With EU salivating after Humira biosims, analysts start questioning AbbVie's optimism

Humira biosimilars will hit the European market next month, but AbbVie executives are still soft-pedaling the threat to their top line. CEO Rick Gonzalez and his colleagues say they'll match competitors on price to keep Humira's market-leading position.

In fact, AbbVie executives have told analysts to expect sales of Humira—which account for more than 60% of the company’s total revenues—to drop no more than 20% in Europe by the end of 2019.

Problem is, some market-watchers now figure that's far too optimistic. 

Four Humira biosimilars are expected to hit the EU market in October, including products from Amgen, Boehringer Ingelheim and Sandoz. Six more Humira copycats could be on the market in 2019, according to Decision Resources Group. That's 10 biosims, all jockeying with one another—and AbbVie—for a share of the stakes.

Under such circumstances, would AbbVie's biosim-fighting strategies be enough to limit its losses overseas, where Humira captures one-third of its global $18 billion haul? Analysts are starting to express doubts. The sheer number of Humira biosimilar developers is colliding with another important trend: Officials in some European markets—and other overseas locales—are making it clear that they’re salivating over the prospect of Humira biosimilars offering new and potentially lower-cost alternatives to physicians and patients.

Price-matching could turn to bleeding. Even preserving share wouldn't be enough to stanch the losses. “The number of upcoming [Humira] biosimilar competitors is likely to trigger a price war across European countries, as companies vie for a dominant share” of the market, wrote Decision Resources analyst Hamzah Aideed in a note earlier this year.

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During AbbVie’s second-quarter earnings call in July, one analyst questioned the company’s estimates for Humira sales erosion, given Europe’s growing experience with biosimilars and the fact that the product is so much bigger, sales-wise, than rival drugs that have already lost their patent protection there, including Johnson & Johnson’s Remicade and Amgen’s Enbrel.

Humira, replied AbbVie CFO Bill Chase, “is growing at a nice pace, and so that will make the decrease relative to peak look a little less severe than one would think.” He added that biosimilars would be rolling out in different European countries at different times, making the prospect of one big hit to sales unlikely.

Perhaps, but some overseas agencies that exert considerable power over drug markets are making it clear they’re rolling out the red carpet for Humira biosimilars. England’s National Health Service (NHS) told Reuters it had ordered health administrators not to sign any new Humira contracts with dates extending past October, when the biosimilars are expected to start hitting the market. NHS has suggested 90% of new patients and 80% of existing patients be switched to biosimilars of any drug within a year of their becoming available. France recently upped its goal for biosimilar penetration by 2022 from 70% to 80%, vowing to introduce digital tools to help health providers make the transition.

AbbVie did not respond to a request for comment from FiercePharma.

Until recently, most analysts were buying into AbbVie’s optimism about continued Humira growth in the face of biosimilar competition overseas: The consensus estimate is that the product’s sales will be $20 billion this year and just north of $21 billion by 2022. But on Aug. 30, Credit Suisse put out a report predicting Humira sales would start falling in 2020, shrinking back to $18 billion in 2022 and then falling even further, to $16.4 billion, the following year.

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Part of Credit Suisse’s pessimism stems from Remicade, marketed in Europe by Merck, and Enbrel, sold by Pfizer. All three drugs are prescribed to treat inflammatory diseases such as Crohn’s and rheumatoid arthritis. Remicade faced its first biosimilar rival in the EU in 2015, and Enbrel followed in January 2016.

Sales of branded Remicade in Europe fell 66% in three years “primarily due to biosimilar players’ aggressive price discount to win government tenders,” Credit Suisse reported. Enbrel has lost one-third of its sales so far, with Pfizer taking mandatory price cuts in some countries.

Humira may not fall so rapidly to biosimilar competition in the EU, estimates GlobalData, because many patients who take the drug get their prescriptions on an outpatient basis. That means the hospitals facing the most pressure to adopt biosimilars aren’t the ones making the decisions. Still, GlobalData estimates that even in outpatient gastroenterology clinics, biosimilar Humira will account for 45% of prescriptions by 2021.

And Europe isn’t the only overseas market AbbVie and its investors have to keep their eyes on. In July, Australia’s Pharmaceutical Benefits Advisory Committee recommended that two Humira biosimilars—Amgen’s Amgevita and Samsung Bioepis’ Hadlima—be treated as equivalents to the original drug. That means pharmacists can substitute the lower-cost alternatives for all approved indications unless ordered not to do so by the prescribing physicians.