AbbVie owns two of the best-selling drugs in the world in Humira and Imbruvica. But to build and defend its market monopoly for the two heavyweights, the company has repeatedly raised prices and exploited the U.S. patent system, a congressional probe found.
In the 48-page report released ahead of AbbVie CEO Richard Gonzalez’s appearance on Capitol Hill on Tuesday, the House Committee on Oversight and Reform found that Humira is the nation’s top-selling drug “due in large part to AbbVie’s price increases.” Those costs have “placed significant strain on U.S. patients and their families” who have been left with greater out-of-pocket expenses.
The report, based on more than 170,000 pages of AbbVie internal documents dating back to 2009, comes after the committee tried, repeatedly, to obtain marketing information from the drugmaker. Lawmakers ultimately threatened the company with a subpoena in September.
When Humira launched in 2003 under its former maker, Abbott Laboratories, the drug carried a list price of $522 per 40-milligram syringe. Abbott then raised the med’s price 13 times to $1,024 per syringe up until 2013, when AbbVie spun out into a separate company. After that, AbbVie raised Humira’s price an additional 14 times.
The blockbuster rheumatoid arthritis drug now costs $2,984 per syringe—a 470% increase from when the drug entered the market. The company collected $16.1 billion in net U.S. revenue from Humira in 2020, continuing a streak of annual increases since the drug first entered the market, according to the report.
AbbVie’s biggest customer? The U.S. The U.S. is unable to negotiate directly with companies for lower prices for Medicare beneficiaries, making American taxpayers a cash cow for the drugmaker, the committee said.
A 2015 internal presentation from the company showed that, at the time, the U.S. paid more than $760 more per syringe for Humira compared with the next highest payer. In some instances, Humira’s cost “skyrocketed” in the U.S. while they fell abroad.
Meanwhile, the price of AbbVie’s cancer heavyweight Imbruvica was also on the upswing. The Chicago-based drugmaker has lifted Imbruvica’s price 82% since its launch in 2013, up to $181,529 per year for a patient taking three pills per day, the report found. Similarly to Humira, the U.S. paid up to double for Imbruvica compared to other countries in 2018, the report said.
Most of those increases were aimed at reaching revenue targets, which led to big payouts for AbbVie’s top executives, according to the probe. From 2015 to 2018, AbbVie tied executive bonuses directly to Humira’s net revenue, which provided “a clear incentive to raise U.S. prices.” In fact, during AbbVie’s first year under the plan, the company raised the drug’s price by 9.9% in 2015, marking “the largest-ever price increase for the drug.”
AbbVie is no stranger to criticism when it comes to Humira’s price tag. The company has been hit with lawsuits over its pricing of the drug and the “patent wall” it has built up to defend the med from competition. A judge last year confirmed that the strategy was legal, but at least one analyst branded the tactic “problematic.”
As recently as April, Gonzalez has defended the way AbbVie competes in the market for Humira, arguing that the drugmaker’s behavior has been “absolutely pro competitive.” The company was not immediately available for Fierce Pharma’s request for inquiry regarding Tuesday’s report.
However, according to the congressional inquiry, the company abused the U.S. patent system to block biosimilar competition for its top-selling Humira, including its settlements with competitors to delay their entry into the market until 2023.
Years back, though, AbbVie predicted up to five biosimilar competitors would enter the market by the first quarter of 2017 after Humira’s active ingredient patent expired in 2016, the committee said, citing internal presentations. Another document sent to Gonzalez in 2014 warned that the biosim competition would cause “Price Erosion” and “Volume Erosion” for Humira sales.
In response, AbbVie built a war chest of patents to protect Humira’s dominance, the committee found. The company now owns 257 Humira-related patents, the last of which is set to expire in 2037. Nearly half of those patents are from 2014 onward, indicating that “most of these patents were not necessary to incentivize the company’s development of the drug.”
The company followed the same strategy for Imbruvica by obtaining or filing for over 150 additional patents to delay generic competition until 2036, the probe found.
AbbVie’s strategy “is particularly abusive because it seeks to overwhelm potential competitors with the sheer number of patents on Humira regardless of whether individual patents were properly granted under U.S. law,” the committee argued.
With its patent wall, AbbVie has been able to delay competition through settlements with numerous competitors. Biosims have already launched in Europe, and several have been approved by the U.S. FDA.
The committee questioned whether these settlements were “truly negotiated compromises reflecting the odds of the parties’ success in patent litigation” or whether AbbVie tempted the companies, in violation of antitrust laws, to stay off the market in exchange for “transferred items of value.”