Health Care as the Economy's Backstop
When economists assess the health of the American labor market, they typically focus on headline numbers: total nonfarm payrolls, the unemployment rate, job openings, and wage growth. What these top-line figures often obscure is the degree to which a single sector has become responsible for keeping the overall employment picture positive. According to recent analysis, the U.S. workforce would have actually shrunk if it were not for the $5.3 trillion health care industry continuing to add jobs at a pace that offsets losses or stagnation in other sectors.
This statistic deserves serious examination. A $5.3 trillion industry that employs roughly one in eight American workers and continues to expand even as other sectors contract is not merely a large industry — it is a structural pillar of the economy whose health directly determines national economic outcomes. When hospitals, physician practices, home health agencies, pharmaceutical companies, and health insurance providers add jobs, they are not just serving patient needs. They are providing the employment growth that keeps consumer spending, tax revenue, and economic confidence from deteriorating.
The implications cut both ways. On one hand, health care's role as an employment engine provides genuine economic stability. These are largely domestic jobs that cannot be offloaded overseas, many offer competitive benefits, and the sector's demand drivers — an aging population, chronic disease prevalence, medical technology advancement — are unlikely to reverse anytime soon. On the other hand, an economy that depends on health care spending growth for its employment trajectory is an economy tethered to one of its most expensive and politically contentious sectors.
The Humira Biosimilar Landscape: Not What Anyone Expected
Against this macroeconomic backdrop, the pharmaceutical sector is undergoing its own economic transformation, and nowhere is this more visible than in the market dynamics surrounding AbbVie's Humira (adalimumab). For years the world's best-selling drug by revenue, Humira faced its long-awaited patent cliff when biosimilar competitors finally entered the U.S. market in 2023, promising to bring competition and lower prices to a product that had generated over $200 billion in lifetime sales.
The biosimilar landscape that has emerged, however, has surprised many industry observers. Charts tracking Humira's market share, biosimilar uptake rates, and pricing dynamics tell a story that deviates significantly from what economic models predicted. The transition from branded to biosimilar has been neither as fast nor as disruptive as the experiences in European markets suggested it would be.
Several factors explain this divergence. The U.S. pharmacy benefit management system, with its complex web of rebates, formulary placement decisions, and patient cost-sharing structures, creates incentives that do not always favor the lowest-cost product. Biosimilar manufacturers must navigate not just FDA approval but also the commercial realities of convincing payers, physicians, and patients to switch from a branded product they know and trust to an alternative that is clinically equivalent but unfamiliar.
Physician prescribing inertia also plays a role. Rheumatologists, gastroenterologists, and dermatologists who have prescribed Humira for years have established comfort with its safety profile, patient support programs, and administration protocols. Switching a stable patient to a biosimilar requires a conversation, a clinical decision, and follow-up to ensure equivalent outcomes — effort that some busy practices are reluctant to undertake without strong incentives.
Skyrizi's Ascent: The Real Competitive Threat
While biosimilars chip away at Humira's market from below, the more consequential competitive dynamic may be coming from above. Skyrizi (risankizumab), also manufactured by AbbVie, has emerged as a dominant force in the immunology market, capturing prescription volume not just from competitors but from Humira itself. AbbVie's own strategic positioning of Skyrizi as a next-generation immunology treatment has effectively created an internal succession plan, redirecting revenue from its aging blockbuster to its newer product.
Skyrizi's clinical profile — targeting interleukin-23 with high selectivity — offers efficacy advantages over Humira in several indications, including psoriasis and Crohn's disease. For patients and physicians considering whether to stay on Humira, switch to a Humira biosimilar, or move to a mechanistically different treatment, Skyrizi presents a compelling option that is neither generic nor biosimilar but genuinely new.
This three-way competitive dynamic — branded Humira versus biosimilar Humira versus next-generation Skyrizi — is creating market outcomes that defy simple narratives. Biosimilar advocates expected competition to drive prices down and shift volume away from the branded product. Instead, much of the volume shift is going to a newer, more expensive branded product, potentially increasing rather than decreasing total spending in the immunology category.
What the Humira Chart Actually Shows
The surprising Humira chart that has captured industry attention illustrates these dynamics quantitatively. Rather than showing the steep branded-to-generic cliff that typically accompanies patent expiration, the data reveals a more gradual transition complicated by the simultaneous rise of Skyrizi and the structural barriers to biosimilar adoption in the U.S. market.
For health economists, this chart is a case study in why pharmaceutical market competition does not behave like competition in most other industries. The product is not a commodity — it is a therapeutic intervention with complex switching considerations. The buyer is not the consumer but a chain of intermediaries including physicians, pharmacists, insurance companies, and pharmacy benefit managers, each with their own incentive structures. And the regulatory framework, while designed to promote competition, also creates barriers that slow the pace of market entry and adoption.
Implications for Health Care Spending
The convergence of these trends — health care as the economy's employment backbone and pharmaceutical market dynamics that resist simple competitive models — paints a picture of a sector that is simultaneously essential and resistant to the cost discipline that the rest of the economy imposes on its industries.
Health care spending as a share of GDP continues to rise, driven by an aging population, expanding insurance coverage, new treatment modalities, and the kind of pharmaceutical market dynamics visible in the Humira-Skyrizi story. Each new biologic therapy that enters the market at premium pricing adds to total spending even as it improves patient outcomes.
For policymakers, the challenge is clear but the solutions are not. Biosimilar competition was supposed to be one of the primary mechanisms for controlling biologic drug spending, and while it is producing some savings, the magnitude falls short of early projections. Next-generation branded products like Skyrizi complicate the picture further by offering clinical improvements that justify premium pricing even as older products face generic competition.
The health care economy, in other words, continues to grow in size, complexity, and economic importance. Whether this growth represents a sustainable investment in population health or an unsustainable cost trajectory depends on which metrics you examine and which time horizon you consider. What is not in dispute is that the sector's economic footprint is now so large that its dynamics — from employment trends to drug pricing to biosimilar adoption — are macroeconomic events, not just industry stories.
This article is based on reporting by STAT News. Read the original article.
