In one of the biggest biopharma stories of 2023, a cavalcade of immunology biosimilars is lined up to compete against Humira, one of the highest grossing drugs of all time. Healthcare stakeholders have cheered the news, hoping it will drive cost savings across the healthcare system while expanding patients’ physical and financial access to advanced therapies.
So, will this coming wave deliver these patient benefits by making it easier for patients to get on—and stay on—the best therapy for them? Unfortunately, we believe the answer will be “No.” We see two primary barriers:
Barrier 1: Access dynamics. Access dynamics for biosimilars, which resemble branded drugs rather than generics, will motivate payers, providers and pharmacy benefit managers (PBMs) to prioritize higher-cost drugs. At least in the short run, there will be little incentive for them to pass on savings to patients and forego earnings from rebates paid by biologic manufacturers.
Barrier 2: Cost-based treatment sequencing. Clinical development in immunology has only recently pivoted toward generating evidence that meets a high bar through head-to-head trials, well-defined patient subpopulations and more. This mentality drives payers to enforce widespread cost-based treatment sequencing for drugs developed by immunology biopharma, which means many patients suffering from autoimmune disorders will be forced to cycle through additional suboptimal treatments before getting to a therapy that’s right for them.
Humira became the world’s top-selling drug by receiving favorable formulary placement through aggressive rebating, continual introduction of new patented features to its formulation and delivery mechanism, and relentless expansion into new indications.
Humira also owes its strong position to its patient-friendly programs, including ones for affordability support through co-pay programs, access support, onboarding assistance and adherence management. Additionally, after its launch AbbVie added a citrate-free formulation to reduce injection site reactions, a lower-gauge needle to make self-administration easier and a high-concentration formula that now accounts for 85% of its volume—all patient-focused features that have driven physician and patient trust and loyalty.
In January, Amgen launched its Humira biosimilar, Amjevita, in a low-concentration formula. Its high-concentration version will launch in the second half of the year and compete against 10 additional biosimilars hoping to take share from Humira.
While the previous wave of U.S. biosimilars offered broad benefits to oncology patients, the present foray by Amjevita and others into immunology is likely to follow a different trajectory, driven by two key differences between immunology and oncology biosimilars:
- Oncology hasn’t seen a Humira-like rebate wall, making it easier for both branded and biosimilar competitors to gain market share.
- Oncology biosimilars are predominantly Part-B focused, with buy-and-bill and average-sales-price (ASP) dynamics creating limited opportunity for high-list-price increases that support high-rebate formulary dynamics. Immunology biosimilars, on the other hand, are predominantly pharmacy-benefit-driven, encouraging rebating dynamics that keep savings out of the hands of patients.
Amgen has announced a solid package of drug features, patient services, and access and affordability programs for Amjevita. But will they be enough to convince physicians and patients to prefer it over the incumbent? Time will tell, but here’s a rundown of Amjevita’s nonclinical features and our analysis of how likely they are to drive physician and patient preference:
- Formulation of choice. By the end of the year, Amjevita will offer similar dose and formulation choices, putting it on par with Humira.
- Creative pricing. Much has been made of Amgen’s innovative pricing strategy, which will make Amjevita available at both a 5% and 55% discount off Humira’s list price. In theory, this strategy should drive expanded access by simultaneously exciting stakeholders that prefer a high list price (and commensurately high rebates) and those that prefer to drive lower overall cost of care through discounted or lower list prices.
- Interchangeability. Amjevita is seeking interchangeability status for its high-concentration version, meaning pharmacists in certain states could swap out the reference drug for its biosimilar equivalent. However, we don’t see interchangeability status as the most important driver for payers.
- Formulary position. The top three PBMs are responsible for 80% of Humira’s sales volume, and they’ve all placed Amjevita on the same tier as Humira. This is a push.
- Patient support programs. Amjevita is offering nurse partner support, at-home injection demonstration kits and a $0 copay (compared to Humira’s $5). However, Humira offers a range of benefits its competitors don’t, including insurance support, digital adherence support and mental health counseling.
Before a single patient uses a therapy in the U.S., a group of healthcare stakeholders make a series of complex decisions that affect how easily the patient can get on, and stay on, their drug of choice. How each responds to these murky financial incentives will ultimately determine if patients receive the hoped-for benefits of biosimilars. We aren’t optimistic.
To understand why, here’s a look at how every healthcare stakeholder is likely to respond to Amjevita’s introduction—and what it’s likely to mean for patients downstream.
Pharmacy benefit managers. Generic medications are chemically identical to their reference drugs, leading stakeholders, including PBMs, to negotiate their list prices and formulary placement based only on cost. Since biosimilar negotiation dynamics resemble those for branded drugs, PBMs negotiate discounts on behalf of insurers and take their cut in the form of rebates off the list price. AbbVie paid PBMs more than $5 billion in rebates for Humira in 2021, leaving benefit managers with a lot to lose by prioritizing a lower-cost biosimilar.
The upshot: The vast majority of patients will have no reason to switch to Amjevita due to the high list price and rebate dynamic.
Payers. With so many biosimilars entering the market, insurance companies will welcome the upward rebating pressure driven by competition and the corresponding market growth for advanced therapies that may follow. Unfortunately, payers’ incentives operate like those for PBMs outlined above. Furthermore, as manufacturer contracts with payers and PBMs evolve over time, changes to formulary placement for Humira, Amjevita and other biosimilars may force medication switching for nonmedical reasons.
The upshot: Some patients will face treatment gaps and inferior outcomes due to nonmedical switching caused by coverage and reimbursement changes.
Provider networks. The financial incentives governing large, centralized provider networks, such as hospitals and health systems, also encourage a high list price and high rebate at launch because it improves their overall profitability. When biosimilars launch with a lower price, it limits their ability to compete in the market. The Inflation Reduction Act’s introduction of a temporary increase in Medicare Part B payments from ASP+6% to ASP+8% of the branded product price will benefit some, but not all, Part B-focused immunology biosimilars.
The upshot: Provider formulary dynamics reward high-cost therapies that may not always favor patients getting access to the right drug at the right price.
Physicians. Autoimmune patients’ responses to therapy can vary widely due to disease heterogeneity, with optimal response rates for the most common drug classes falling between 30% and 70%. This variability means some patients cycle through multiple medications before finding the one that delivers the right outcomes. Current treatment guidelines recognize these disease dynamics and give physicians the ability to prescribe the drug class they believe is best for their patient. However, payers are likely to add significant prior authorization burden as they enforce cost-based sequencing. This may mean queuing up several biosimilars of different classes that patients must cycle through before getting to the right drug.
The upshot: It will probably take longer for patients to get on the ideal drug for their disease state.
For patients to benefit from Amjevita and other immunology biosimilars, two things must be true: (1) dynamics governing drug access and pricing make it easier for patients to get on, and stay on, the right advanced therapy, which may or may not be a biosimilar, and (2) patient therapies become more affordable. This will only be true if doctors can prescribe drugs without added prior authorization burden compared with the status quo, if patients’ out-of-pocket expenses are manageable and if formulary dynamics don’t force nonmedical switching from a drug that’s working.
Unfortunately, we don’t see this happening. Here’s why:
Patient access to the right advanced therapy will decline. The past decade in immunology has seen TNF-class drugs being offered to all patients as a first-line advanced therapy, due to favorable payer and provider discounts—even though response rates remain comparatively low across indications this class treats. The ability of patients and their physicians to choose from several second-line options will be limited in the future, thanks to the suddenly crowded line of biosimilars queuing up. We expect a dynamic similar to the one that played out during the genericization of cardiovascular markets after Plavix went off patent, when patient access to innovative advanced therapies was pushed to later lines of therapy.
Patients will miss out on the cost savings biosimilars can drive. A big part of the formula for Humira’s ongoing success has been its patient-focused programs, such as the aforementioned therapy onboarding, medication adherence assistance and, especially, financial assistance programs. While we don’t know precisely which programs biosimilar manufacturers launching in the second half of the year will offer, we do know that—between paying for support programs, offering robust rebates to payers and PBMs and undercutting Humira on price—biosimilar manufacturers will have to make cuts somewhere. Patient support programs might be on the chopping block. Additionally, payers will have minimal incentive to prioritize biosimilars offering better patient support programs, meaning patients may not end up with the biosimilar with the best offering—just the one with the lowest cost.
No silver bullet exists to ensure patients will benefit from biosimilars in general, let alone immunology biosimilars. However, there are steps healthcare stakeholder can take to make it more likely.
Payers and providers can explore outcomes-based contracts that integrate biosimilars along with innovative biologic medicines into the end-to-end care protocol. This would drive lower cost of care compared with the status quo, where the treatment sequence is heavily enforced.
PBMs can help increase patient choice by striking a balance between Humira and its biosimilars in frontline position in the immediate short term.
Regulators can encourage healthy competition by evolving interchangeability guidelines to allow biosimilars to compete with their originators on drug features, patient features and supply chain reliability without being locked out because of dubious financial incentives.
Finally, and most importantly, biopharma must push its clinical program development to bring more robust evidence that clearly identifies the right drug for the right patient, thereby delivering superior value for patients across their care journey.