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Home>AbbVie, Amgen Reach Settlement in Humira Patent Dispute -- Update

AbbVie, Amgen Reach Settlement in Humira Patent Dispute -- Update

AbbVie, Amgen Reach Settlement in Humira Patent Dispute -- Update

09/29/2017

 By Peter Loftus 

Drugmakers AbbVie Inc. and Amgen Inc. reached a patent-dispute settlement requiring Amgen to wait until 2023 to start selling a lower-price copy of the world's top-selling drug, AbbVie's arthritis treatment Humira, in the U.S.

The deal could give AbbVie an unusually long 20-year U.S. monopoly on sales of the expensive biotech drug that went on sale in early 2003, assuming no other rivals manage to bring copies to market before 2023. Humira costs more than $57,000 annually a patient and had U.S. and global sales last year of $10.4 billion and $16 billion, respectively.

The deal suggests that the industry's longstanding strategy of using patents to ward off cheaper competition for brand-name drugs is extending into the era of "biosimilars," the industry name for copies of biotech drugs, which are proteins secreted by genetically modified cells. Such drugs are newer to the market and harder to copy than traditional chemical pills.

Companies have long acquired additional patents that expire years after a drug's original patent to extend market exclusivity for traditional pills or solutions, such as Pfizer Inc.'s erectile-dysfunction drug Viagra and Eli Lilly & Co.'s cancer drug Alimta. Because they are a newer phenomenon, biotech drugs haven't faced copycat competition in the U.S. until recent years. A 2010 law cleared a path for regulators to start approving biosimilars; the first one was approved in the U.S. in 2015.

AbbVie secured more than 100 patents to protect its sales of Humira, a biotech drug originally approved for U.S. sale in 2002. It treats a range of conditions including rheumatoid arthritis and gut disorders. The initial U.S. patent for Humira expired in December 2016, but the additional patents, which cover things such as manufacturing methods and the drug's formulation, expire in the 2020s.

Drug companies often challenge the validity of patents held by rivals, and the disputes end up in court. Sometimes the court cases result in settlements that allow a copycat version of a drug to enter the market before the last patents expire. The Federal Trade Commission and purchasers of drugs have criticized some settlements as being anticompetitive by delaying generic launches, particularly if the maker of the brand name drug agrees to pay money to the generic challenger as part of the settlement.

AbbVie said Amgen will pay royalties under the agreement; the companies declined to disclose additional financial terms. AbbVie shares rose 5.7%, to $89.54, on Thursday.

The companies' dispute began when Amgen received Food and Drug Administration approval to start selling a copy of Humira in the U.S. in September 2016. AbbVie sued Amgen in federal court in Delaware, seeking to block the copy and alleging it violated many AbbVie patents. Amgen didn't start selling the copy because of the patent litigation. Amgen previously tried to invalidate some Humira patents in a challenge filed with an arm of the U.S. Patent and Trademark Office, but failed.

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