Blue Shield of California is shaking up the pharmacy landscape with a landmark deal to drastically reduce the price of a biosimilar alternative to AbbVie Inc.'s (NYSE:ABBV) Humira, one of the world's most expensive and widely used drugs.
Humira, approved by the FDA in 2002, has long dominated the market, treating conditions like arthritis and Crohn's disease.
Also Read: AbbVie's Arthritis Drug Humira Retains Market Dominance Despite Biosimilar Competition, Challenges Biosimilar Industry Viability.
However, it has faced criticism for its high pricing and extended market exclusivity, which ended in January 2023.
Blue Shield, which processes around 40,000 Humira prescriptions annually, spends more on the drug than any other medication for its members, making this price-cutting move both timely and essential for addressing the rising cost of healthcare.
The nonprofit health plan announced that it would purchase Fresenius Kabi's FDA-approved biosimilar adalimumab-aacf at a net price of $525 per monthly dose, a significant reduction from Humira's market-reported price of $2,100.
The deal, facilitated by Evio Pharmacy Solutions, aims to eliminate excessive markups typically imposed by pharmacy benefit managers (PBMs) in the current drug supply chain.
The new pricing model is part of Blue Shield's Pharmacy Care Reimagined initiative, which rethinks traditional PBM structures to ensure more transparent and affordable pricing.
The aligned incentives and simplified supply chain have enabled Blue Shield to provide Fresenius Kabi's biosimilar to its members. Starting in January 2025, most commercial members are expected to pay $0 out of pocket.
This move sets a critical precedent as the pharmaceutical industry approaches a "biosimilar cliff," with more low-cost alternatives entering the market.
Last month, UnitedHealth Group Inc. (NYSE:UNH) said it would remove Humira from some of its preferred reimbursement lists starting January 1, 2025. The company will recommend lower-cost biosimilar versions instead.
Price Action: ABBV stock is down 0.45% at $195.93 at the last check on Thursday.
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