Humira, a monoclonal antibody used to treat arthritis among other conditions, is the most lucrative drug in history. Since entering the market in 2003, it has made its manufacturer an estimated $200 billion in revenue. Its sales of about $21 billion globally in 2021 are second only to Pfizer and Moderna’s covid vaccines.
A not-insignificant part of Humira’s financial success is due to the fact that it enjoys a monopoly in the US. This has allowed its maker, AbbVie, to name its price for the drug, which is prescribed to more than 300,000 patients in the US and about 1 million globally. In 2021, AbbVie increased its price for Humira by almost 10%. The medication was flagged by the Institute for Clinical and Economic Review as one of six drugs with price increases lacking justification.
But AbbVie’s lock on the market is about to end, at least on paper. Starting in January 2023, several drugs containing adalimumab, the non-brand name for Humira’s active component, will enter the market and be available at a lower price than Humira’s $72,000 or more a year.
Yet it’s hard to tell how quickly these drugs, called biosimilars, will be able to make a dent in the market—not least because AbbVie, which relies on Humira for almost 40% of its total revenue, has been extremely strategic in manipulating legal advantages and marketing strategies to keep the competition out.
Humira is administered by injection.
Like other biologics, Humira is a complex drug to make. The medication, which is administered by injection, uses a synthetic antibody that binds with a specific protein in the body, reducing the inflammatory response.
When AbbVie launched Humira, there were other drugs available to treat some or all of the conditions for which it is prescribed, in particular Remicade (infliximab, made by Janssen) and Enbrel (etanercept, made by Amgen). But Humira grew steadily, starting with rheumatoid arthritis, and adding year after year to the list of conditions it can be prescribed for. It is currently indicated to treat over a dozen ailments.
Biologics, which are derived from living cells, are costlier to make than chemically synthesized, small-molecule drugs. So most of the companies that jumped in to develop biosimilars (essentially, biologic generics) for adalimumab were established pharmaceutical players such as Pfizer, Mylan, Boehringer Ingelheim, and Amgen.
These companies were able to market their products in Europe beginning in 2018, when the patent for Humira expired. Within roughly two years, they absorbed around 35% of Humira’s European market. Humira was already priced much lower there than in the US before the competition entered—it could be purchased in the Netherlands and UK, for example, for less than a quarter of the US price. But the arrival of competitors further reduced the cost of treatment, as the new biosimilars were priced as much as 40% below Humira.
In the US, the principal patent had actually expired earlier, in 2016. Yet AbbVie was able to maintain its dominance there by exploiting a uniquely American trick: the patent thicket.
The image says it all: A patent thicket is a dense system of overlapping patents that are linked to one product. In the pharmaceutical industry, companies use them to prevent others from making comparable drugs the moment the main ingredient no longer falls under its 20-year patent protection.
Earlier this year, the Initiative for Medicines, Access & Knowledge (I-MAK), a medicine access advocacy group, found that AbbVie had applied for 312 patents for Humira, with the aim of blocking competition for up to 39 years. It was granted 166 of them.
Under US patent law, it is possible to file for what is known as a “continuation” on an existing patent, to cover even slight modifications of the original formula, of the potency, or new applications. This creates families of patents built around a core feature, which end up adding years to the original patent timeline.
Because of continuation, as well as a lower barrier to what is considered an innovation worth patenting, there are on average four times as many patents associated with drugs in the US than there are in Europe. In the case of Humira, it’s 6.4 times as many.
I-MAK found that nearly 90% of the patents associated with Humira were filed after the US Food and Drugs Administration (FDA) had approved the drug—when it was safer for the company to test slight modifications, file for a new patent, and extend the duration of the protection.
Through thickets, companies like AbbVie fundamentally make it impossible for competitors to enter the market, because in order to do so , the upstarts would have to litigate a large number of patents associated with the products, which could be expensive and time consuming. That’s why 11 pharmaceutical companies, most of them major, decided to settle with AbbVie and agree to launch their products starting in January 2023, rather than pushing into the market earlier and paying royalties for the patents they didn’t settle on.
“It’s a case where the patent system has gone completely wrong,” says Tahir Amin, founder and executive director of I-MAK. Rather than being used for their original purpose—to protect the revenue from intellectual property in order to foster innovation—patent thickets get the opposite effect. They stall innovation, by dissuading potential competition from even trying to enter the market.
But a case questioning Humira’s patent thickets as an alleged violation of antitrust law ended with a federal appeals court in Chicago upholding the patents as valid, irrespective of their impact on competition.
Through patent thicketing and subsequent settlements, AbbVie was able to extend its monopoly by about seven years, during which it generated $87 billion of its cumulative $128 billion in sales in the US since 2003.
So now that at least 10 competitors are about to enter the US market in 2023, is Humira’s reign over? Not yet.
That’s because AbbVie did something else that protected its market position, this time by way of drug development and marketing. In 2016, the company launched a new formulation of Humira: high-concentration, and citrate-free. It was less painful to inject and worked as well as the original formulation—so much so that all of Humira available on the market was replaced with it.
But although the new formulation had been approved in the US in 2015, AbbVie didn’t bring it to the market until 2018, by which time most of Humira’s biosimilars—made to compete with the original formulation—had already been approved by the FDA. Therefore, many of the biosimilars set to enter the market are already somewhat obsolete, as the newer Humira formulation makes up a growing share of the market.
AbbVie, which was questioned about this timing during a congressional hearing (pdf, p. 56) in May 2021, maintained its timing was due not to anticompetitive intentions, but to the fact that the new formulation required different manufacturing capacity. Yet AbbVie was able to introduce it rapidly in Europe, without manufacturing delays. When pressed on that in the hearing, AbbVie CEO Richarg Gonzalez evaded the question of whether there truly was a manufacturing shortage.
AbbVie documents reviewed by the congressional committee showed that, as early as 2011, the marketing of a high-concentration formula was described as a “biosimilar defense,” something that the committee took to mean as introducing the higher formulation with the specific goal of delaying biosimilar competition. And in a 2015 investor presentation, the company noted that challenging any of Humira’s patents in litigation would take four to five years.
The biosimilars that are soon to be available have different competitive strengths. Amgen’s Amjevita, for example, will have the advantage of entering the market on Jan. 31, 2023, six months before any other competitor. It is made only with the original formulation.
Cyltezo, made by Boehringer Ingelheim, is the only biosimilar that has so far received the FDA designation of being interchangeable with Humira, meaning that unlike other biosimilars, it can be used to fill a prescription for Humira. But unlike Humira, it can’t be self-injected, and it, too, is only approved for the original formulation.
Samsung Bioepis-made Hadlima is the only one so far to be approved with the high-concentration, citrate-free formulation. But while an interchangeability study has been undertaken, the results won’t be available before 2024, meaning it likely couldn’t obtain interchangeability approval until 2025 at the earliest.
Icelandic drugmaker Alvotech, which settled with AbbVie earlier this year and is supposed to enter the market on July 1, 2023, began making its biosimilar after the new concentration was on the market. Therefore, it was able to conduct the testing to apply for both biosimilar and interchangeability approval in the US—which it got in Canada and Europe. Yet so far, it has received neither approval in the US: The FDA required the company to correct certain issues with its manufacturing plant in Reykjavik in order to comply with its standards.
As it stands, come 2023 the US market will not have a biosimilar interchangeable with AbbVie’s high-concentration, citrate-free Humira.
Eventually, biosimilars are expected to cause a drop in Humira’s revenue, though probably not as quickly as what happened in Europe, where AbbVie lost close to 40% of the market within the first year of the biosimilars’ launch. The US landscape—unique in its pricing opaqueness, its lack of a single-payer health system, and its ubiquitous advertising for medicines in magazines and on TV—makes it tough for anyone to confidently predict what will happen in the next year.
Much will be in the hands of pharmaceutical benefit managers, the middlemen who negotiate the price of drugs on behalf of insurance companies, and decide which versions of a drug to make available. They could save a lot of money buying biosimilars instead of Humira, or through the discounts AbbVie might give them to continue covering their drug, and only pass a portion of those savings to insurance and patients.
While some prescribers and patients will likely make the switch to another product, others will avoid the biosimilars, and continue to pay for Humira. Those who won’t have this option—for instance, because their insurance plan only covers less expensive biosimilars—might have to adjust to a different formulation.
On Dec. 13, a group of shareholders in nine major pharmaceutical companies submitted requests for them to develop patent strategies that don’t limit drug access for patients, as many do now. AbbVie is one of the target companies. The request argues that “AbbVie’s current approach subjects the company to reputational risks and to further regulatory blowback.”
AbbVie did not reply to Quartz’s request for a comment on this and declined to respond to our questions about its pricing and patenting of Humira.
In the past several years, multiple bills have been introduced in US Congress to address pharmaceutical companies’ alleged misuse of patent laws, which makes drugs unnecessarily expensive and makes it harder for patients to access them. But legislation to close the patent-thicket loopholes has yet to pass.
There are two other types of reforms that could help create an environment less susceptible to exploitation by patent-hungry pharmaceutical companies. The first is better scrutiny of patent applications.
“The US PTO [Patent and Trademark Office] is part of the problem,” says I-Mak’s Amin. The bar for what counts as an invention is too low, he argues, allowing companies to make tiny tweaks to an existing product and patent it as if it was a whole new one.
Changes also could be made to the way patents are litigated. Presently, each patent is treated independently, even if it is the continuation of an older one. Instead, patents could be challenged in families. Humira, for instance, has about 15 families of patents. If one of the patents is successfully disputed, perhaps the others in the family (which are fundamentally the same, barring some small tweak) should no longer stand either.
That way, the manufacturer could still seek all the patent protections it desires, without scaring challengers away with the sheer number of patents to settle.