Humira Biosimilar Price War Update: Should We Be Glad that CVS Health and Express Scripts Are Using Private Label Products to Pop the Gross-to-Net Bubble?

The Humira biosimilar market just took another step forward—but remains far from its ideal state.

Last week, Cigna’s Express Scripts announced that it that will follow CVS Health’s CVS Caremark business and remove Humira from its largest commercial formulary in favor of multiple biosimilars.

Below, we review the 20 products competing with Humira—including four private-label products marketed by in-house subsidiaries owned by CVS Health and Cigna.

As you will see below, CVS Health’s formulary actions led to rapid uptake of a low-list-price biosimilar. Express Scripts’ 2025 strategy will also drive biosimilar adoption, although its pricing strategy is more problematic.

But what’s really going to bake your noodle later: Would the largest PBMs have popped the gross-to-net bubble for Humira if they hadn’t been able to profit from the switch?

THE HUMIRA MOB

There are 10 approved biosimilars of AbbVie’s Humira. The table below summarizes the wholesale acquisition cost (WAC) list prices for the currently marketed biosimilars along with the formulary status with the largest PBMs. As a reminder, the WAC list price does not represent the price paid by any entity within the drug channel, because it excludes rebates and such other reductions as distribution fees, product returns, discounts to hospitals, price reductions from the 340B Drug Pricing Program, and other purchase discounts.

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Observant readers will notice that the table above shows 21 marketed adalimumab products for the Humira reference product and its 10 approved biosimilars. Since I reviewed the market in July 2023, the market has become even more complicated:

• Seven of the biosimilar products have list prices that are equal to or only slightly lower than Humira’s list price.

• Nine have list price discounts that range from -55% to -86% below Humira’s list price.

• Four products—only three of which are biosimilars—are marketed by businesses whose parent companies also own two of the three largest PBMs.

• Five manufacturers—Amgen, Biocon Biologics, Boehringer Ingelheim, Pfizer, and Sandoz—are marketing both high-list and low-list products.

The parent companies of the two largest PBMs have formulary strategies that use vertical integration to commercialize alternatives to Humira:

• Cordavis is a subsidiary of CVS Health, which also operates CVS Caremark. It markets two Humira products: Cordavis Hyrimoz, a low-list-price Humira biosimilar manufactured by Sandoz, and Cordavis Humira, a co-branded biologic supplied by the manufacturer of the reference product (AbbVie). This co-branded product is not a biosimilar, because the manufacturer of the reference product supplies it.

• Quallent Pharmaceuticals is a subsidiary of Cigna’s Evernorth business, which also operates Express Scripts. It markets Humira biosimilars that are manufactured by Boehringer Ingelheim and Alvotech/Teva. Quallent prices both products at a 46% discount to Humira’s list price.

Last year, I speculated on the motivations behind this vertical integration in What’s Behind CVS Health’s Novel Vertical Integration Strategy for Humira Biosimilars.

Some smaller PBMs have embraced the lower WAC Humira biosimilars. For example, SmithRx placed Yusimry on its formulary and is offering the product via Mark Cuban Cost Plus Drug Company at a price below the $995 WAC. Navitus Health Solutions added three low-list-price biosimilars to its formulary: adalimumab-adaz, adalimumab-fkjp, and Hadlima, but also retained the high-list reference product on its formulary. MedImpact's formulary includes Humira, the unbranded adalimumab-adaz from Sandoz, and Teva's low-list-price Simlandi.

THE CVS EFFECT

When the Humira biosimilar price war began in July 2023, I pondered key questions about the market:

• Will high-list/high-rebate products win again?

• Can massive list-price discounts overcome a rebate wall?

By February 2024—one year after the first biosimilar launched—the answers to those questions were a disappointing “Yes” and “No.”

Despite the large number of competitors and some dramatically lower list prices, the Humira biosimilar market got off to a slow start. Few of the PBMs’ plan sponsor clients—employers, health insurance plan, labor union, governments, and other third-party payers—initially adopted low-list-price products.

While plans often complain about PBMs, most plan sponsors seemed to remain addicted to the rebates that PBMs pass along to them. PBMs have their own incentives for preferring higher drug list prices over lower ones. For an in-depth explanation behind these realities, see Chapter 9 of DCI’s Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers.

But thanks to CVS Health, the Humira biosimilar market exploded in April 2024.

That’s when CVS Caremark began excluding Humira from most of its major commercial formularies. Its July 2024 Advanced Control Specialty Formulary now contains three preferred Humira options: Hyrimoz, the high-list-price Humira biosimilar from Sandoz; Hyrimoz, the low-list-price Humira biosimilar from Cordavis; and adalimumab-adaz, the unbranded, low-list-price Humira biosimilar from Sandoz. On its Choice and Standard Opt Out commercial formularies, CVS Caremark offers the co-branded Cordavis Humira.

You can see the impact below courtesy of an analysis by Deutsche Bank’s James Shin, who examined IQVIA’s new prescriptions (NBRx) data. For April 2024, about 60% of all new Humira prescriptions were for the Cordavis product with a list price that's 81% lower than Humira’s list price. By the end of August, this product had more than 12% of the total adalimumab prescriptions.

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The co-branded AbbVie Cordavis product has also gained a meaningful share of new prescriptions and now has 10.6% of total prescriptions. All of the other biosimilars combined have a collective 6.6% of the market. Meanwhile, Humira (original flavor) still retains about 70% of total prescriptions.

CVS Health’s actions have had other ripple effects in the drug channel. For example, McKesson is the primary wholesaler for CVS Health’s Caremark mail and specialty pharmacies. The substitution of the low-list-price biosimilar for the high-list-price reference product was so rapid that it slowed McKesson’s revenue growth for the second calendar quarter of 2024.

EXPRESS SCRIPTS’ MID-LIST-PRICE STRATEGY

Beginning in 2025, Express Scripts will remove the Humira reference product from its formulary. Its 2024 National Preferred Formulary (as of 7/1/24) includes a mix of list price options:

• The high-list- Cyltezo biosimilar and its low-list-price unbranded version (adalimumab-adbm)

• Simlandi, a low-list-price biosimilar

• The low-list unbranded adalimumab-adaz from Sandoz

• The two biosimilars marketed by Quallent Pharmaceuticals, both of which are priced at a 46% discount to Humira’s list price. (Like Bon Jovi, Express Scripts is only halfway there.)

Apparently, the Quallent prescriptions may not be fully reflected in IQVIA data.

I suppose Optum Rx’s new Nuvaila business is now livin’ on a prayer.

TRUST IN MARKETS?

PBMs now pass through most formulary and price protection rebates to plan sponsors. Hence, PBM compensation models have evolved so that the largest PBMs’ profits now derive from revenue sources that may be less transparent to some plan sponsors, including:

• Dispensing spreads at mail and specialty pharmacies

• Participation as contract pharmacies in the 340B Drug Pricing Program

• Copay maximizers

• Markups on nonbiological specialty drugs

• Specialty pharmacy service fees from manufacturers

• Use of discount cards within pharmacy benefits

• Administrative, data, enterprise, and other fees from group purchasing organizations

You can see DCI’s deconstruction of the Big Three PBMs’ profits in Section 11.2.3. of our 2024 pharmacy/PBM report.

We can now add “vertical integration into the marketing of biosimilar and generic drugs” to this list.

How should we think about a PBM having a direct financial interest in the products on its formulary?

Like any antitrust situation, the ultimate outcome will be highly specific to the facts of the case. But the current facts pose an intriguing contrast.

CVS Health seems to exemplify how a PBM's financial interests can align with plan sponsors and patients. It is undeniable that CVS has driven significant adoption of a low-list-price Humira biosimilar. Plan sponsors that were paying higher net (post-rebate) prices for Humira benefited from this move. Patients who were paying coinsurance rates linked to their prescriptions’ list price also saved money. Unfortunately, we don’t know how many of Caremark’s clients remained with a high-list-price product so as to maximize the value of their rebates.

The Express Scripts pricing seems more problematic. Express Scripts’ Quallent biosimilars have WAC list prices of $3,750, which is only 46% below Humira’s list price.

However, Boehringer Ingelheim simultaneously markets one of the Quallent-branded products (adalimumab-adbm) with a low list price of $1,315 (−81% below Humira) as well as a cash price of ($550; −92% below Humira) via GoodRx. Express Scripts' self-congratulatory press release somehow neglected to mention these inconvenient facts.

In a provocative LinkedIn post, attorney William Sarraille likens the Express Scripts situation to the FTC’s long ago antitrust challenge to the Merck-Medco relationship.

To drive biosimilar penetration, plan sponsors need to give up their addiction to rebates and reject the high-list products that inflate the gross-to-net bubble. Until that happens, we may need to accept that PBMs’ private-label strategies are less than ideal, but better than the alternatives.

CORRECTION: An earlier version of this article misstated the cash price of adalimumab-adbm. It also omitted Amgen's high-concentration, non-interchangeable Amjevita, which has a list price of $1,315, and Pfizer's low-list-price Abrilada biosimilar, which has a list price of $1,038. We apologize for the errors.