In a move truly befitting of Halloween, Sanford C. Bernstein analyst Ronny Gal stopped the biosimilar industry dead in its tracks on October 31st by sharing that a national tender in Europe had been secured — but not by one of the new biosimilar Humira products. Instead, according to Gal, AbbVie’s Humira won a currently unrevealed national tender thanks to a startling 80 percent discount to the pre-biosimilar price tag.
No doubt, taken at face value, this news led to a collective rise in the biosimilar industry’s blood pressure and frustration. (It certainly raised mine.) Only a few short weeks ago, I’d blissfully published a series of articles about this biosimilar tsunami, one of which was titled “A Possible ‘Humirageddon:’ Perspectives On the EU Biosimilar Launch.” Clever headline aside, I don’t think any of us truly expected to be facing a “Humirageddon” within two weeks of the triumphant EU biosimilar entrance.
But it also made sense AbbVie would hit the biosimilar industry back — and hard. After all, should originator Humira continue to reign supreme in many EU markets, there’s a great chance this could become marketing fodder for AbbVie. As Gal noted, by restricting biosimilars from certain markets, AbbVie could easily point to the lack of experience abroad to reinforce and raise further questions about safety and efficacy come 2023 as companies prepare their U.S. launches.
However, as the dust clears from the initial news, things are less clear-cut than they may have appeared. As fellow journalists at RAPS and The Center for Biosimilars shared, AbbVie has not actually confirmed it is supplying its product at an 80 percent discount, nor has it admitted to winning this secret tender by providing that high of a discount. This information was not listed in the company’s third-quarter earnings statement. Rather, CEO Rick Gonzalez stated in the company’s earnings call that AbbVie has seen biosimilar Humira discounts ranging from as low as 10 percent to as high as 80 percent across the EU markets. Gonzalez noted that some of the highest discounts are occurring in the Nordic countries. This should be no surprise, given the once-controversial 70 percent discount for Inflectra in Norway a few years ago. (To keep things in perspective, however, the Nordic countries only account for a meager 4 to 5 percent of AbbVie’s international market share.)
Even though some time has passed since this news broke, I still remain puzzled by AbbVie’s lack of transparency. Seeing as some innovators have gone to great lengths to protect market share, it would have made more sense to me had AbbVie — the King of Patents — proudly emerged through the mist declaring this discounting news whilst waving a blazing torch. (I suppose I should give them credit for not doing this.) Forwardness about extreme discounts could have been a great intimidation tactic. After all, AbbVie is in a position of power financially compared to biosimilar makers. Since Humira’s 2002 FDA approval, AbbVie has recouped its investments (and then some) and established a cost-effective manufacturing strategy. And let’s not even broach the relationship it has established with patient groups, which was recently highlighted in this scintillating article (subscription required).
But so far, AbbVie seems more interested in pointing at the biosimilar industry as the harbinger of these 80 percent discounts. Given the different reimbursement policies around Europe (e.g., price matching), it’s highly likely AbbVie has had to match higher-than-expected biosimilar discounts — perhaps even as high as 80 percent. But in the biosimilar industry, we also (should) know the dangers of pricing ourselves out of the market before it even begins. In fact, most of the articles about the great Humira biosimilar launches I’ve read or published emphasized, first-and-foremost, the need for responsible pricing.
So, my list of questions remains: have we in the biosimilar industry become so bewitched by the opportunity to give AbbVie a much-needed run for its money that we’ve thrown caution to the wind and offered audacious 80 percent discounts right off the bat? And, if biosimilar companies have been willing to provide such steep discounts so early on, were they part of an established strategy or a side-effect of desperate competition? Could these discounts be a sign that some biosimilar companies have savvier commercialization plans or are on stronger ground financially than we’ve anticipated?
I think it’s also important to consider whether AbbVie’s claims about the high discounts it’s facing — as opposed to proposing or implementing itself — is the complete picture. Could these remarks simply be an effort to make the biosimilar industry appear irresponsible and keep those of us watching from the outside alarmed and on our toes? Is the EU Humira biosimilar market actually in danger because of these discounts, or has it just fallen prey to rampant speculation, thanks to an innovator’s carefully chosen words?
Sadly, as I have yet to become omniscient (surely any day now), I cannot answer these questions with certainty. But I’m sure some of you out there have your own thoughts and questions. I’d welcome you to share these in the comment section below, or you can email me (always off-the-record) at email@example.com. In the meantime, keep calm and carry on — preferably with a tub of popcorn.