Amjevita, First Biosimilar of Humira, Launches With Two-Tiered Pricing Strategy
More than six years after the FDA approved it, the first biosimilar of AbbVie Inc.’s Humira (adalimumab) has finally launched in the U.S. On Jan. 31, Amgen Inc.’s Amjevita (adalimumab-atto) became available at two different wholesale acquisition costs — one 55% below Humira’s WAC and one 5% below it — a strategy that acknowledges the lure of rebates within the U.S. market. It remains to be seen whether additional adalimumab biosimilars launching this year will follow suit or explore a different strategy to differentiate themselves.
Initially approved Sept. 23, 2016, Amjevita was the first of eight Humira biosimilars that the FDA had OK’d as of early February. The tumor necrosis factor (TNF) inhibitor is approved for seven of Humira’s nine indications, including rheumatoid arthritis, plaque psoriasis and Crohn’s disease, although the biosimilar is indicated for ulcerative colitis in adults, while Humira is approved for UC in people at least 5 years old. The two Humira indications not on Amjevita’s label are hidradenitis suppurativa and uveitis.
In Amgen’s webcast to report fourth-quarter and full-year 2022 earnings — which took place the same day as Amjevita’s launch — Murdo Gordon, executive vice president of global commercial operations, declined to answer an analyst’s question about how the dual pricing option will work, noting that the company doesn’t comment on product-specific pricing. However, he said, “With respect to the two-list-price approach that we’ve employed here at this launch, this is really to address the complexity of the U.S. market. Pharmacy benefit managers have a business model that requires that they negotiate rebates with manufacturers, and so they would prefer a high list price and negotiate rebates to net the price down and then pass those rebates through to their upstream employer clients.
“There are other stakeholders and customers in the health care system that prefer a net-price-based model and don’t care about the difference between list and net or gross price and net price,” he continued. “And so for those, we have the lower net price product available.”
Citing GlobalData’s report titled Prescriber Opinions on Biosimilars in Immunology, Vinie Varkey, a managing analyst in immunology at the company, explains that “43% of U.S. physicians stated that they needed to see a 20% to 40% price discount for them to prescribe biosimilars to greater than 50% of their originator-naïve patients. Whilst for treatment-experienced patients, all U.S. respondents stated they needed to see a 40% to 60% price discount for them to prescribe biosimilars to greater than 50% of that patient group,” so Amjevita’s lower price offers a “promising pricing strategy” to these stakeholders. PBMs may differ on their perception, she says, but “nonetheless, the launch of Amjevita positions Amgen as a key player in the U.S. biosimilar space.”
“Amgen said they wanted ‘to provide broad access for patients’ by offering two pricing options to health plans and PBMs,” says Renee Rayburg, R.Ph., vice president of specialty clinical consulting at Pharmaceutical Strategies Group (PSG), an EPIC company. “In addition, they wanted their biosimilar to be available across all three lines of business: commercial, Medicare and Medicaid. Five percent below WAC price is more for plans, as it allows for additional rebates/contracting, which they expect to lower the net cost. The 55% below WAC is more for patients, as it allows lower out-of-pocket costs upfront, which would benefit patients, especially those in a high-deductible or coinsurance plan. This allows savings from biosimilars to directly impact patients.”
Another industry expert put it a different way: “PBMs are already pushing the more expensive, branded option so that scads of rebate dollars can be generated….. many of which may land in the coffers of the PBMs,” wrote Bill Sullivan in a Feb. 2 blog. “What that means to patients (especially those with deductibles and coinsurance) appears to be irrelevant.”
According to Rayburg, “It is expected rebates would only be associated with the 5%-below-WAC pricing, and some are expecting that to lead to the lower net cost. Based on the current list price of Humira, the 55% discount off Humira list price lowers the annual cost per patient by about $45,000 for those taking the standard every-other-week dosing. Rebates would have to exceed that amount per patient to achieve the lower-net-cost product.”
In a Feb. 3 podcast, Evercore ISI analyst Umer Raffat observed different pricing strategies that other biosimilars have taken. “In Remicade, we saw the first to market was at a 15% discount, the second to market took it to a 30% discount, and the third to market took it to a 55% discount off list price. But you know what? You don’t necessarily see that order play out on others. For example, [with] Neulasta, they’re almost all at basically in the mid-30%s in discount, almost all of them, so they’re really just preying on net pricing. Same dynamic on Herceptin biosimilars, a 15% to 20% discount.…I think that the real issue was when Amgen came in at 5% to 55% discount, the question was ‘Wow. Well the next guys are only going to come in [offering] more.’ Well not necessarily.”
”I found it very interesting when Amgen hinted that if you want the lower net price, then you want to go with the 55% discount, which was almost a hint that the 5% discount version is not offering more than a 50% gross to net,” he added. “I thought that was a hint, but who knows?”
“With biosimilars in general, the expectation is they would enter the market at 10% to 30% lower cost than the brand; we have seen some enter at even deeper discounts,” Rayburg tells AIS Health, a division of MMIT. “However, Amjevita has set the bar a little higher for Humira biosimilars entering the market with pricing 55% lower. I expect to compete, others will either have to be competitive in pricing or offer rebates/contracting to allow them to be competitive in pricing along with offering other patient and financial support (i.e., copay assistance) being offered by the competitors, including Humira. With so many Humira biosimilars expected, those that offer the lowest net cost will offer the most savings and have the best chance for formulary coverage.”
During the Amgen webcast, Gordon said that the biosimilar already was “making its way into the channel” and that the company was “receiving inbound interest in Amjevita from payers, prescribers and patients.” With Amjevita, he said, Amgen has “broad access out of the gate on day one launch with the three national pharmacy benefit managers, so broad parity coverage alongside Humira.”
Pricing Strategy Has Been Used Before
Amgen’s pricing strategy mirrors the one used by Viatris Inc. and Biocon Biologics Ltd. when their Semglee (insulin glargine-yfgn) gained interchangeable status on July 28, 2021. (Viatris completed a biosimilars transaction with Biocon on Nov. 29, 2022, by which Viatris provides commercialization for an expected two-year period after which Biocon will take over “commercial, regulatory and other related services.”) The companies launched both an unbranded interchangeable insulin glargine with a WAC 65% less than its reference drug, Sanofi’s Lantus, as well as interchangeable Semglee, with a list price only 5% less than that of Lantus.
PBMs took different formulary stances with the agents. For example, Express Scripts blocked Lantus and the low-list-price, low-rebate interchangeable insulin glargine while placing high-list-price, high-rebate Semglee on its largest commercial formulary. Prime Therapeutics LLC placed both interchangeable biosimilars on its formularies.
At the time, longtime industry expert Adam J. Fein, Ph.D., CEO of Drug Channels Institute, predicted that the Humira biosimilars might launch with a similar strategy. “Until plan sponsors break their addiction to rebates, today’s U.S. drug channel problems will remain,” he asserted.
During a Dec. 16 webinar titled Drug Channels Outlook 2023, Fein revealed that IQVIA data as of October 2022 show that “new prescriptions are almost exclusively Lantus” within Medicare Part D, with that drug garnering more than two-thirds of new Medicaid prescriptions and more than half of commercial ones. Within that latter market, “where rebates are much more important,” almost 30% of the remaining share went to the high-list-price, high-rebate Semglee, not the less expensive authorized biosimilar with less rebates. When combining both established patient prescriptions and new ones, Lantus remains the clear leader in all three markets.
Other Factors Will Come Into Play for Coverage
Certain other factors may help Amjevita gain market share. Amgen is offering a suite of support services for the biosimilar that includes financial assistance and reimbursement support for prescribers and patients. The manufacturer also is no stranger to the inflammatory space: Its TNF inhibitor Enbrel (etanercept) has been the top competitor to Humira for years, and it also has Otezla (apremilast), a phosphodiesterase 4 (PDE4) inhibitor whose indications include psoriatic arthritis and plaque psoriasis. It has 11 biosimilars in global markets or under development, including five FDA-approved products, among them TNF blocker Avsola (infliximab-axxq), which also competes in the inflammatory class.
“They know the [inflammatory] market, how to compete and already have a presence with providers, so that may bode well when it comes to marketing their product, as well as established experience with PBMs and rebating/contracting for existing products,” observes Rayburg of Amgen. “They have biosimilars currently established in the market, so they have established experience which could also prove helpful, including Avsola, a biosimilar for Remicade, which is also in the inflammatory condition space. In addition, they are experienced in providing other patient support services for their products, which also can be helpful.”
However, potentially important distinctions exist among Humira and its biosimilars — at least at this point. In November 2015, AbbVie received FDA approval for a higher concentration, citrate-free Humira — which it didn’t launch until July 2018 — and that formulation now has most of the physician prescribing. “According to our Artemetrx Book of Business, more than 80% of patients currently taking Humira are using the newer formulation, which we expect they have gotten used to, this more comfortable injection experience,” says Rayburg. This formulation requires half the volume of drug injected compared with the original formulation, and it has fewer excipients that often cause discomfort when injected, as well as a thinner needle.
But when manufacturers of potential Humira competitors began developing their biosimilars, they were developing lower concentration versions based on the original formulation. “Defense strategy” against biosimilars was one of the reasons for the gap between approval and launch of the new version, asserted a staff report from the U.S. House of Representatives’ Committee on Oversight and Reform released in May 2021.
During the Amgen webcast, Gordon noted that although Amjevita is a low-concentration formulation, it also is citrate-free, “meaning that the patient experience here is still one where we minimize the injection site pain by having a citrate-free formulation. And patient experience here has been positive in our clinical trials, and we anticipate that not having a high concentration will not be a barrier in the market. These are very low volumes that are injected through an auto-injectable pen. And we’ve seen very, very good reliability of patients being able to administer.”
“Amjevita is citrate-free; however, it is of the low concentration, and not all formulations offer the thinner needle. Thus, it is expected [that] it would not provide the same injection experience for patients,” observes Rayburg. “Will that make a difference? It’s hard to say, but expecting patients to switch to a product that is even slightly different might be challenging for some, even if it is not most, patients. That leads to member disruption, and most payers do not want to create member disruption, so that does factor into the decision for some. For new starts, it would not matter.”
Only one biosimilar so far has FDA approval for a high-concentration version: Samsung Bioepis Co., Ltd. and Organon & Co.’s Hadlima (adalimumab-bwwd), which is cleared to launch on July 1. In addition, only one has interchangeability status: Boehringer Ingelheim Pharmaceuticals, Inc.’s Cyltezo (adalimumab-adbm), a low-concentration formulation that also is cleared to launch July 1. Other biosimilars, however, are undergoing studies for the high-concentration adalimumab and/or interchangeability designation.
In Amgen’s webcast, David Reese, executive vice president of research and development, noted that the data readout for its Amjevita Phase III interchangeability trial, as well as for ABP 654, an investigational biosimilar to Stelara (ustekinumab) from Janssen Biotech, Inc., a Johnson & Johnson company, is expected in the first half of this year.
“Interchangeability can also impact member experience, as any of the biosimilars considered to be interchangeable will not require doctor approval to dispense a biosimilar when the prescription is written for Humira, so makes it easier at the pharmacy for dispensing,” explains Rayburg. She adds that she expects at least one interchangeable biosimilar that is similar to the formulation of Humira used by most patients today will enter the market as soon as July, with more to follow.
While much focus is given to interchangeability status, it may not be quite as important as perceived. In a STAT-sponsored webinar held Oct. 12, Madelaine A. Feldman, M.D., FACR, president of the Coalition of State Rheumatology Organizations, pointed out that formulary status trumps interchangeability. Pharmacists could certainly substitute for a presumably less expensive interchangeable biosimilar, she said, citing Semglee. But if a PBM does not have that drug on its formulary, prescribers “can change it all they want, but the patient’s not going to be able to afford it. So interchangeability — unless all of the biosimilars that are interchangeable are on the formulary — it turns into more of an optics thing, so that if a particular payer puts the biosimilar that’s interchangeable [on its formulary], it certainly looks better. But again, interchangeability doesn’t mean that the patient will automatically have access to it, even if the pharmacist changes it, because unless it’s being paid for, it’s still too expensive for the patient to afford.”
Multiple Competitors Have Different Launch Dates
Adding to the Humira complexity is that the biosimilars will be entering at different times during the year, said Fein during the December webinar. Following the resolution of patent litigation brought by AbbVie, eight biosimilars — four of which have been approved — are cleared for a July 1 launch, one for July 31, one for Sept. 30 and another for Nov. 20.
“You’re going to see some potentially differentiated pricing strategies, either companies launching multiple prices, companies just saying we’re going to go for it and launch on the list price, companies saying we’re going to go for the high list price, and I think that is going to kind of shine a light on some of the warped incentives baked into our channel because…many people will still have in their benefit a coinsurance based on the list price. So some of the savings are not going to go to the patient,” he said.
Another interesting dynamic to watch for is spurred by the fact that “biosimilars have been very good for the wholesalers in the buy-and-bill market” for drugs under the medical benefit, but this is not likely to be the case for pharmacy benefit drugs such as Humira. At least for the first couple of years, payers and PBMs will determine product selection. “So the wholesalers and pharmacies will function kind of in their traditional role as a fulfillment channel for those products. They won’t be able to move share around. Maybe a few years down the road when we get more interchangeables, [and] people are more comfortable with the products, that may change, but in the short term, probably not.”
And the topic of interchangeability, in particular what it means, should be a “big topic” going forward, he asserted. Fein pointed to Europe, “where they’ve had very high biosimilar adoption; there’s no discussion of interchangeability. Biosimilars are biosimilar; there’s not a good biosimilar and a less good biosimilar.” But having two levels of biosimilars in the U.S. “is going to create even more marketplace confusion for patients and physicians. In the buy-and-bill market, after a few years of experience, many clinicians treat the products as if they’re interchangeable. It’s not clear that will happen with just the nature of immunology products, but also because we’re going to have a lot of random conversations, and it’s such a confusing market.”
The FDA, he said, “is going to feel enormous pressure to revisit interchangeability.” He noted that recently, Sen. Mike Lee (R-Utah) unveiled the Biosimilar Red Tape Elimination Act (S.6), which would do away with the FDA requirement for switching studies for biosimilars seeking the interchangeability designation.
“So look for that [scrutiny of interchangeability] to ramp up,” said Fein. “It’s not going to be resolved [in 2023], but this is going to be a big storyline for the future of the biosimilar market.”
For now, Rayburg says she does not expect much of a shift in market share. “With brand Humira remaining covered in a preferred position, there is no incentive for existing patients on Humira to switch to a different product and no incentive for prescribers to switch patients to a biosimilar if both products are covered at parity (same preferred position, same copay, etc.). Typically, increasing the number of products will create competition and drive down price. However, the current strategy of covering all products at parity is not allowing any competition in pricing to play into the scenario.
“Formulary coverage is very important,” she asserts. “The number of competitors typically will drive down the price as they are all competing for coverage, and that is something that most payers are looking forward to, but covering the lowest-net-cost product is the way to achieve optimal savings. Remember, the biosimilars are all competing against each other and against brand Humira, which remains in the mix.
“In addition,” she continues, “there are multiple factors to consider in getting to the lowest net cost: list price, any manufacturer rebates or contract pricing being offered [and] manufacturer copay assistance. All these financial offerings will contribute toward lowering the overall cost of these products and should be considered in making the formulary coverage decisions. Humira is and has been the No. 1 drug by cost for most payers and was highly rebated before the entrance of any biosimilars. In advance of Humira biosimilars entering the market, most PBMs made the decision to continue to cover Humira in the same preferred position as it was before, securing whatever rebates were being offered to do so. Amjevita, as the only biosimilar currently available, was not enough to affect the continued coverage of Humira in a preferred position. Additional competitors, especially those that are most similar to the current Humira formulation that most patients are currently taking, may have more impact.”
Contact Rayburg via Betsy Van Alstyne at Betsy.VanAlstyne@psgconsults.com.
This article was reprinted from AIS Health’s monthly publication RADAR on Specialty Pharmacy.