Ahead of Influx of Humira Biosimilars, One Manufacturer Reveals ‘Aggressive’ Pricing Strategy
As potentially as many as eight biosimilars of AbbVie Inc.’s Humira (adalimumab) could launch onto the U.S. market in July, the manufacturer of one of those drugs recently revealed that it would launch its product at a huge discount not seen before in the United States for biosimilar agents. While that highly competitive price certainly will appeal to some payers, commercial payers that favor high-list-price/high-rebate therapies are likely to not cover the agent, say industry experts. In addition, it remains to be seen whether the move signals the beginning of more affordable biologics or the destabilization of the market, they maintain.
On June 1, Coherus BioSciences, Inc. revealed that it would launch Yusimry (adalimumab-aqvh) in July with a list price of $995 per carton — an 85% discount off reference drug Humira’s $6,922 price tag. The tumor necrosis factor (TNF) inhibitor, first approved Dec. 17, 2021, is a low-concentration, citrate-free version of Humira, and it has approval for most of the reference drug’s indications: (1) adults with moderately to severely active rheumatoid arthritis, (2) people at least 2 years old with moderately to severely active juvenile idiopathic arthritis, (3) adults with active psoriatic arthritis, (4) adults with active ankylosing spondylitis, (5) people at least 6 years old with moderately to severely active Crohn’s disease, (6) adults with moderately to severely active ulcerative colitis, (7) adults with moderate to severe chronic plaque psoriasis who are candidates for systemic therapy or phototherapy and when other systemic therapies are medically less appropriate, and (8) adults with moderate to severe hidradenitis suppurativa.
Humira’s approval in ulcerative colitis is for both adults and pediatric patients at least 5 years old, and its hidradenitis suppurativa indication is for people at least 12 years old. In addition, it is approved for the treatment of people at least 2 years old with non-infectious, intermediate and posterior uveitis and panuveitis.
When Humira first launched in the U.S. in 2003, it was priced at $13,572 per year. Since then, it has increased more than 500% to almost $90,000. Yusimry’s annual price will be about $13,000.
“Our Yusimry list price is a clear response to the challenges and needs of patients faced with high-cost adalimumab treatments today,” stated Denny Lanfear, CEO of Coherus. “We believe there is a large, unmet need for improved access and affordability in the U.S. health care system that Yusimry can address with this pricing.”
Coherus also revealed that it will offer Yusimry through Mark Cuban Cost Plus Drug Company, the online pharmacy and generic manufacturing startup backed by the eponymous billionaire investor. The company will sell the drug for $569.27 plus dispensing and shipping fees, making it the first biologic that the company has sold.
“Cost Plus Drugs is saving patients hundreds and thousands of dollars a month by pricing our medications fairly at our cost plus 15%,” said Mark Cuban, co-founder of the company. “Adding Yusimry, a biosimilar of Humira, to Cost Plus Drugs will extend these savings to biologics. This is just our first step in making biologics affordable for patients.”
Not All Payers Will Embrace Yusimry’s Strategy
Madelaine A. Feldman, M.D., FACR, president of the Coalition of State Rheumatology Organizations, hails that Yusimry is available as an autoinjector, is citrate-free — a “very important” attribute — and is a low price. “Bravo Coherus for lowering the price, not just promising a higher legal kickback.” That said, she says she wonders if PBMs will be “shamed into putting it on their formulary. Somehow, I doubt Coherus is going to offer much (if any) of a rebate. It certainly won’t be the gold rush that Humira and Amjevita offer.” The first biosimilar of Humira on the U.S. market, Amgen Inc.’s Amjevita (adalimumab-atto) launched on Jan. 31 at two different wholesale acquisition costs — one 55% below Humira’s WAC and one 5% below it.
“In view of PBM incentives to maximize rebate dollars, it is not clear that lowest biosimilar price will ensure Yusimry a preferred place on formulary,” declares Elan Rubinstein, Pharm.D., principal at EB Rubinstein Associates, who notes that Amjevita’s higher WAC has been on formularies while the lower WAC has been excluded. “However, Yusimry’s significantly lower launch price provides PBMs with additional negotiating leverage against the reference product and its currently marketed and coming biosimilars.”
A payer, he says, may choose to take the easiest route by selecting its PBM’s standard formulary, as the payer “may not have in-house expertise to independently evaluate the PBM’s formulary decisions. In addition, the PBM may warn of cost implications should the payer opt for a custom formulary.”
The 85% discount is “aggressive,” notes Renee Rayburg, R.Ph., vice president of specialty clinical consulting at Pharmaceutical Strategies Group (PSG), an EPIC company, and echoes those of generics with multiple drugmakers, as well as Humira biosimilars in the European Union. Biosimilars launching in the U.S. have usually been at a 30% to 40% discount to their reference drugs. Yusimry, she tells AIS Health, a division of MMIT, is likely to be the lowest priced biosimilar of Humira launching next month.
“We will see, but it seems to be creating a very competitive environment for the others — competition is good and should generate savings,” she contends.
What it will come down to, says Rayburg, is whether Yusimry’s price will ultimately be lower than the net prices of its competitors after rebates. “Currently just about every PBM, including the ‘big three,’ continue to cover Humira in a preferred position, and in these arrangements, AbbVie supports or continues to pay rebates as long as the biosimilars are at parity with Humira. As a result, if Humira and any biosimilar are covered in the same preferred position, at the same copay, there will be no incentive for members with a flat copay design to switch.”
Formulary coverage, she maintains, will be the most important factor for uptake of the biosimilars. “For those PBMs that will continue to cover brand Humira in a preferred position, I am not sure how much impact covering the biosimilars will have. However, transparency in pricing and low list prices seem desirable by some payers. Will that be enough to force some strategies to prefer a biosimilar? Time will tell, but as I have long said, the presence of biosimilars alone can create competition that leads to lower prices for all products, which is a step in the right direction to start to take advantage of savings for this longtime No. 1 spend for payers. There are a finite number of health care dollars, so many payers are interested in any/all strategies that can lead to savings.”
Multiple competitors within the space will “increase pressure on launch price, on negotiated net price and on the erosion of both list and net over time,” states Rubinstein. “But while rebate maximization may prevail today, PBMs’ traditional rebate-driven business model is under increasing pressure due to ‘transparent’ (aka pass-through) PBMs and due to current Congressional investigations into PBM business practices. Regardless of uptake of one or another adalimumab brand, adalimumab price erosion will prevail. In turn, because adalimumab is dominant in this therapeutic category, its price erosion will increasingly pressure pricing of therapeutically competitive reference brands and biosimilars.”
Yusimry’s low price “is not a complete surprise,” asserts Andy Szczotka, Pharm.D., chief pharmacy officer at AscellaHealth. “To compete with the other options that will likely have multiple strengths available, interchangeability, lack preservatives in their formulation and have a convenient injection device, a low price was likely the most feasible option to potentially gain a portion of the low-concentration adalimumab market.” He points out, though, that the agent is seeking approval for a high-concentration 80 mg/0.8 mL version, and pricing for that “will likely be key to the success for Coherus long-term in the adalimumab market.”
“This should be a boon to the self-insured employers with employees who have rheumatic and GI conditions treated with adalimumab,” says Feldman. “That is, if their PBM or other third-party administrator is truly interested in getting the employer the best price, not the biologic that makes them the most money.” Medicare will benefit as well, she says, noting that “they won’t get the same kind of rebates as they do from high priced adalimumab, but if the price is really low, who needs rebates (which is what I’ve been saying for a long time)?”
“Let’s hope this disruptor finally creates true competition to lower prices, not just competition to raise your rebates and fees which are a percent of the list price,” she says.
People with high-deductible health plans “will benefit the most from Yusimry’s lower cost, so payers who offer this type of plan design may consider covering this biosimilar,” maintains Rayburg. “So, the question remains: Will Humira rebates increase to compete with the biosimilars entering the market in July? One would expect that to be the case, but time will tell, and payers will need to communicate with their PBMs to determine.”
“On the one hand, Coherus’ pricing strategy may end up appealing to customers that are highly cost sensitive and most interested in a low net cost but are not depending on rebates. For patients who are on a deductible and/or have a coinsurance on specialty, this could be a driver of uptake, as long as their plan covers the drug,” says Dan Danielson, R.Ph., senior director of the access experience team at PRECISIONvalue. “On the other hand, it may not be a favorite of PBMs, who are more interested in high-WAC/high-rebate pricing strategies. The question is if this pricing will trigger PBMs to begin to lose their grip on adalimumab.”
Danielson tells AIS Health that at least early on, Yusimry’s pricing strategy will appeal to payers “who have a high degree of influence over prescribing, such as closed-system IDNs [integrated delivery networks] and potentially Medicaid plans.” However, he notes that because the drug is not interchangeable with Humira, “the main issue is that…physicians will need to know the product. Coherus will need to market the drug actively in order to gain name recognition. IDNs with a high level of influence would be able to educate their providers, potentially drive prescribing through a number of means such as internal pathways, EMR [electronic medical record] positioning and the like.”
In a June 1 analyst note, Evercore ISI maintained that “unless a payer can convert a significant % of total adalimumab use to the biosimilar within the first few months, it probably costs the payer $. Hence, there will probably be more ‘parity access’ management until there’s some critical baseline mass of biosimilar use. A great example of reflexivity.” Because the costs to switching for payers “are pretty high,” the firm says it does not expect much biosimilar adoption until starting in 2025.
What Role Will Cost Plus Drugs Play?
As far as the Cost Plus Drugs offering, Rayburg points out that since its January 2022 launch, it’s been an “online/mail-only company with a direct-to-consumer type model, in which they won’t use money to advertise and rely on word of mouth.” In February, the company said it had reached 2 million customers since its start. It’s developing a network of independent pharmacies, and Yusimry also will be offered through them.
Cost Plus Drugs has “limited access to payers, which could prove to be a challenge,” she explains. “They did announce in January that they formed partnerships with three PBMs (Rightway, EmsanaRx [which recently changed its name to AffirmedRx] and RxPreferred) that will allow them to enter the payer market.” Still, it’s “fair to assume uptake of Yusimry from the payer perspective is expected to be low.”
On June 13, PBM SmithRx revealed that it would be one of the companies selling Yusimry in collaboration with Cost Plus Drugs.
Feldman says that the Cost Plus Drugs price is “wonderful,” but “while this is an unbelievable price for adalimumab, it is still unaffordable for most.…If it is not covered by insurers, most patients still will not be able to afford nearly $600 a month. But we have to give Coherus credit for launching with a very steep discount and almost daring the PBMs not to cover Yusimry.”
Rayburg says this price difference is “significant” considering how many of PSG’s clients have asked about how they can control Humira spend. However, while Humira and Yusimry both are citrate-free with a 29-gauge needle, the biosimilar is not high-concentration, where the bulk of Humira prescribing lies.
“Will that make a difference to patients switching?” she asks. “We are not sure, but it is possible and could create a challenge to transition some patients.” Three other biosimilars — Yuflyma (adalimumab-aaty) from Celltrion USA, Hadlima (adalimumab-bwwd) from Organon & Co. and Hyrimoz (adalimumab-adaz) from Sandoz — that are high-concentration, citrate-free and have a 29-gauge needle are expected to become available July 1, “in addition to brand Humira, which will still be available in preferred positions on most PBM formularies.”
In addition to manufacturers using this price to determine launch prices, Rubinstein says that PBMs may use this pricing in their formulary negotiations. “Because this is a cash price, insured patients will prioritize their own coverage where that yields a lower out-of-pocket cost net of manufacturer copay assistance. Income-qualifying uninsured and underinsured people may be able to access adalimumab through manufacturer or foundation patient assistance.”
He points to a recent Forbes article that maintains that people taking multiple prescription drugs who are likely to hit their deductible and who are subject to copay accumulators or maximizers may find Yusimry appealing to help ensure that their plan coverage starts once they reach that deductible. “In essence, the low wholesale acquisition cost price for Yusimry reduces the value of co-pay accumulator programs to PBMs,” writes author Joshua Cohen.
Danielson says that changes in the Inflation Reduction Act (IRA) could make pricing strategies like Coherus’ “very attractive” to Medicare Part D plans starting in 2025. During a recent webinar, longtime industry expert Adam J. Fein, Ph.D., CEO of Drug Channels Institute, noted that the IRA’s Part D redesign “essentially makes high-list [price]/high-rebate products much less attractive to Part D plans. In fact, standalone Part D plans are in big trouble.…There are going to be opportunities to get on the formulary without having to give the big rebate.”
Will Move Make Biologics Affordable — or Destabilize Market?
Danielson contends that “the most significant thing is that this deal telegraphs how much in discount and rebate Coherus could potentially give payers. So now the concern is can Coherus sustain Yusimry should they need to buy access, shrinking their net? This will be the same challenge the other biosimilars will also have to face now. Will Mark Cuban’s Cost Plus usher in an era of affordable biologics or create an unstable market?”
If pharma companies can be profitable on a 92% discount off Humira, then “perhaps” that will become the new standard for biosimilars, says Danielson. “The worst outcome would be an all-out race to the bottom, creating an unstable, unsustainable market.”
Ultimately, he says, “it’s possible that sub-one-thousand-dollar adalimumab products may cause PBMs to lose influence over these products, but I suspect they will have a firm grip for at least a couple more years. We’ll just have to see if enough of the biosimilars are able to survive and create a stable market. In this case, an unbridled race to the bottom on price — as odd as it may sound on the surface — would not be a good thing for the long term.”
If a race to the bottom were to occur, Rubinstein says he wonders whether “an innovation-based biopharmaceutical manufacturer that is heavily invested in its biosimilar franchise [will] continue to support that franchise?” Another question he has is whether companies whose products experience price erosion will continue to provide current levels of product support offerings, including sales and patient assistance. In addition, “there are several critical pharmaceuticals in shortage today because low price points offer unappealing profit potential for manufacturers — going forward, might biosimilars in highly competitive categories be at risk?”
“Coherus is embarking on a transformative business strategy for biosimilars,” declares a retired biotech executive who declines to be identified. “With a list price of $579, a 92% reduction to AbbVie’s price on Humira, Coherus will undercut the market so all objections to using the biosimilar will be moot. Both private and public insurance will find the savings too difficult to ignore. Cash-strapped private insurers like Medicare, Medicaid and TRICARE will find it impossible to ignore the price discrepancy. The question is whether this becomes the de facto biosimilar strategy for all biosimilars going forward.”
If it is the new standard for biosimilars, “will established name-brand companies like Amgen still play in the market?” asks Rubinstein. “Coherus is a marginal player. Are small, new, little-known, relatively inexperienced, limited-capacity and lightly capitalized biotech companies the only ones willing to play at that price point?”
“Amgen will stay in the biosimilar space,” declares Danielson. “The question is how they will place Amjevita in amongst the swarm of adalimumab products launching July 1.”
In addition, he says, “it is hard to imagine companies with little to no specialty/biologic experience [and] limited-production capabilities will be successful given what would appear to be slim margins. Without sufficient investment, such a startup probably would likely not have enough funding to continue business until they became profitable.”
“While welcome from a payer perspective, it is unlikely that a 92% discount off the reference price for biosimilar products will become a pricing standard,” declares Szczotka. “For the adalimumab market, biosimilar manufacturers will likely adopt somewhat different strategies to gain a piece of the adalimumab market due to the anticipated high number of market entries. Some manufacturers will follow the Coherus model and have a low-cost strategy to boost sales and have market penetration. This will especially be true if they are unable to offer any market differentiators such as interchangeability, the availability of a high-concentration formulation or offer patient support programs.
“Other manufacturers will likely follow a more traditional marketing approach,” he continues. “They will offer a pricing discount as compared to the reference product Humira, but it is unlikely to be as steep as the 85% WAC discount offered by Coherus. Regardless, it is likely that a variety of pricing and discount strategies will emerge from the various biosimilar manufacturers and a clearer picture of the adalimumab market and pricing will play out early in the third quarter of 2023.”
Contact Danielson via Asha Strazzero-Wild at Asha.Strazzero-Wild@precisionvh.com, Feldman at email@example.com, Rayburg via Betsy Van Alstyne at Betsy.VanAlstyne@psgconsults.com, Rubinstein at firstname.lastname@example.org and Szczotka via Caroline Chambers at email@example.com.
By Angela Maas