Humira has not just been a wonder drug for treating moderate to severe rheumatoid arthritis and other debilitating auto-immune conditions for millions of people; it has been a cash cow for its manufacturer, AbbVie Inc. (ABBV). Excluding the COVID vaccine that was developed in response to the pandemic, Humira has been the world’s best-selling drug.
In return, the company has defended its fortress from potential competition from cheaper substitutes for over two decades with the help of the American patent system, which has enabled ABBV to file more than 100 patents to extend Humira’s patent protection beyond the 12 years that’s standard for other biotech drugs.
Biotech drugs like Humira are more complicated to design, develop, manufacture, and administer than pills or tablets. Consequently, their interests are protected by relatively more patents and intellectual property (IP) rights around them.
However, even by those standards, ABBV’s strategy was more aggressive, according to some experts, considering that some of Humira's patents covered things such as the drug's formulation and manufacturing methods.
But ABBV’s approach of taking no prisoners may be coming back to bite it this time around. In this article, we will look into the specifics and potential consequences of its alleged transgressions.
Under The (Double-Barreled) Gun
On April 25, ABBV was sued by a nationwide class of consumers who have accused the drug maker of fraudulently and illegally inflating the cost of Humira by as much as 470% over the past two decades.
The class action lawsuit filed in the U.S. District Court for the Northern District of Illinois alleges that the drug maker had repeatedly raised the publicly-listed price paid by consumers while offering pharmacy benefit managers (PBMs) lower and undisclosed net prices for its blockbuster drug.
ABBV has allegedly exploited this covert arrangement to charge its consumers exorbitantly while helping PBMs to profit excessively by pocketing a portion of the larger spread between the publicly listed price and the private net price they paid for the drug. Continue reading "Navigating A Major Lawsuit: Will Pharma Stock ABBV Hold Strong Under Scrutiny?"