Episode Details

There are two facets of the Humira biosimilar market and launch that Anna Hyde, my guest in this healthcare podcast, talks about. One is market dynamics. The second is provider and patient confidence. These two concepts are tangled up together and cannot be separated.

But let me back up a sec and explain, although Anna Hyde covers this really well and offers context in the interview that follows.

So, first facet: market dynamics. This means fostering competition so the price of something goes down. That is the basis of capitalism. After all, you need competition to get in there and try to steal customers from each other by scuffling over price. In 2023, there's supposed to be 12 biosimilar products for Humira that come out. So, we'll see scuffling and lower prices?

Hmmm … maybe not so fast.

Second intertwined facet: provider and patient confidence that the biosimilars are as effective and have similar side effects (ie, there is confidence that the biosimilars are actually, for reals, interchangeable with the so-called reference product [ie, Humira]). Bottom line, if providers and patients are not confident in the biosimilar, then no prescribing is gonna happen.

Couple those provider and patient clinical concerns with a concern about manufacturer financial assistance. If providers and patients are worried that the out of pocket will be too high and the biosimilar manufacturers are not gonna offer any financial assistance, then, again, no confidence, no prescribing.

So, if either or both of these concerns is present and the no prescribing is the result, this vote of no confidence means there will be no or limited uptake of the biosimilars.

And what does the no uptake mean? It means no lower prices. Having competition per se isn't gonna lower the prices because the monopoly remains the monopoly. It's having uptake of the competition that will erode the monopoly. It's having patients who are willing to migrate to the competitive products.

And this is pretty vital here because, right now, there's a lot of cynicism out there about this biosimilar launch and that it is not really going to lower the cost of these drugs much for plan sponsors. And, you know, is anyone terribly surprised given it sure seems like AbbVie, who is the manufacturer of Humira, still has a lot of dominance in the market? "How do they still dominate the market even though their patent thicket years are officially over?" you might ask.

For one, they have payers over a barrel because members who need the Humira molecule are still 100% on Humira. Thus, AbbVie can still demand contract terms for Humira like the demand that Humira has the lowest patient out of pocket for patients or has an equivalent out of pocket to any formulary biosimilars. And this is currently going on. (Listen to the show with Dea Belazi [Encore! EP293] for why that matters so much from a market dynamics standpoint.)

A second reason why Humira can still dominate the market even after their patent expiry is that plans and PBMs (pharmacy benefit managers) are, as Chris Sloan put it in episode 216, "addicted to rebates"; and Humira offers big rebates, which they will likely increase to match any pricing pressure from biosimilars.

Here's a quote from the Goodroot

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