Humira Biosimilar Gross-to-Net Pricing Bubble Was Preceded by the Same Pricing Bubble Burst for Insulin Just Months Ago

Today's post is not about diabetes per se, although there IS a diabetes connection. But this morning, the big news was that a biosimilar of Abbvie's blockbuster anti-inflammatory biologic Humira will be sold by Mark Cuban Cost Plus Drug Company (see the press release at https://www.globenewswire.com/news-release/2023/06/01/2680351/33333/en/Mark-Cuban-Cost-Plus-Drug-Company-joins-forces-with-Coherus-to-make-YUSIMRY-a-HUMIRA-biosimilar-available-to-patients.html for more) at what amounts to an 85% discount to the innovator drug. Mark Cuban Cost Plus Drug Company announced the Humira biosimilar on social media today. See the Tweet thread below, or by visiting https://twitter.com/costplusdrugs/status/1664269466535092226?s=20.

Learn about our work with @Coherus_Bio: https://t.co/Nc6bmtb7Bb

— Mark Cuban Cost Plus Drug Company (@costplusdrugs) June 1, 2023

While there are seven biosimilars of Humira which have been approved by FDA (see https://www.pharmaceutical-technology.com/features/humira-biosimilars-set-the-stage-for-long-awaited-2023-us-launches/), many were approved but delayed due to patents which were due to expire before the biosimilars could come to market, hence so far, none of the Humira biosimilars which have launched have been particularly aggressive on prices.

Until now!

Abbvie's Humira is currently the best-selling prescription drug in the U.S.. More than 300,000 patients in the U.S. take Humira each year, and it costs the U.S. healthcare system a stunning $90,000 per patient each year according to some estimates. AbbVie generated $21.2 billion in Humira revenue in 2022 alone. Now, a Redwood City, California company known as Coherus BioSciences Inc. plans to sell an interchangeable biosimilar of Humira at a price of about $13,000 per patient each year, which amounts to an 85% discount. Mark Cuban Cost Plus Drug Company will sell the biosimilar for $569.27 for a two-dose carton. The company aims for prescription drug price transparency and marks every drug it sells up by 15% plus a distribution fee. More recently, it has expanded to a network of independent retail pharmacies who accept the Team Cuban Card https://www.teamcubancard.com/ which is currently available as a Beta Test in California, Florida, Indiana, New Jersey, New York, Pennsylvania and Texas, but it began in just four states not long ago and has since expanded. That is also how the company aims to handle biologics which require more careful temperature controls, but it could prove far more disruptive to the PBM dominated prescription drug market than the PBMs realize.

Although the Coherus biosimilar adalimumab product was actually approved by the FDA on December 20, 2021, Coherus agreed by arrangement with AbbVie (the maker of reference adalimumab branded as Humira), that the Coherus biosimilar product would not be launched until July 2023. The Coherus biosimilar is indicated for all eligible conditions of Humira, including plaque psoriasis, psoriatic arthritis, rheumatoid arthritis, juvenile idiopathic arthritis, ankylosing spondylitis, Crohn's disease and ulcerative colitis. But not all biosimilars are approved for every indication as the innovator, Coherus' biosimilar is, and it also has the FDA designation of being interchangeable with Humira. 

Pharmacy Benefit Managers have tried very hard to stop this type of competition (low cash prices) from emerging because the legally-exempted rebate kickbacks generate so much money for them. Really, they are just misappropriating money paid by drug companies intended to be used for patient financial relief, but instead the cash flows to the parent companies of the PBMs, which are big, vertically-integrated commercial healthcare insurance companies (except for CVS Health, which was a slight role-reversal when a PBM acquired insurance company Aetna back in 2018). Some of the companies such as United Healthcare's OptumRx PBM business pass the rebates back to United Healthcare which then uses those dollars given to employer plan sponsors as "premium offsets" so the company can sell even more insurance policies. Cigna's Express Scripts does the same thing. CVS Caremark does the same thing with Aetna, although Aetna is a smaller insurance carrier based on number of covered lives.

Coherus BioSciences Inc. announced that it will launch the cheapest-ever Humira copycat, to be branded as Yusimry in July 2023, with a list price of $995 for two autoinjectors, the company said on June 1, 2023. That's far below the $6,922 AbbVie currently charges for the same supply of its branded drug Humira.

However, the Coherus/Mark Cuban Cost Plus Drug Company Yusimry move could put added pressure on other biosimilar-makers including Amgen which now sells two identical biosimilars to Humira (including a high-price/high-rebate version targeting the commercial payer/PBM market branded as Amjevita, and a second unbranded product sold under the generic drug name adalimumab which is about 55% cheaper than Amjevita. Amgen is a big biosimilars seller, and is trying to play both sides of the market. But it has not been as aggressive as Coherus on prices, but the company could modify its own pricing strategy in response. Ideally, that is what SHOULD happen in a truly competitive market.

The era of easy money on Humira and its copies seems to be ending a bit sooner than the PBM's had anticipated. Consider the more than a decade of financial gamesmanship they played on insulin prices. In 2019, Lilly and Novo Nordisk introduced unbranded versions of several insulin varieties (including Humalog, Novolog and Tresiba). In 2022, Sanofi's Winthrop business unit launched an unbranded version of Lantus as well. But true biosimilars are now on the horizon from Civica/GeneSys Biologics, Sandoz/Gan & Lee, Lannett Company/HEC, and Amphastar/ANP as well as the branded/unbranded versions of glargine from Biocon which also has an aspart biosimilar in developments. Numerically, the most biosimilars will be of Lantus, followed by Novolog, with Humalog expected to have just three. However, in March 2023, there was news that the gross-to-net pricing bubble on insulin prices had finally burst, when all of the three largest insulin manufacturers announced (see Lilly's March 1, 2023 announcement at https://www.prnewswire.com/news-releases/lilly-cuts-insulin-prices-by-70-and-caps-patient-insulin-out-of-pocket-costs-at-35-per-month-301758946.html, Novo Nordisk's March 14, 2023 announcement at https://www.prnewswire.com/news-releases/novo-nordisk-to-lower-us-prices-of-several-pre-filled-insulin-pens-and-vials-up-to-75-for-people-living-with-diabetes-in-january-2024-301771409.html and Sanofi's March 16, 2023 announcement at https://www.globenewswire.com/en/news-release/2023/03/16/2629188/0/en/Press-Release-Sanofi-cuts-U-S-list-price-of-Lantus-its-most-prescribed-insulin-by-78-and-caps-out-of-pocket-Lantus-costs-at-35-for-all-patients-with-commercial-insurance.html) that they were slashing insulin list prices and they would pay for that by ending rebate kickback paid to PBMs to secure formulary placement. 

Recall that this was preceded by the nonprofit drug company Civica, Inc.'s announcement a year earlier (see its announcement at https://www.businesswire.com/news/home/20220303005321/en/Civica-to-Manufacture-and-Distribute-Affordable-Insulin/ for some details, along with a concurrent press release on the Civica biosimilar insulin announcement from JDRF at https://www.prnewswire.com/news-releases/jdrf-announces-support-of-civica-to-manufacture-and-distribute-low-cost-insulin-301495050.html — note that JDRF's version of the press release specified actual maximum out-of-pocket insulin prices, while Civica's press release revealed it would acquire the insulin active pharmaceutical ingredients from Hyderabad, India-based GeneSys Biologics) of its intention to sell biosimilars of the three bestselling insulins at a maximum retail price of no more than $30 a vial or $55 for a box of 5 prefilled insulin pens. Almost exactly one year later, the three major branded insulin sellers (Lilly, Novo Nordisk and Sanofi) each announced they would match Civica's biosimilar prices, and to do so, they would stop paying rebate kickbacks to PBMs for preferred formulary placement. For its part, Civica said its intention all along was to disrupt the artificial inflation in the insulin market, and it was not aiming for market share, but for market impact.

While Humira involves a lot more money in rebate kickbacks than insulin, suddenly, what some refer to as the "gross-to-net" bubble seems to now be deflating on that biologic, too. However, as Pembroke Consulting's Adam J. Fein predicted back in 2021 (see https://www.drugchannels.net/2021/11/why-pbms-and-payers-are-embracing.html), the Semglee story shows just how weird 2023 might become when Humira biosimilars emerge. 

Make no mistake: there is still room to undercut Coherus prices on its Humira biosimilar. Remember: the cost of developing biosimilars is a fraction of what it cost the innovator originally. But the signs do look suddenly more ominous for entities like PBMs which have grown far too accustomed to being able to manipulate drug prices behind-the-scenes for their own financial benefit, often to sell more insurance policies in what the vertically-integrated insurer-PBM business viewed as a "virtuous cycle" for their own bottom lines. There was, of course, nothing virtuous about taking money which was intended for patient price relief and keeping it for themselves. Incidentally, on April 19, 2023, healthcare insurance industry whistle-blower Wendell Potter has observed several times in 2023 already (see https://wendellpotter.substack.com/p/unitedhealth-cvsaetna-cigna-pulled for more) that the biggest commercial health insurance companies now earn more money as drug channel intermediaries than they do on their core insurance business, which incidentally, is incredibly profitable but no longer provides much room for growth.

The PBM industry is now reaping what it has sowed. I only hope it's as painful for PBMs as the marked-up prices were for patients!