Humira biosimilars catch fire in Europe and could take half the market in a year

AbbVie investors have been bracing for the mother of all patent cliffs—the loss of exclusivity on the company’s $18-billion-per-year Humira—and now its impact is starting to come into view. The mass exodus from the branded product to biosimilars confirms what AbbVie’s executives have already admitted, which is that their initial estimate of a 20% revenue loss in Europe by 2020 was way too optimistic.

That’s one main takeaway from a new Bernstein report on biosimilar adoption rates. Humira biosimilars just hit the market in Europe in October, but pickup has been so strong that Bernstein analyst Ronny Gal took one look at the first full month of sales data and confirmed that the hit on AbbVie’s revenues will come earlier than expected.

"The adoption is essentially all in Germany, with some early noise in France and Italy," Gal said in a video he posted for investors. With more conversions from brand to biosimilar to come in regions like the United Kingdom, Latin America and Scandinavia, he said it’s reasonable to expect "50% adoption of Humira biosimilars by volume within the first year" of its launch.

AbbVie executives said during the company’s fourth-quarter earnings call today that they expected $2 billion in lost sales outside the U.S. from Humira biosimilar competition this year. AbbVie Chairman and CEO Richard Gonzalez had previously said that he was expecting a total revenue loss in all countries outside of the U.S. of 26% to 27% in 2019 alone, but today the company upped that estimate to 30%.

By Gal’s calculations, the 26%-plus ex-U.S. revenue loss means AbbVie is expecting Humira biosimilars to erode European sales by about 40%.

There are four Humira biosimilars on the market in Europe, with two more to come. So far, Gal said, the main winner is the Biogen-Samsung joint venture, Bioepis, with its low-cost version of the drug, Imraldi. It has taken the biggest share of the European market for Humira biosimilars so far, according to Gal, with Amgen’s Amgevita following close behind.

Gal also reported rapid adoption of other biosimilars in Europe, including breast cancer treatment Herceptin. Copies of that Roche blockbuster have been on the market there for 7 months, but the adoption rate has already hit 14%—making it a faster conversion to biosimilars than what was seen with Roche’s Rituxan, Gal wrote.

The loss of exclusivity on Rituxan, Herceptin and Roche’s other cancer blockbuster, Avastin, has put a cumulative $20 billion in annual sales at risk. During the third quarter of 2018 alone, European sales of Rituxan fell 49% to CHF 206 million ($207 million).

Now Roche is facing new Rituxan competition in the U.S., with the recent FDA approval of Truxima, a biosimilar version from Celltrion and Teva. Then-Roche Pharmaceuticals chief Daniel O’Day predicted during the company’s third-quarter earnings conference call that sales erosion in the U.S. wouldn’t be as fast as it has been in Europe. But he conceded that any action on drug prices from President Donald Trump or Democrats in Congress could accelerate the pickup of biosimilars.

In the new Bernstein report, Gal noted that biosimilars haven’t been embraced in the U.S. to the extent that they have in Europe, but he predicted that could change. Biosimilar versions of Johnson & Johnson’s Remicade have only captured 6% of the market in the U.S., Gal said. Several market forces are fighting biosimilar adoption, not the least of which is fear on the part of insurers that if they require biosimilars, physicians will switch patients to more pricey branded drugs instead, he wrote.

So what might liven up the U.S. market for biosimilars? In October, prompted by new rules from the Center for Medicare and Medicaid Services, UnitedHealthcare introduced "step therapy" requirements for some expensive biologics covered by its Medicare plans, including Remicade. Those requirements start patients on lower-cost medications before they can progress to pricier alternatives, and commercial insurance plans could follow suit with similar tactics to drive biosimilar adoption, Gal said.

The introduction of a biosimilar version of Amgen’s Neulasta in the U.S. indicates that American payers are already ramping up their efforts to adopt the low-cost alternatives. 

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