp.’s

Express Scripts have said they would add Humira biosimilars to their coverage plans, called formularies, in addition to continuing to cover Humira. OptumRx and CVS Caremark said they would add Amgen’s drug Feb. 1.

Optum Rx and Express Scripts said they don’t plan to give the biosimilars priority over Humira, while CVS Caremark said it would give preference to Humira.

AbbVie has said that 90% of insured patients will have access to Humira because of its negotiations with drug-benefit managers. 

The company has two multibillion-dollar products, immune drugs Rinvoq and Skyrizi, that together in 2027 should top Humira’s peak sales, Chief Executive

Rick Gonzalez

said at a recent healthcare conference. The company declined to comment further. 

Unlike most of the biosimilars available for other diseases that hospitals and doctors administer, Humira biosimilars will be dispensed at pharmacies, and patients will take their drug at home. 

Rival biosimilars due to roll out beginning in July include therapies from Boehringer Ingelheim,

Organon

& Co. and Samsung Bioepis Co., as well as from

Teva Pharmaceutical Industries Ltd.

and

Alvotech

Holdings SA.

The FDA granted the biosimilar from Boehringer interchangeable status, meaning pharmacists can substitute the copycats for Humira without getting permission from a physician. Teva and Alvotech said they expect the interchangeable designation for their biosimilar. 

The interchangeable designation could prove significant because some doctors are hesitant to switch their patients to biosimilars and reluctant to give a pharmacist permission to substitute a biosimilar. 

“You don’t need the physician to intervene, so it makes it a little bit easier to transition over,” said Terrence Flynn, an analyst at Morgan Stanley.  

The FDA hasn’t designated Amjevita as interchangeable. Mr. Gordon said Amgen has built capabilities to help interested patients switch, though the company expects Amjevita will draw more new patients initially.

Amgen also plans to pursue an interchangeability designation, a spokeswoman said.

Write to Jared S. Hopkins at jared.hopkins@wsj.com