(Published February 16, 2016)
While the Food and Drug Administration mulls its Arthritis Advisory Committee’s 21-3 vote to approve Celltrion’s CT-P13 biosimilar to infliximab (Enbrel®, Amgen), payers have time to consider what Celltrion’s launch may mean for their specialty pharmacy budget. This may not be known for some time, especially if one considers that the price of the reference product and biosimilar may fluctuate through a contracting cycle or two. Let’s contemplate 2 areas that can affect how we view contracting/pricing quite a bit.
First, if the biosimilar manufacturer launches its new product at a 15% discount (as Sandoz did in launching the first biosimilar Zarxio® in 2015), what will be the reaction of the innovator’s manufacturer? Will they meet that price? Will they increase their rebates to compensate and to retain as much marketshare as possible? If this happens, will the biosimilar manufacturer, knowing payers are seeking the lowest possible price, drop their price/increase their rebates another 10%? Another aspect is that Amgen may feel that its principal hospital business for Neupogen is less threatened by Zarxio. This “contracting dance” may be played out over months or years.
Second, pharmaceutical companies have been known to raise their prices in anticipation of new generic drug competition, trying to maximize rev
enue from the product before the insurers and health plans inevitably switch to generic coverage. This same scenario may be playing out in the biologic space today. Based on information courtesy of the Elsevier Gold Standard Drug Database, Amgen has been hiking the price of Enbrel impressively over the past 2 years:
- June 2014: 6.9%
- November 2014: 7.9%
- May 2015: 9.9%
- December 2015: 7.9%
Although these actions may have been taken by Amgen in part to mai
ntain revenue in the face of falling prescription volume, the price of Enbrel has jumped 36.7% in less than 2 years. So, if Pfizer and Celltrion roll out their biosimilar version of infliximab at even a considerable 25% discount, this means that plans will not be saving but spending approximately 10% more compared with the May 2014 price. About the best thing that can be said, in this scenario, is that they will now have a guard against future price hikes.