Steven Lucio Discusses the Changing Dynamics of the Adalimumab Market

February 9, 2021

Steven Lucio, PharmD, BCPS, vice president of Pharmacy Solutions for Vizient, discussed Vizient’s forecast for adalimumab price increases and the market implications of high-concentration adalimumab.

The Center for Biosimilars® (CfB): Hi, I'm Tony Hagen, senior editor for The Center for Biosimilars®. Today, we're speaking with Steven Lucio, PharmD, BCPS, vice president of Pharmacy Solutions for Vizient. Lucio spoke with us about the Vizient's forecast for a 7.5% increase in the price of adalimumab [Humira] before biosimilar competition comes onto the US market in 2023. He also spoke with us about product differentiation and how these forces are shaping the adalimumab market.

This adalimumab story is getting more interesting with a high-concentration, citrate-free version and what it will do to competing products, patient access, and prices. Vizient is predicting a 7.5% increase in adalimumab pricing over the next 18 months. Can you explain how you estimated this increase?

Lucio: Absolutely, this is a key function of our pharmacy market outlook, where we take the trends that we see in the purchase patterns from our member organizations. Vizient is a broad industry, large organization that provides health care insights and supply chain support for many different types of members, from academic medical centers to pediatric organizations, and even nonacute environments. So, every 6 months, we provide an analysis of the trends that we see to estimate the pricing behavior for the next 6 to 18 months.

When we looked at the trends in purchasing as well as the insights from our leaders and our individuals who manage relationships with the pharmaceutical supplier entities, and also just based upon what we see from trends, we anticipate that level of a price increase for Humira. It's the No. 1–used medication globally, within the United States, and within the Vizient membership. So, that place is quite prominent.

When we see and project pricing behavior of that magnitude, you know that it's going to have a substantial impact. So, that's why we've called attention to it and try to reinforce the focus to make sure that people are understanding how that change will impact not only their purchasing behavior, but also [their preparation] for things like biosimilars. That's something that we've looked forward to and that we hope occurs, and we're eagerly awaiting 2023. We know that we’ve got to stay focused on it because we expect these trends to behave as this life cycle for this very important medication continues toward its end.

CfB: So, your estimate is based on historical price increase behavior by AbbVie [Humira’s manufacturer]?

Lucio: Yes, it's based upon what we see in terms of their pricing behavior and also what we expect going forward and what you see with other molecules that get close to the end of their life cycle before there's competition, either in the generic or biosimilar format. You do see that tendency toward increased pricing if those products don't have substantial competition from other molecules, and that trend seems to be holding in terms of what we're expecting and what we've seen. So, that's how we're projecting it—as a significant pricing circumstance for our member organizations going ahead the next 6 to 18 months.

CfB: Has AbbVie given any notice of coming price increases?

Lucio: Generally, pharmaceutical organizations don't signal price increases in advance. They are somewhat consistent in terms of when they [impose] price increases. That can vary. Frequently, you see price increases at the beginning of the year, and I think we've seen some of that recently. So, they may have a certain commonality of when price increases occur, but in terms of what they are going to be, not necessarily. They don't convey that information in advance because if they communicate that they're going to have a price increase, then people might be inclined to purchase a lot of product at a lower price in advance, and there's issues associated with that. It could even create supply circumstances. So, generally, they don't say what they're going to do, but you kind of have a sense of when they're going to do it based upon previous history.

CfB: You mentioned a couple of reasons why AbbVie would be increasing the price of this product already, such as that it’s coming to the end of its exclusivity period. Any other reasons why they might feel that they have to raise their prices?

Lucio: Well, to give AbbVie and every other manufacturer the benefit of the doubt, we do live in a time where there are cost-of-living increases and normal inflation. The pandemic has obviously had an impact on the economy. But I think people would normally say, yes, there is an expected increase in your expenditures, but not on the magnitude of what we're seeing and what we expect to see for Humira and other commonly used, high-cost medications.

CfB: In your in your drug price forecast, you anticipated a general biologics price increase of around 4%. Can you discuss that for a moment?

Lucio: We look at multiple different elements we provide in the overall price increase, which is 2.67%. We also look at specific areas like specialty pharmaceuticals, as well as pediatric pharmaceuticals. So, what we see in those areas is a more modest increase compared with things like the Humira increase. That's based upon certain circumstances. We've, fortunately, still had generics come to market and for some big products that are used in the inpatient setting. One of those is quite prominent. It's almost the complete inverse of what we would say with Humira in terms of a complex biologic, but one of the biggest banes of existence for health care providers and hospitals has been injectable acetaminophen (basically, injectable Tylenol), which has driven tremendous pricing pressure and cost pressure on the hospital environment for the last decade. I believe we projected a 30% decrease [due to the arrival of generics in this category]. So, those types of decreases as well as biosimilars. So, where there has been competition either in the infliximab market, the rituximab market, or the [markets for] other monoclonal antibodies, [this has] arrested the price increases that were in place before those products faced competition. That has blunted the overall projections that we see, which is desirable.

But, of course, that has not happened for Humira, or Enbrel [etanercept], which is another product that we anticipate having similar price increases. With Enbrel, we don't have as clear of a timeframe as to when that product is going to face biosimilar competition, but it's clearer for Humira—we are [anticipating an] increase.

CfB: Historically, the prices of Enbrel and Humira have gone up quite dramatically. Can you talk a little bit about that and what have your observations been?

Lucio: Our observations have been that these are very prominent, and again, they're important medications, but they have increased substantially in prices as the value of those franchises has continued to grow. This is where things get complicated in terms of the market in which these products are delivered. I've often said that biosimilars have faced many challenges. Some of those challenges are very much the function of the biosimilar environment—the fact that it's new, that we've had to figure out all of these different nuances, that the FDA has had to understand how these products should be approved, certain marketing decisions as initial products are brought to market. But there are other things that had nothing to do with the biosimilar issue that have been challenges for that market. One of those is the environment in which medications are delivered and the infrastructure to govern the delivery and the payment of those products.

On the inpatient side, it's a little bit clearer and a little bit easier because you don't have separate reimbursement for those medications. So, if you get the opportunity have a generic or biosimilar that's less expensive, you buy the less expensive product, or it's an easier conversion. Conversely, on the outpatient side, or the nonacute side, where you do have separate reimbursement, there is this weird balance: "I don't want my drugs to get higher in price, but if the drugs go down in price that could affect the revenue reimbursement rebate circumstance." I'm not trying to dismiss what AbbVie has done in taking price increases, which creates more pressure for the health system and the environment overall and the challenge for patients, which is the most important, but it's a different environment because some of the delays we've seen with biosimilar uptake in the past have been because not only are the prices lower, but the reimbursement might be lower. I'm not saying anyone wants price increases for these products, but when they occur in the outpatient, nonacute retail setting, it's a different balance.

So, we've heard conversations about to what extent do payers address price increases? Do they just deal with it? Does that affect their rebates? What is the ultimate impact on patients? Overall, it's a different, more complicated landscape, and we have to bring in biosimilars to arrest that. Also, I think long term, we're going to have to understand how we pay for medications in a different way, more based upon the value and the outcomes that those medications provide as compared to “I’ve got this franchise, this monopoly, and what can I do to try to sustain that going forward.”

CfB: Let's discuss the high-concentration version of adalimumab. You have Celltrion and Alvotech, positioning themselves to compete with this. What does this mean for the competing products that have approvals from the FDA and are lined up to come into the market in 2023 with a lower-concentration format?

Lucio: Well, that's one of the dynamics that we see. When it is clear that there's going to be competition, there is that tendency from the originator companies to try some other form of innovation. Not just the molecule, but the presentation or some other element of the formulation. We've seen that with small molecules. We've seen it with the biologics because now we've got subcutaneous formulations of rituximab and trastuzumab. The way in which AbbVie seems to be going about it—and there are potential benefits for patients—is to make the concentration higher. So, the volume you have to administer to a patient or that the patient administers to themselves is not as large and, as well, potentially minimizes pain by taking the citrate element out of the formulation. And that does create another dynamic that biosimilar companies are going to have to compete against. From what we've seen for the products that have been approved but have not launched to date, some of them don't have citrate. So, they've overcome one hurdle, but of the products have been approved, they're all of lower concentration, and that's definitely another threshold that potential competitors are going to have to overcome.

We are talking with our supply partners right now to figure out how they intend to overcome it. Part of it, obviously, is just the educational piece but the biggest piece, I think, is really understanding how you communicate the opportunity for value and make sure there is value for the end user being the patient, because if the patient is ultimately impacted in terms of their copay then, they really are the ones that have to be the drivers of these decisions. If there's a substantial financial hardship with them sticking with the originator, with this higher-concentration, citrate-free product, then they can decide how much is that worth for them. I think that's ultimately going to have to be the biggest area. I think there'll be a lot of education.

Hopefully, depending upon what the patent courts say, maybe there's some way for these other companies that are trying to develop the higher concentration to get to market sooner, to get approved and actually get in the supply chain. So, that's one way to do that, but I don't know that everybody's going to be able to do that, will have the opportunity to do that, and will be able to do that by 2023. For those who cannot, who either have the lower-concentration and/or citrate-containing products, they're going to have to work with the provider communities to figure out how to communicate that and ensure that there is value to patients so patients can decide to what extent is this difference meaningful to them. We definitely don't want to make life harder for patients, and we don't want them to have a formulation that is more difficult or causes more pain, but it's also a pain if you're having to make decisions regarding your medication use and are having to curtail needed expenses elsewhere.

It is a decision if the drug treatment that you're taking is putting you at hardship for other circumstances. And so, that's probably the place where it has to be. But obviously, it's a very convoluted circumstance and there's a lot of interest in this in terms of what can happen between now and January 2023, when we start seeing these competitors come into the market.

CfB: Do you feel that these competing products might have a chance if patients can accept the higher pain associated with citrate-containing versions of adalimumab?

Lucio: Yes. I think that's where it's going to have to be the patient's decision because rheumatoid arthritis, and as someone who doesn't have that disease, that’s very painful. I would fully expect that not only providers who might start using these products, meaning the biosimilars, but also the manufacturers of biosimilars are engaging at this point with the patient community to understand what type of opportunity might exist and how to mitigate that.