The most lucrative pharmaceutical monopoly in industry history is almost at an end.

In January 2023, the first copycat version of Humira, an injectable drug approved for an array of inflammatory diseases, is set to launch in the U.S. Its arrival will mark the end of a two-decade run of market exclusivity during which Humira's maker, AbbVie, has earned nearly $200 billion from sales of the drug.

Eight more biosimilars — as copies of biologic drugs are called — are expected to become available over the course of 2023, putting AbbVie under pressure. Anticipating the competition, the company has spent the past several years attempting to lessen its reliance on Humira, which as recently as 2019 accounted for more than half its revenue.

While pharmaceutical companies periodically confront these "patent cliffs," none have been steeper than what AbbVie faces with Humira. Until now, the most lucrative product to go generic was Pfizer's cholesterol drug Lipitor, which at its height sold about $13 billion a year. In 2021, sales of Humira totaled $20.7 billion.

The launch of Humira biosimilars also is likely to be a major moment for the broader industry, as their arrival is the biggest test yet of whether biosimilars can save the healthcare system significant amounts of money. So far, the biosimilars currently available have not lived up to previously high expectations of their impact.

The question will matter to more companies than just AbbVie, as several drugs like Humira, such as Enbrel and Stelara, also will lose their patent protection this decade.

"The sheer number of biologics facing competition is quite significant through the next decade," said Joe Azzinaro, commercial lead for biosimilars at drugmaker Organon, which expects to launch a Humira biosimilar in 2023.

Replacing a blockbuster

AbbVie sells Humira today because its former parent company, Abbott Laboratories, in 2000 acquired Knoll Pharmaceuticals, the drugmaking business of German chemicals company BASF. At the time, Humira was called D2E7 and analysts believed it might someday make between $500 million to $1 billion annually.

Yet Abbott and then, after a 2013 spinout, AbbVie proved Humira could work for many more diseases than rheumatoid arthritis, the condition it was first approved to treat, and steadily expanded its use. At the same time, AbbVie meticulously built a wall of intellectual property — sometimes called a "patent thicket" — around Humira and each new indication.

All told, AbbVie filed about 250 patent applications for Humira in the U.S., 90% of them following the drug's 2002 approval, according to the advocacy group Initiative for Medicines, Access & Knowledge. One hundred and thirty have been granted.

The strengthened patent shield has stretched AbbVie's legal monopoly in the U.S. for six years beyond the expiration of Humira's main patent in 2016. Since then, AbbVie has earned nearly $75 billion in U.S. Humira sales, bolstering the company's share price and allowing it to pay billions of dollars to investors in dividends. (The story is different in Europe, where biosimilars arrived in 2018 and quickly ate into Humira's market share.)

Moreover, the added revenue — padded by price hikes that increased Humira's price to Medicare by 41% between 2016 and 2020 — enabled AbbVie to spend money on deals, research and development to replace Humira.

Most notably, AbbVie paid $63 billion to acquire Allergan and its blockbuster product Botox, which in 2021 earned almost $5 billion. Other deals have been less successful, such as the $5.8 billion takeout of Stemcentrx for an experimental lung cancer drug that ultimately failed.

Humira's extended patent protection also gave AbbVie time to launch two new immune disease drugs, Skyrizi and Rinvoq, which it believes will make up for lost Humira revenue.

Company executives now claim the hit to AbbVie's balance sheet will be short-lived.

"Following the U.S. Humira [biosimilar entry] in 2023, we expect to quickly return to growth in 2024 and deliver a high single-digit growth from 2025 to the end of the decade," CEO Richard Gonzalez said on a company earnings call in February 2022. That outlook has shifted somewhat since, as Gonzalez told investors in January that 2023 should represent a “floor” for revenue, with a “path to strong sales growth in 2025." 

Negotiating tactics

The entry of Humira biosimilars will be gradual in 2023, with just one from Amgen on the market until mid-year, when five more will launch. This raises questions about whether enough drugmakers will have signed big enough contracts with insurers to influence the market by next year.

While AbbVie will primarily be negotiating against Amgen for 2023, the situation will shift for 2024 contracting when more biosimilar makers will have their drugs on the market.

Ronny Gal, formerly a Bernstein analyst who covered AbbVie and closely followed the biosimilar market, said last year the drugmaker therefore might be guessing wrong on the impact of biosimilars.

"I think the odds are that the erosion will be slower in 2023 and faster in 2024," he said. Gal is now an executive at Novartis.

AbbVie may have some say in the matter, depending on the negotiating tactics it chooses to use in its efforts to keep Humira the preferred treatment choice on insurer formularies in 2023.

Drugmaker tactics in these negotiations can be aggressive and, in at least one case, allegedly anticompetitive. In a 2017 lawsuit, Pfizer accused Johnson & Johnson of using exclusionary contracts and threats to withhold rebates if insurers made Pfizer's biosimilar of J&J's drug Remicade a "preferred" option. The two companies later agreed to have the suit dismissed.

As Remicade is administered at hospitals and other healthcare facilities, J&J had more leverage in retaining market share. For example, Pfizer claimed those facilities had no incentive to purchase its biosimilar if insurers wouldn't reimburse them.

By contrast, pharmacists can provide Humira to patients directly, potentially giving biosimilar makers more opportunities to make inroads. Gal says that rather than threaten to cut rebates if Humira isn't preferred, AbbVie "will use Humira discounts to protect Skyrizi and Rinvoq," its two newer drugs that are approved to treat some of the same conditions.

Nonetheless, biosimilar makers are anticipating that AbbVie won't give up easily. "Our expectation is that AbbVie will be very aggressive in protecting its product," Organon's Azzinaro said.

Price won't be the only factor. AbbVie's experience in navigating the immune drug market will give it advantages as well.

One tool AbbVie has on its side is its patient support program known as Humira Complete, which includes assistance such as nurse advocates, help with insurance and injection training. This assistance has been controversial at times and was cited in a 2018 lawsuit by the California insurance commissioner.

"Humira to my mind has never been just a drug," said A. Mark Fendrick, director of the University of Michigan's Center for Value-Based Insurance Design, who has consulted for AbbVie. "With Humira and Humira Complete, you have high utilization of a high-priced drug. With biosimilars, you might have low utilization of a lower-priced drug."

"I want to see the biosimilars have the exact same thing: not just a Humira biosimilar but a Humira biosimilar plus," he added.

But it's unclear how helpful such programs are and how much insurers might value them in weighing coverage.

"If there is actually evidence that these efforts improve real-world adherence that would lead to better clinical outcomes, there would be data," said Steve Pearson, president of the Institute for Clinical and Economic Research, a nonprofit organization that evaluates the cost-effectiveness of drugs and other medical interventions. "We have yet to be presented with actual data on it."

Pharmacy swap

Complicating forecasting of Humira's diminution are the different labels biosimilars can carry as well as the differences in device and formulation for the most popular form of Humira.

For example, some of the later biosimilar entrants will have an "interchangeable label" from the Food and Drug Administration, allowing pharmacists to choose the biosimilar over Humira when filling prescriptions, rather than requiring the prescribing doctor to specify one.

Amgen's biosimilar isn't approved as an interchangeable — at least not yet — nor does it come in the most-used Humira formulation. The first interchangeable biosimilars, from Boehringer Ingelheim and Alvotech, will premier July 1, 2023, with more expected in 2024. Of those first two, only Alvotech, which is still awaiting FDA approval for its biosimilar, would come in that more popular formulation.

How interchangeable Humira biosimilars perform versus other biosimilars should reveal how important that designation is to insurers. The designation was created by the legislation that authorized the FDA's biosimilar regulations, and doesn't exist in the European market.

"It's really important to know what interchangeability is and is not," said Steven Selde, director of the Biosimilars Council at the Association for Accessible Medicines. "It's not an indication of superior quality. It's just a regulatory designation. It's expensive to pursue the interchangeable designation, and it's unclear how many will incorporate it into their business model."

So far, the looming loss of Humira doesn't seem to be bothering AbbVie executives much. They talk confidently of Skyrizi and Rinvoq earning a combined $17.5 billion in sales by 2025, up from $4.6 billion in 2020, and forecast that top sales of the two products combined will exceed Humira's $20 billion peak.