AbbVie's massive Humira discounts are stifling Netherlands biosimilars

Could a drug's price ever be too low? That’s what some market-watchers are asking in the Netherlands, where AbbVie is discounting Humira as much as 89%.

The De Groene Amsterdammer dug into the procurement process for Humira biosimilars after they launched in Europe last year and turned up aggressive discounts that have effectively held off biosimilar rivals. And some of those would-be competitors have pulled back from the market because of those discounts, the newspaper reports.

At least 70% of Dutch patients remain on Humira, according to the publication. And no wonder: AbbVie struck a discount of up to 89% in one case to retain business for its original biologic.

Those discounts could be a red flag for Humira's sales outside the U.S. this year, Bernstein analyst Ronny Gal figures. His team had expected ex-U.S. Humira sales to fall 35% this year, "but if that report is indicative of the broader environment, cuts may be much deeper," he wrote in a note Monday.

In the Netherlands, though, the worry is that AbbVie's discounting will drive biosimilar makers out of the market. One company has discontinued its version of the megablockbuster, De Groene Amsterdammer reports. Another only counts one hospital pharmacy as a customer in the country. And another company didn’t sell any of its biosimilar after six months of preparation and chose to export its Humira copies. Amgen and Sandoz each have had limited success there, the publication says, despite their powerful marketing muscle.

And at least one expert warns the drugmaker could raise prices if the other biosimilar makers call it quits. After all, AbbVie would have renewed pricing power without those competitors.

"This is a form of ruthlessness that we really only know from the American market," Arnold Vulto, honorary professor of hospital pharmacy at Erasmus MC, told De Groene Amsterdammer, according to a translation. He called it a form of "market poisoning" and said AbbVie could charge high prices again with a renewed monopoly.

Now, the Netherlands’ competition authority is looking into the procurement process, the publication reports. 

In the Netherlands, hospitals join together to increase purchasing power and secure discounts on drugs such as Humira. Each group individually negotiates with pharma companies. In one case, a hospital group disbanded over a disagreement on Humira biosimilars, the publication reports.

Another catch for those considering biosimilars? Each hospital retains an amount of the original drug for patients who are allergic or don't otherwise benefit from copycats, the publication reports. If a hospital chooses to go with the biosimilar, AbbVie can refuse discounts on the Humira that facility does buy, diminishing the financial incentive for hospitals to switch over to biosimilars.

An AbbVie representative declined to respond to the article’s "claims and speculations," the publication reports. 

Even AbbVie executives themselves have said the competition is fiercer than they expected after biosimilars launched in October. The company lowered its ex-U.S. sales estimates for the drug in 2019 after one quarter of European competition. 

Meanwhile, the company has the key U.S. market to itself until 2023 under patent agreements inked with various biosimilar makers. The U.S. made up most of Humira’s nearly $20 billion in global sales last year. As U.S. biosimilar launch dates near, AbbVie hopes new immunology launches Skyrizi and upadacitinib can pick up steam. One Humira biosimilar maker, Boehringer Ingelheim, has chose to hold out and fight its patent arguments in court rather than settle. 

And AbbVie can take solace in the fact it’s not the only company to have upset market watchers in the Netherlands. Previously, Dutch health minister Bruno Bruins accused Novartis of exploiting an orphan designation on Lutathera to overprice the drug, which treats certain neuroendocrine tumors. Novartis responded that it "carefully considered" the price and that the price is similar to other drugs for the patients.

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