Humira biosimilar discounting 'aggressive' as competition enters in Europe
- Discounting on biosimilar versions of AbbVie's best-selling Humira have come in at the high end of the drugmaker's expectations since the European launch of four biologic copies two weeks ago.
- While AbbVie cautioned pricing could still shift in the coming months, biosimilar discounts to brand have ranged between 10% to as high as 80% in some Nordic countries, company CEO Richard Gonzalez said on a third quarter earnings call Friday.
- Yet even biosimilar headwinds couldn't cool AbbVie's confidence in its future prospects. The drugmaker expects double-digit earnings growth to continue in 2019, although it has yet to issue formal guidance for the year.
AbbVie earns the majority of its revenue from Humira in the U.S., where biosimilar copies aren't expected to launch until 2023. Still, international sales of the inflammatory disease drug brought in more than $6 billion last year — a sizable opportunity for which biosimilar makers now aim to compete.
Early signs point to aggressive biosimilar pricing, AbbVie executives said Friday, although the discounting seen to date remains within the range of planning scenarios the company laid out internally.
Discounting is particularly steep in Nordic countries like Norway, which operate on a tender system. There, discounts to branded Humira are as high as 80%.
Still, AbbVie's Gonzalez said "this level of discounting is not a surprise to us in those markets," noting these countries account for between 4% and 5% of overall international Humira revenues.
Analysts and investors are closely watching how biosimilar competition impacts Humira, which is the world's top-selling drug and accounts for more than 60% of AbbVie's sales.
Gonzalez cautioned that pricing has not fully stabilized, particularly in about a third of European countries where prices are still being negotiated. And, interestingly, AbbVie also appears to be responding with discounting of its own to help protect its market share.
But it doesn't appear that the entry of copycat rivals will overly crimp AbbVie earnings in 2019, which the company expects to grow by double digits.
Sales of Humira totaled $5.1 billion during the third quarter, up 9% from the same period a year ago. Overall company revenues, meanwhile, reached $8.24 billion in the three months from July to September.
In the U.S., AbbVie remains confident that its patent position will hold off competition until 2023. Already, AbbVie has reached settlement deals with all four companies that have now launched in Europe. The one holdout with an approved Humira biosimilar is Boehringer Ingelheim, which remains locked in a legal battle with AbbVie.
Yet there, too, AbbVie expects to win out.
"We have had very sophisticated companies that have made a decision based on our IP to do a settlement with us," Gonzalez said. "I think that speaks for itself."
Boehringer's biosimilar version of Humira is approved in both the U.S. and Europe, but the German company won't launch the drug in Europe due to its ongoing patent litigation.
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