Can biosimilars tear down AbbVie's Humira rebate wall? Just look at Viatris' Lantus copy: analyst

AbbVie’s megablockbuster TNF blocker Humira is about to face biosimilars next year. While new competitors will almost definitely drag down the behemoth drug’s sales, the question is, what pricing strategy can biosimilar developers use to steal meaningful market share?

For an interchangeable biosimilar to Humira, both high list prices and low list prices could find their places in the market, SVB Securities analysts said in a Thursday note.

The team drew that conclusion after examining uptake of Viatris and Biocon’s two biosimilar versions of Sanofi’s popular insulin med Lantus, figuring that Humira copycats could use similar pricing tactics—and get similar results.

The analysis is important for AbbVie because biosims will soon be coming for its biggest drug. And it's important for the biosim challengers who will be duking it out for their share of the $17 billion Humira market in the U.S. But it's also important for other branded drugmakers soon to face biosims—and, of course, for the patients who will be on the hook for copays.

Viatris in November rolled out two biosimilars that can be switched with Lantus at the pharmacy counter. The branded version, Semglee, comes with a high wholesale acquisition cost that’s only slightly lower than the Sanofi original. And the unbranded option offers a hefty 65% discount off Lantus’ list price.

Typically, a drug with a high list price offers more room for steep rebates, which could be enticing for payers and their prescription drug middlemen, pharmacy benefit managers.

For some health plans, the rebates largely go to the employers, who are experienced at managing them to keep health plan premiums under control. So some payers prefer the high-list-price-high-rebate model. Besides, PBMs, which determine a drug’s formulary status, love this model because they earn fees based on a percentage of list price, SVB noted.

Thanks to those sweeteners, a drugmaker can build a “rebate wall” for a well-established product in various indications by offering big rebates. That wall makes it tough for rivals to compete.

Viatris launched branded Semglee to match Sanofi’s rebates. And it indeed worked for some clients. Express Scripts included Semglee on its largest formulary in 2022 but kicked off Lantus, the SVB team noted.

But IQVIA data showed that the lower-priced biosim is getting twice as many weekly scripts compared with Semglee, even though Semglee has been collecting twice the sales as the nonbranded insulin glargine.

Some health plans that pass on rebates to the patients—rather to employers—are immune to high rebates and might choose the low-priced version. Plus, some buyers, such as the Department of Veterans Affairs and regional integrated health organizations like Kaiser Permanente, prefer low-cost products, SVB said.

What does this say about the dynamics between Humira and those upcoming biosimilar offerings? If an interchangeable biosimilar offers a list price that’s very close to the originator’s, “it may be able to compete with Humira’s rebate wall,” the SVB team wrote.

Biosimilar developers will pursue different pricing strategies based on their own marketing capabilities, the SVB analysts said. Several drugmakers are already prepared to launch an interchangeable version or are seeking the coveted label, which could further disrupt the pricing landscape.

By SVB’s tally, Boehringer Ingelheim, Pfizer and a partnership between Teva and Alvotech are expected to launch interchangeable Humira biosimilars in 2023. Amgen is running a trial that could lead to an interchangeability label by early 2024. And Organon’s partner Samsung Bioepis has said an interchangeable offering could be possible around late 2024 or early 2025.