In late May, Merck was named in a UK lawsuit by Pfizer, which has been trying to expand its market for Inflectra®. Merck, which markets Remicade® (infliximab) in the EU, was accused of anticompetitive practices. On September 20, Pfizer brought a similar complaint against Johnson & Johnson (the parent of Janssen and the manufacturer of Remicade®) in the US, according to a lawsuit filed in US District Court (Eastern District of Pennsylvania).
Whereas Pfizer has made some inroads to the US market, since its launch at the end of 2016, Janssen has done a good job of blocking and tackling—playing the contracting game. The lawsuit claims that Janssen has withheld or threatened to withhold rebates if payers do not keep Remicade in an exclusive preferred position. Pfizer may have invited such action to an extent by entering the market at a 15% discount to the originator’s wholesale acquisition cost (WAC). Many experts expected this type of approach by Janssen. Payers were candid in their reluctance to switch to the biosimilar, especially if Janssen would counter the modest discount with rebates that narrow or eliminate the difference in net costs. In other words, a greater discounted price may have opened the market to Pfizer more rapidly, because Janssen may have been less aggressive in its efforts to match the net cost.
In an August earnings call, Pfizer indicated that although Medicare is covering Inflectra, its overall US marketshare was only 2.3%.
According to the press release announcing Pfizer’s lawsuit, “[Johnson & Johnson’s] exclusionary contracts and other anticompetitive practices have denied U.S. patients access to therapeutic options and undermined the benefits of robust price competition in the innovative and growing biologics marketplace for patients… J&J’s systematic efforts to maintain its monopoly in connection with Remicade® (infliximab) by inappropriately excluding biosimilar competitors violates federal antitrust laws and undermines the principal goals of the federal Biologics Price Competition and Innovation Act (BPCIA).”
This may be the first time that routine contracting efforts to defend against generic competition and maintain a monopoly within a drug category have been cited as a violation of antitrust legislation. What may have amplified Pfizer’s ire was its assertion that several insurers originally placed Inflectra at parity coverage with Remicade. These payers changed their position after “J&J threatened to withhold significant rebates unless insurers agreed to effectively block coverage for Inflectra and other infliximab biosimilars.”
Furthermore, the suit claims that clinicians and hospitals were reluctant to purchase Inflectra, with the belief that insurers may not reimburse them for its use. These providers may have been further influenced by an insistence by J&J on their signing contracts that dictated significant discounts on Remicade only if they would not purchase Remicade or other infliximab biosimilars.
At this time, Inflectra is priced at an average 19% discount to Remicade’s wholesale acquisition cost (WAC). Pfizer says that it is offering additional discounts on top of this to persuade payers into covering their biosimilar. Merck’s launch of its own biosimilar infliximab (Renflexis®) comes with a price tag of 35% below that of Remicade, which adds tremendous pressure on payers to reconsider their positions. This also signals the early closing of Pfizer’s window of opportunity as the first biosimilar entrant, on which it gambled an at-risk launch.
