Humira: lessons from 20 years of patents, pricing and profits

Biotech multinational AbbVie has long reigned supreme in the biologics marketplace.

But the mastermind of blockbuster drug Humira has come under intense scrutiny of late over its pricing and patent strategies.

Brought to market in 2003, the anti-inflammatory drug has dominated the market for two decades.

That success is owing in part to expanding its reach, going from treating just one condition—rheumatoid arthritis—to eleven, including ulcerative colitis, Crohn's Disease, Spondylitis and psoriasis.

The medicine has made its maker billions of dollars: between 2011 and 2022 it brought more than $21 billion in revenue for AbbVie, according to Statista.

On the flip side, it has been described as “the poster child for many of the biggest concerns with the pharmaceutical industry.”

There are accusations of overpricing, forcing US patients who use Medicare (the government health insurance programme) to turn to cheaper alternatives or go without.

Beyond the US, a Dutch non-profit is taking AbbVie to court in the Netherlands for allegedly abusing its monopoly position to keep prices and profits high, overcharging the Dutch healthcare system by up to €1.2 billion ($1.27 billion).

In response, AbbVie rejected the allegations, adding: “AbbVie acts in accordance with all applicable laws and regulations” and said it remains “fully committed to the patients and the societal needs we serve.”

Then there is the criticism levelled at AbbVie for allegedly creating patent ‘walls’ or ‘thickets’ to block competition from developing Humira biosimilars and violating antitrust laws.

Enter, biosimilars

But now, AbbVie's monopoly on it has finally expired, concluding two decades of patent exclusivity in the US.

The company had delayed an impending, dramatic patent ‘cliff’ back in 2017 by four years, after reaching a settlement with rival Amgen. In that settlement, Amgen agreed to hold off from releasing its biosimilar—until now.

This means that Humira is forced to step aside, and make way for Amgen’s biosimilar, Amjevita. Launched in the US in January, it is set to cost up to 55% less than Humira.

As part of its settlement with AbbVie, Amjevita will enjoy exclusivity as the only Humira biosimilar in the US until other competitors—a total of seven—can join the party in July with their own versions.

As a result, the price of AbbVie’s blockbuster will finally plummet.

A pricing war

Juliana Reed, executive director of the Biosimilars Forum, called this year “a watershed year for biosimilars in the US”.

After Amjevita was launched, she said: “Biosimilars have the potential to save billions of dollars in US healthcare spending, if—and only if—they have equitable access to formularies, allowing free-market competition to lower prescription drug costs.”

The US government is taking action to tackle the issue of overpricing. As part of the Inflation Reduction Act 2022, drug companies will be obliged to pay rebates to Medicare when prescription drug prices increase faster than the rate of inflation for certain drugs.

On March 15, the Biden administration unveiled the 27 prescription drugs whose manufacturers will face such penalties, including Humira.

A blockbuster product

But because Humira treats such a wide range of autoimmune disorders, should that absolve it from its alleged sins?

Tony Fitzpatrick, partner at Duane Morris in Boston, notes that the number of disorders it treats means that its sales are much higher, “so it's truly a blockbuster product, and it's unusual in that sense”.

He also points out that the system for developing new products like this, particularly in the US, is structured to incentivise private companies to invest—both to discover and develop new products, and then try to take those to market by conducting clinical trials and securing regulatory approval.

“Companies have huge R&D programmes that cost a lot of money, so it's a very risky undertaking,” he says, adding that they are looking at thousands of potential compounds and products.

“Maybe one of those, if they're lucky, will be successful.”

As a result, biologic products typically have very high prices, he adds.

“For a biologic product, it wouldn’t be out of the ordinary to have dozens of patents,” explains Fitzpatrick. “Once a company knows that the product is something they want to invest in, they start looking for every possible aspect of the product that they can patent.

“And so the AbbVies of the world would say, ‘we made a huge and very risky investment to develop this product, so we should be able to benefit from our investment and the risks that we took to develop the product’.”

A system ‘gone astray’

But Tahir Amin, founder and executive director of US-based non-profit organisation I-MAK—the Initiative for Medicines, Access and Knowledge, which published its first report on Humira in 2018 as part of its Overpatented, Overpriced series—is sceptical and says the system has “gone astray”.

“Getting a reasonable return on investment for developing genuinely new drugs is acceptable,” he tells LSIPR.

“Gaming the patent system to prolong a monopoly on a drug which has already made reasonable or even considerable profits is not. If anything, it is counter to those who defend the AbbVies of this world and the idea that they spend massive amounts of money.”

He says that most patents are filed after a drug is approved but “they are for trivial changes, which may be useful, but they are not inventive for the purpose of a 20-year patent”.

“These trivial changes don’t require huge investment or resources, and that’s where the system has gone astray.

“These companies have made the patent system into a financial gravy train, while doing the least amount of R&D.

“Those who are defending [companies like AbbVie] either don't understand patents and how they are weaponised, or they are part of the problem of why the system has run amok and [is] harming patients all over the world.”

A healthy balance

But when does healthy competition become abuse of the market, and how much should the government intervene to enable more innovation from smaller players?

“There's a definite tension there,” Fitzpatrick says. “When you have a product like Humira that's making that much money, lots of competitors are going to be incentivised to [compete].

“And the reality is some of that patent litigation over Humira involved not just small players, but some of the very big players. Those companies would have been [highly] incentivised to spend a lot of money to litigate.”

Amin agrees that there are enough incentives in the US, but again suggests the system is broken.

“The pharmaceutical industry currently receives patent protection and separate regulatory market exclusivity from the FDA. This is the same in Europe and a number of other countries,” he says.

“Between getting a patent for the original invention and separate FDA exclusivities, these are ample incentives. Unfortunately, the industry has become spoilt and has found ways to extract longer and longer protection through patent abuse in order to please shareholders.

“Instead of going back to the lab and actually investing in new research and drugs, they have found ways to tweak existing drugs and pass them off as patent-worthy. It requires less investment but they get maximum returns.”

Amin adds: “Companies today are more focused on the financialised aspects of their business, ie maximum profits than actually developing new drugs to treat much-needed conditions.”

Patent thickets

According to I-MAK, AbbVie and its affiliates have been granted 165 patents related to Humira, out of a total of 311 applications. A vast majority of these were filed after Humira came onto the market.

This number has led to accusations of creating patent ‘walls’ or ‘thickets’ and prolonging patents unnecessarily.

But Fitzpatrick makes the point that, from a patent law point of view, biologics are highly complicated, because of the sheer number of patents involved, as opposed to chemical compound products.

Manufacturers are able to patent multiple aspects of the product—not only those that cover the actual product itself, but also the different manufacturing and purification methods, different dosages, methods of use, and so on.

While he concedes that AbbVie’s number of patents for Humira in the US, by normal standards, is high, he insists there’s good reason.

“Given the number of indications it covers, perhaps this shouldn’t be so surprising,” he says.

“Once you start to get into the range of billions of dollars in revenue, then a company has a huge incentive to try to maximise its IP portfolio, and its IP protection.”

Legislative reform

But would this be a defence against strengthening patent law in the US?

Amin, who testified for Congress and the Committee for Oversight and Reform’s investigation into AbbVie’s drug pricing in May 2021, believes not.

He argues that there are “a few areas in US patent law that need to change to prevent or reduce patent thickets”.

“First, the law needs to raise the bar for what is an invention and what is considered novel and non-obvious in order to be granted a patent in the first place,” he says.

“Many of the secondary and tertiary patents that result in evergreening of the original invention and help extend exclusivity are often invalidated when litigated without settlement.

“However, because companies often settle, we don’t see these kinds of decisions enough, else there would be a stronger case for changing patent standards. If we raise the bar for what deserves a patent, we’d reduce a lot of the abuse in the system.

“Second, companies should not be able to seek endless continuation patent applications. At the moment companies can keep re-filing the same application over and over again, breaking an original application into smaller individual parts.

“As a result, one invention can have 10 to 20 related patents in a single family. Each one of these patents has to be litigated even if related and they expire together because of a terminal disclaimer.”

Finally, he believes that continuation applications should be limited to two over a twelve-month period from the date of the original application.

“And if one of the patents in a family of continuation patents that are linked by a terminal disclaimer is invalidated, then they should all fall together rather than having to invalidate each one, which can cost several million dollars and [is] why we see so many settlements.”

Enforcement priorities

But aside from the Inflation Reduction System, which could “change things fairly significantly”, Fitzpatrick doesn’t think there will be much in the way of reform.

“The reality is that the biopharma industry has very powerful lobbying on Capitol Hill, and so I'd be sceptical that there’s going to be any major reform of the patent system, or the antitrust laws for that matter.”

He adds that it partly comes down to enforcement. “The Biden administration is clearly more interested in antitrust enforcement in a different way, albeit not necessarily directed at biopharma companies. It’s more directed at big technology companies, but those laws are there to be used and I guess the question would be whether or not they'll change their enforcement priorities.

“And there is always an interesting dynamic between the patent laws and the antitrust laws.”

Fitzpatrick notes that the incentives are there for all. “You could say that in many ways the US healthcare system is subsidising the development of these products for the world because the prices that are charged here in the US for those products are higher than pretty much anywhere else in the world.

“It's not as though companies can just get a patent wall that doesn't have substance to it. That substance will be tested. The incentives are there for companies to fight those patents, and try to show that they're invalid, or to work around them and not infringe them.

“So is it right? Is it wrong? That's a policy question—I don't know the answer to that. But I can certainly say, from within the system, that the incentives are there for both sides to fight their position.”