Prateek Yadav co-wrote this blog post with Christina Corridon, Tucker Herbert, Didier Chicheportiche and Gustavo Poblete.
The biosimilars market in Europe continues to generate buzz as it captures considerable market share from major blockbuster-branded biologics. Most recently, Celltrion's Truxima, a biosimilar of Roche's MabThera (rituximab), captured 32% market share in 18 European countries. Regulatory agencies have also welcomed biosimilars for the promise of the potential cost savings that they bring. Earlier, the U.K.’s National Health Service reported that switching patients from branded drugs to biosimilars and generics led to a savings of £324 million last year.
As this decade’s highest-grossing drug, there has been much anticipation for biosimilars of Humira (adalimumab). In October 2018, four companies—Amgen, Sandoz, Samsung Bioepis, and Mylan—launched their adalimumab biosimilars in the EU after settling patent disputes with AbbVie in out-of-court settlements.
The launch of adalimumab biosimilars could be an inflection point for the biosimilars market considering the potential revenue at stake. This event will likely establish a competitive environment that could identify the manufacturers who will succeed or exit the biosimilars field if they are not able to make a profit. The performance of these biosimilars could determine whether the market becomes “bio-generic” or “bio-branded.”
Let’s examine the expectations of physicians, payers, biosimilar developers and the originator:
1. Physicians: Physicians rely on robust data in their clinical practice and may increase their use of biosimilars once they see real-life experience and post-marketing surveillance. For skeptical MDs, an EMA’s approval through extrapolation may be insufficient to drive use, so biosimilar companies may produce clinical data in multiple indications to increase confidence among such physicians. With this in mind, some adalimumab biosimilar developers, including Amgen and Sandoz, conducted clinical trials in two indications: psoriatic arthritis and rheumatoid arthritis. Though Boehringer Ingelheim withdrew plans to launch its biosimilar in the EU, the company had conducted clinical trials in three indications: psoriatic arthritis, rheumatoid arthritis and Crohn’s disease.
A key question is, How fast will physicians adopt adalimumab biosimilars and how quickly will they prescribe biosimilars to both naïve and experienced patients? Adoption will depend on the data produced by biosimilar developers, physicians’ prior experience with biosimilars and the relative level of financial attractiveness that the biosimilars command (which could be negated by discounting from AbbVie).
It might be presumed that biosimilar companies will go the extra mile to eliminate doubts from physicians’ minds. Physician adoption of adalimumab biosimilars may be more rapid than that of previous immunology biosimilars (infliximab and etanercept) given the foundation of comfort and familiarity they established; however, AbbVie’s discounts may be at a level that creates a scenario most have not planned for.
2. Payers: European payers have been eager to cut their expenditure on Humira, so it’s not surprising to witness aggressive price competition in the adalimumab market. Countries such as the U.K. and Germany had mechanisms in place well before the entry of adalimumab biosimilars.
In May 2018, the NHS had urged local medicines purchasers to avoid entering into adalimumab contracts lasting beyond October 2018 and created a guidance document to choose a best-value adalimumab, create formulary committees, establish gain-shares and publish patient information. The NHS’s preparation for adalimumab biosimilars has been termed an “orchestrated battle, like never seen before.” Starting in 2016, German payers avoided Humira and encouraged physicians to use biosimilars of other anti-TNFs (such as infliximab or etanercept) for new patients to save costs.
Although payers appear eager to encourage biosimilar adoption, they may face a challenge to switch patients, who would need substantial information and monitoring, and thus require additional resources. Payers’ approach toward adalimumab biosimilars will also depend on AbbVie’s reaction, and any points of differentiation that biosimilar manufacturers may be able to provide. When negotiating with payers, demonstrating overall value will be imperative. It will be interesting to observe biosimilar manufacturers’ ability to negotiate on a broader basis than price.
3. Biosimilar developers: Given payers’ enthusiasm to adopt biosimilars to cut expenditures, biosimilar manufacturers will likely be concerned if this enthusiasm leads to aggressive price competition. Until now, price has largely been a key factor driving biosimilar penetration in the EU. However, this could jeopardize the long-term sustainability of the biosimilar market, and a few biosimilar manufacturers may opt to exit if they fail to meet profit targets. If these manufacturers have hospital contracts, moving out could be a significant risk to the drug supply.
Views of biosimilar manufacturers are divided on whether the biosimilar market should look more like a “bio-generic” market (price-sensitive) or a “bio-branded” market. Although price is of utmost importance for payers, with everyone offering competitive prices, biosimilar developers need to provide value-added offerings to become a preferable treatment option. Considering the size of the adalimumab market, increasing the number of competitors and decreasing room for discounting, biosimilar developers may move the stakes to the next level and play on drug device innovations, innovative contracting, supply chain, shelf life and patient support to differentiate.
The market landscape might also evolve as multiple players enter the market. Some biosimilar developers may revisit their strategy and exit the space for more profitable businesses or avoid entry entirely.
4. Originator: Even with biosimilars entering, AbbVie continues to remain positive and believes that biosimilars will only have a modest impact on Humira’s revenue. AbbVie’s expectations are that ex-U.S. sales could fall by a maximum of 20% by the fourth quarter of 2019. However, a fast decline in Europe will impact these figures as the EU represents a majority of ex-U.S. sales. AbbVie has made its contention clear that it will “compete on price to maintain the vast majority of the line.” Indeed, AbbVie has offered an 80% discount in a European market, likely in the Nordic region, to limit biosimilar penetration in the market. However, the offer might have exceeded the discount provided by the biosimilar manufacturer by a significant amount, suggesting that it could be an isolated approach that will not be reproduced throughout Europe, especially in countries such as France or Germany where discount is not the primary driver to win the market. Still, it suggests that the pricing behaviors of originators and biosimilar developers can be difficult to predict, requiring an agile approach in planning investments at the local level.
AbbVie has also shifted patients to Humira’s less painful citrate-free formulation. However, the advantage can be limited, as biosimilar developers such as Amgen have also introduced citrate-free versions.
Health systems have started to report dramatic savings with biosimilar use in the EU. Along with providing a cost benefit, biosimilars have expanded treatment availability for patients in markets where access was formerly restricted, such as the U.K.
However, one will likely need to observe patient reactions toward anticipated switches from Humira to biosimilars, along with ensuring that physicians and pharmacists are well-equipped to explain the rationale for switching to a biosimilar. This need will be further emphasized if pharmacy-level substitution becomes the norm for biosimilars in more European countries.
As competition grows in the adalimumab market, both originator and biosimilar developers will likely continue to find ways to differentiate themselves through delivery devices, patient support programs, etc.
EU countries have unique dynamics and varied levers and barriers for biosimilars and originators. Even if companies lead with discounts in an attempt to conquer the market, price is only one component of what’s required to succeed in this landscape. Competing with an optimum mix of discount and differentiation will be critical to long-term success and sustainability.