The Dutch non-profit taking on AbbVie for ‘overpricing' Humira by $1.3bn

Big pharma is no stranger to controversy, and AbbVie is perhaps one of the most lambasted.

Much criticism has been levelled against the firm for what is deemed to be an aggressive global patent strategy regarding its blockbuster drug Humira.

Humira is the brand name of the original adalimumab, an anti-inflammatory drug used to treat eleven conditions, including arthritis, psoriasis, Crohn's Disease and Spondylitis.

It is the most successful, lucrative medicine on record, bringing global revenue of more than $21 billion between 2011 and 2022 for AbbVie, according to Statista. But controversy over the drug’s pricing is no secret.

In the Netherlands, a Dutch non-profit has taken AbbVie to court over alleged excessive pricing of Humira. The Pharmaceutical Accountability Foundation (PAF), known in Dutch as Stichting Farma ter Verantwoording (FtV), issued a subpoena on February 21.

PAF accuses AbbVie of overcharging the Dutch healthcare system by up to  €1.2 billion ($1.27 billion), by abusing its monopoly position in the market to keep prices and profits high.

The organisation claims that AbbVie sold €2.3 billion-worth of Humira in the Netherlands during its market monopoly between 2004 and 2018.

“By making excessive profits (amounting to €68 per Dutch citizen), AbbVie has displaced other healthcare, and thus damaged the health of Dutch citizens,” said Wilbert Bannenberg, PAF managing director and chairperson.

“Health economists have calculated that AbbVie’s excessive profit could have ensured up to 16,300 extra years of healthy life for Dutch citizens,” he added. “No doctor wants to be forced to prioritise one patient/treatment over another due to limited budgets.”

Ultimately, PAF says that its litigation against AbbVie “concerns the fundamental question to what extent pharmaceutical companies like AbbVie are free to set and maintain the prices of the drugs they offer”, and that, if successful, “could establish that there are limits to be respected under written or unwritten law, and that these limits can be enforced when they are exceeded”.

“If the action against AbbVie succeeds on human rights grounds,” it adds, “it could also become a model for holding pharmaceutical companies accountable in other jurisdictions.”

In response to the allegations, AbbVie said in a statement emailed to LSIPR: “AbbVie acts in accordance with all applicable laws and regulations.

“We firmly reject the allegations by the Dutch Pharmaceutical Accountability Foundation, which are without merit, and remain fully committed to the patients and the societal needs we serve.”

LSIPR asked PAF to explain its position.

What support has PAF received for this case so far, and from where?

PAF benefits from various kinds of support, including from experts in relevant fields of medicine, public health, and law who reviewed our work and provided feedback. Post the launch, we have received a lot of positive public feedback from both health and legal professionals and members of the public signing on to our open letter of support.

PAF has received general funding from Unitaid, the Dutch National Postcode Lottery, the Open Society Foundation, non-profit foundations and individual donors. We post our financial statements on our website as part of our annual report, and we also post them on  anbi.nl, a portal for Dutch non-governmental organisations.

You say that limits exist, either in written or unwritten law, and have been crossed by AbbVie. What drug pricing limits should be placed on pharmaceutical companies, and what are the implications for poorer countries without such laws or limits?

This case is being brought in the Netherlands, under Dutch law. The legal basis is given in the subpoena and includes Dutch tort law, competition law and human rights.

Companies are free to set prices for their monopoly products. But these prices should be reasonable and ‘fair’. WHO [the World Health Organization] defines a fair price as “one that is affordable for health systems and patients and that at the same time provides sufficient market incentive for industry to invest in innovation and the production of medicines.”

In the Netherlands, the health minister's letter of February 12, 2021, on medicines policy articulates the government's policy. The letter states that the price of a medicine is socially acceptable if: (1) the medicine is cost-effective (the health outcomes are proportionate to the additional costs); (2) the price is reasonable and proportionate to the efforts and investments made to arrive at the medicine; and (3) the price provides sufficient room for innovation.

What is the limit for a ‘fair’ price? We have calculated the excessive profit AbbVie charged the health system by subtracting from its total Humira sales: (a) the cost of R&D needed to develop Humira; (b) the cost of manufacturing/marketing Humira; and (c) 25% as a 'fair' profit. Everything above that (the €1.2 billion in the Netherlands, or, using the same method, $110 billion worldwide) we consider excessive. There is an  ongoing effort at the WHO to define what constitutes fair pricing.

Our hope is that, if we succeed in this case, we can demonstrate that when fairness has clearly been exceeded (as it has with Humira) this is legally actionable. Excessive prices place undue burdens on health systems and risk crowding out or displacing other care. Given limited health budgets, limitless cost increases on medicines are unsustainable.

PAF accuses AbbVie of actively preventing other companies from developing generics of Humira. In what way did AbbVie do this, in your view?

It is public knowledge (see US Congressional hearing, House staff report and I-MAK reports) that AbbVie had a clear strategy to delay the introduction of biosimilars (or ‘generic’ biological products) by applying for additional patents, and by putting up late technical barriers, such as changing the dose/strength of the original Humira product, and by changing the inactive substances in Humira.

FtV [PAF] quotes evidence from the US Congressional hearing and House staff report for this strategy in our subpoena.

AbbVie made deals with biosimilar companies allowing them to enter the European market in October 2018, in exchange for AbbVie keeping its monopoly in the US until 2023. As a consequence, prices of Humira are currently 35 times higher in the US ($80,000 per patient per year) than in Europe, where biosimilars have been available since October 2018.

In 2019 the Dutch competition authority, Authority for Consumers and Markets (ACM), launched an investigation into the discounts AbbVie offered hospitals. By the end of 2018, AbbVie had lost its market monopoly because of patent expiry and sought to obstruct market entry by biosimilars through exclusive contracts with hospitals, by which hospitals would only retain discounts if they did not switch any of their patients to a biosimilar.

The investigation was closed in 2020 after AbbVie stated it would no longer force hospitals to purchase exclusively from AbbVie.

PAF seeks to “establish wrongfulness in the so-called patent period”. Can you explain more about this? What is it about the patent system that you believe allowed AbbVie to abuse it? Does the patent system in general need to change?

FtV [PAF] calculated the excess profits AbbVie made during the 15-year market monopoly period in the Netherlands (2004-2018). The alleged wrongdoings of AbbVie are stated in the subpoena. AbbVie in our view misused the monopoly to make excessive profits, which displaced healthcare in the Netherlands.

Patents are a social policy tool to create benefits for society by granting monopoly rights for certain periods of time to allow innovators to recoup their investment. Patents, however, are not a licence to ‘print money’ and if the patent holder abuses the right for example by asking excessive pricing we believe authorities need to intervene.

What other legal action has PAF taken against drug manufacturers?

[The action against AbbVie] is PAF’s second case against a drug manufacturer for excessive pricing. Our first concerned a company called Leadiant, which markets a drug called chenodeoxycholic acid (CDCA).

CDCA was originally sold to treat gallstones. But after it was found to also be effective against a rare genetic disease, Leadient acquired the rights to it, registered it as an orphan medicine, and promptly hiked the price from €0.28 per pill to €140 per pill, taking yearly treatment from €308 per patient to €153,300.

PAF found this to be in violation of Dutch competition law, and in July 2021 the ACM agreed with PAF and levied a €19.6 million fine at Leadiant for abusing its market position to charge an excessive price. Since then, follow-on actions have been brought against Leadient in Belgium, Italy, Spain and Israel.

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