AbbVie Illegally Schemed To Boost Humira Price, Lawsuit Alleges

NORTH CHICAGO, IL — A federal lawsuit accuses pharmaceutical company AbbVie of engaging in a fraudulent scheme to artificially inflate the cost of its best best-selling drug Humira.

Filed Tuesday in Chicago, the complaint seeks class action certification for a nationwide class of patients prescribed Humira, which is used to treat arthritis and other inflammatory conditions.

According to the suit, AbbVie has worked with the nation's largest pharmacy benefit managers to "widen a secret spread" between the list or "sticker" prices — "called by one court the 'sucker price'" — and a far lower price secretly offered to the benefit managers, who get to keep a percentage of the list price and some of the rebates.

Edward Camargo is the suit's named plaintiff. He started taking the drug when he was 19 to treat psoriasis and psoriatic arthritis. But at age 26, his health insurance refused to pay for the drug's $77,000-a-year cost when he switched off a parent's plan.

AbbVie generated $16 billion in net revenue from U.S. sales of Humira in 2020 alone, with senior executives bonuses personally profiting from the price hikes, according to the complaint.

A congressional investigation cited by the suit found AbbVie increased the price of Humira 27 times since it was introduced, amounting to a 470 percent increase since 2003.

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"Pharmaceutical companies cite the cost of manufacturing and other commercial expenses to justify their pricing practices. The House Committee found that, however, internal data obtained by the Committee reveal that manufacturing costs for some companies rose at a significantly slower rate than the companies’ price increases for the drugs," according to the 103-page complaint.

"In some instances, manufacturing costs even declined over the period for which the companies provided data. For all of the companies, manufacturing costs for their drugs were dwarfed by the drugs’ revenues," it said.

For AbbVie, the cost to produce Humira amounted to about 11 percent of its revenue from the drug between 2009 and 201, according to data collected by the committee and included in the suit. As for research and development, AbbVie's total R&D expenditure was less than 7.5 percent of its total profit from Humira, according to the suit.

But legal and market experts told Crain's Chicago Business it is unlikely that the lawsuit will have a major affect on the company or its bottom line.

Last year, one of the same firms involved in the class action lawsuit lost out to the drugmaker in a challenge over its patents, with the 7th Circuit Court of Appeals upholding a Chicago district court judge's dismissal of a complaint alleging Abbvie used a "thicket" of patents to create an illegal monopoly.

An in February, Abbvie was accused of breaching human rights with its Humira price in a court in Amsterdam by The Pharmaceutical Accountability Foundation, a Dutch public interest group. Abbvie representatives said the company follows all applicable laws and regulations, according to the Financial Times.

“We firmly reject the allegations by the Dutch Pharmaceutical Accountability Foundation, which are without merit, and remain fully committed to the patients and the societal needs we serve,” they said.

The first biosimilar competitors of Humira — the equivalent of generic versions of the drug — first entered the market this year, with more than half a dozen new versions set to launch in the summer.

Significant cuts to the price of Humira are not expected before the end of the year, Reuters reported, but analysts anticipate that competition from biosimilars will cut Humira sales from $21.2 billion last year to $8.3 billion next year.