By Ben Hirschler and Michael Erman
LONDON/NEW YORK (Reuters) - U.S. drugmaker AbbVie ABBV.N faces a crunch moment in Europe in mid-October when less-expensive copies of its $18-billion-a-year biologic drug Humira – the world's best-selling prescription medicine – hit the market.
With vast sums at stake, European healthcare administrators say they will waste no time in exploiting the situation to drive down drug bills.
"The opportunity is too big miss," said Jatinder Harchowal, one of the coordinators of Britain's push for greater use of cheaper biotech drug copies, known as biosimilars, and chief pharmacist at the Royal Marsden hospital.
"People are very much gearing up ... I think you'll find we are really well prepared for this," he told Reuters.
Humira, used to treat rheumatoid arthritis, Crohn's disease, ulcerative colitis and psoriasis, is not only a major cost-saving opportunity for healthcare services, it is also the number one target for companies manufacturing biosimilars, who hope to make a tidy profit selling their products.
Four rival companies are planning to launch Humira biosimilars and the pace of sales will be tracked closely by the wider biotechnology industry, which faces a growing copycat threat.
Because injectable biologics are made in living cells, they cannot be exact replicas of the original medicine. This makes their adoption by doctors far less certain than with generic forms of traditional "white pills" made from simple chemicals.
The conventional wisdom has been that biosimilar uptake would be slow and price discounts modest, since these products are expensive to develop and doctors may be wary about using a medicine that isn't identical to the original.
But Europe's recent experience with the first wave of biosimilar antibody drugs - the biggest section of the biologic market - has upended expectations, suggesting AbbVie won't have an easy ride.
AbbVie executives have forecast Humira sales in Europe will drop around 18 to 20 percent by the end of next year, a more moderate decline than some predecessors have faced.
Indeed, the speed at which copies of Remicade and Enbrel - two rivals to Humira from Merck MRK.N and Pfizer PFE.N - have been adopted in Europe in the last three years has surprised many experts.
Roche's ROG.S Rituxan/MabThera for blood cancer has also seen rapid sales erosion due to biosimilars.
The new competitors to Humira now see an even bigger opportunity, and the arrival of competing biosimilars from Amgen AMGN.O, Novartis's NOVN.S generics wing Sandoz, South Korea's Samsung Bioepis and Germany's Boehringer Ingelheim marks an unprecedented level of rivalry.
"We're expecting there'll be good competition," Chad Pettit, head of value and access for biosimilars at Amgen, said in an interview.
He declined to go into details on pricing but said discounts for biosimilar Humira were likely to be "in the range" of other biologic drug copies already launched in Europe.
While the level of biosimilar discounts varies from country to country, Merck said they were averaging around 45 percent across Europe in the case of Remicade, one year after launch.
Britain's Harchowal put current discounts across different biosimilars at 45 to 60 percent.
In the case of Humira, officials within Germany's health insurance system believe the record field of contestants will add to the momentum to use the cheaper copies.
Still, analysts following AbbVie don't expect global Humira sales to fall off a cliff just yet. In fact, revenue from the blockbuster is expected to keep climbing, driven by continuing strong U.S. demand, until U.S. biosimilars arrive in 2023.
Global Humira sales totalled $18.4 billion (14.27 billion pounds) last year, with non-U.S. sales contributing $6 billion.
And while the threat to Humira in Europe is real and imminent, there are factors that could make things somewhat different to the experience with Remicade, Enbrel and Rituxan.
For one thing, AbbVie's reliance on its top-seller - Humira accounted for 65 percent of 2017 revenue - means it has invested heavily in preparing for this event and CEO Richard Gonzalez said in July he would compete on price "to maintain the vast majority of the line".
AbbVie is also pushing hard to argue that patients who are stable on existing medication should not be switched for non-medical reasons, such as price.
Gonzalez said in January that the company was negotiating directly with hospitals in countries like Spain, Italy and Portugal in order to maintain its volume there.
THIS MIGHT HURT
In addition, AbbVie may try and differentiate its drug from some of the biosimilar injections that contain citrate or citric acid, which can cause pain or stinging.
This is a potential issue for Humira copies from Samsung and Sandoz, but not those from Amgen and Boehringer, which are citrate-free, according to a Reuters review of product details.
"If (AbbVie) has a formulation that has no pain and no sting, they can match price and have an advantage over a biosimilar," said SunTrust Robinson Humphrey analyst John Boris. "That's going to help with the longevity of the franchise."
AbbVie said there was no connection between biosimilar launch timelines and availability of its citrate- free formulation.
Lakshmi Dharmarajan, an analyst at research group GlobalData, said uptake of biosimilar Humira might also be slowed by the fact the drug is usually self-injected at home. That could limit the role of big hospitals in forcing through biosimilar use, she said.
But pharmacist Harchowal is not so sure, pointing to the detailed planning that has gone into homecare arrangements within Britain's National Health Service to maximize use of the best-value form of adalimumab, as Humira is called generically.
In Germany, Europe's biggest market, the decentralized system leaves physicians free to prescribe the brand of adalimumab they deem best. But German doctors are also legally bound to observe cost efficiency and could be challenged if they simply carry on prescribing the original medicine.
Scandinavian countries already have a track record of early biosimilar adoption and have achieved some of the steepest price discounts of up to 70 percent, while France has recently stepped up its goals for their use.
France's 2018−2022 National Health Strategy sets a goal of 80 percent biosimilar penetration by 2022 - a level that Britain has already exceeded for Remicade and Enbrel.
When it comes to Humira, NHS England told administrators earlier this year not to sign any new contracts that extend beyond Oct. 16 – the day AbbVie's primary European patent expires.
Graphic: AbbVie's Humira riding high, for now - https://tmsnrt.rs/2P9p7z8
Graphic: Remicade, Enbrel succumb to European biosimilars - https://tmsnrt.rs/2MvtEhF
(Additional reporting by Ludwig Burger in Frankfurt; Editing by Alexandra Hudson)