On February 5, Merck announced that it will create a new spinoff that will include its biosimilar business with Samsung Bioepis as well as its legacy pharmaceuticals (e.g., Zetia®, Vytorin®, and other widely diversified brands). In its press release, Merck emphasized that the as-yet unnamed new company will also have a strong focus on women’s health.
Merck has an agreement with Samsung Bioepis to market the latter’s infliximab biosimilar Renflexis®, trastuzumab biosimilar Ontruzant®, and its etanercept biosimilar Brenzys®, which is available outside the US only.
This new firm will take the lessons learned from its commercialization experience with Samsung Bioepis to help it expand: The Merck spinoff will “pursue opportunities to partner with biopharmaceutical innovators looking to commercialize their products by leveraging [the new company’s] scale and presence in fast-growing international markets.” Merck expects that 75% of the revenues of the spinoff will come from the global markets.
The three Merck biosimilars reached global sales of $300 million, as reported by the Wall Street Journal. Interestingly, Merck earned $411 million in 2019 from sales of Remicade in the EU (which it markets as part of an agreement with Johnson & Johnson). This is down from $582 million for the previous year. Our call to Merck regarding whether Remicade marketing will be under the new entity was not immediately returned.
According to Chairman and Chief Executive Officer, Kenneth
C. Frazier, this move will allow the parent company to focus its “key pillars
of oncology, vaccines, hospital. and animal health,” including its highly
profitable Keytruda® cancer brand and innovative research and
development. Once the new organization is created in the first half of 2021, it
will be based in New Jersey.
past several years, we have purposefully shifted the focus of our efforts and
resources to our best opportunities for growth.” Mr. Frazier continued, “Given
the opportunities now in front of us, we believe we can benefit from even
Evidence is mounting, especially from Europe that biosimilars to a single reference product result in the same clinical outcomes, with no appreciable safety issues. Evidence of this type from America will take time to accumulate, because competition in categories with multiple biosimilar options has been much more limited.
The recent announcement in British Columbia of the province’s decision to switch patients with inflammatory bowel disease from Remicade® to biosimilars has once again inflamed some passions. This is part of a broader effort by the Canadian province to increase utilization of biosimilars to gain economic savings. The Canadian GI Society, an advocacy group, published a letter firmly against the plan. They believe only the physician and patient should decide whether a biosimilar switch should occur. The British Columbia government, on the other hand, will pay for either Renflexis® or Inflectra® but not Remicade® after March 5, 2020. Even if patients have been taking the reference product, they will have to switch to one biosimilar or the other.
The Biosimilar Switching Argument
With medical experience supporting the case for switching, the argument by this Canadian advocacy group is less than solid. There may be the need for a medical exception for the infrequent patient taking infliximab, but these drugs can be effectively switched: there is no meaningful difference in effectiveness and safety outcomes on a population-wide basis among infliximab choices.
That said, here is where the supporting arguments get somewhat messy. The Food and Drug Administration (FDA) approves a biosimilar based on its equivalence to a reference product (not to other biosimilars). At the implementation of the Biologics Price Competition and Innovation Act, a biosimilar manufacturer has been required to show that its biosimilar was comparable in physiochemical, pharmacokinetic, and clinical studies to a designated reference product (i.e., US-licensed version of the originator). That required some manufacturers to first prove the equivalence of the US-licensed version to the EU-approved originator in a “bridging study.” This requirement was borne from the understanding that the US- and EU-licensed originator biologics make not be exactly the same either—biosimilars of each other. With more experience, the FDA has backed away from this requirement, understanding that the clinical outcomes differences between two licensed originator products are negligible.
The Laws of Transitivity and Biosimilar Switching
However, the FDA has not revised its opinion on whether two
drugs proved to be biosimilar to one reference product are biosimilar to each
other. Nor whether an interchangeable biosimilar might be considered
interchangeable with other biosimilars. The answer remains: The evaluation
process does not require such testing to gain basic biosimilar approval. In
other words, the evidence did not yet exist.
This all relates to the basic premise of so-called
“nonmedical substitution.” The issue is whether a payer-initiated change with a
noninterchangeable biosimilar is considered to be more like therapeutic or
generic substitution. Therapeutic interchange or substitution takes place when
a drug is switched for another in the same category (e.g., switching Lipitor
for a different statin rather than the generic atorvastatin).
Therapeutic Interchange vs. Biologic Substitution
A payer would be hard pressed to justify an unauthorized switch of adalimumab for infliximab. They are very different TNF-inhibitors. Patient outcomes would likely be affected in some way. Are Inflectra and Renflexis—different infliximab biosimilars—to be considered wholly different biologics? Because the FDA does not endorse that Inflectra and Renflexis are biosimilar to each other, it does imply (whether wrongly or rightly) that they are different biologic brands. If this was considered in the traditional sense, switching might be construed as an example of therapeutic interchange.
Framing the argument in this manner can drive patient and provider resistance to biosimilar uptake. Misinformation? Rather, I believe that this is an embodiment of the ambiguity of our regulatory policies. Certainly, payers don’t subscribe to it; they cover one versus another based more on net costs—certainly not on clinical outcome differences. For payers, it is more black and white; for certain other groups, much remains gray, especially when people believe more decision-making authority is being challenged. Only greater biosimilar clinical utilization, proof of savings, and better dissemination of education about this experience will change advocacy’s perspective .
In a busy beginning of the week, the US Food and Drug
Administration approved new biosimilars for Humira®and Rituxan®. Samsung Bioepis gained approval for Hadlima™
(adalimumab-bwwd), and Pfizer scored with Ruxience™
The approval for Hadlima covers the following indications:
Juvenile idiopathic arthritis
Crohn’s disease in adults
Formerly known as SB5, Samsung Bioepis secured Hadlima’s approval
on the basis of phase 1 and phase 3 studies in rheumatoid arthritis.
The phase 3 investigation included over 500 patients, finding ACR20
responses to be equivalent to that of Humira (at 72%). Immunogenicity profiles
for the two agents were also similar through 52 weeks of a switching study.
According to its licensing agreement with Abbvie, manufacturer of Humira, Samsung will not be able to market this agent until end of June 2023. This agent joins Samsung’s two other approved anti-TNF biosimilars, Renflexis (infliximab) and Eticovo (etanercept). Only Renflexis is currently marketed in the US.
Pfizer’s newest biosimilar entry, Ruxience, has been
approved for a subset of indications of reference product Rituxan, including:
Treatment of adult patients with relapsed or refractory, low-grade or follicular B-cell non-Hodgkin’s lymphoma who are CD20-positive and have failed prior treatments
Patients who have nonprogressing, low-grade, CD20-positive B-cell non-Hodgkin’s lymphoma and who are stable after receiving a prior chemotherapy regimen containing cyclophosphamide, vincristine and prednisone
Patients with CD20-positive follicular lymphoma who are therapy naïve in combination with chemotherapy or who had responded to previous rituximab therapy
Patients with CD20-positive chronic lymphocytic leukemia in combination with fludarabine and cyclophosphamide
Granulomatosis with polyangiitis in adult patients in combination with glucocorticoids
The biosimilar does not include Rituxan’s labeled indication for rheumatoid arthritis, similar to the other approved rituximab biosimilar.
The application for Ruxience included the results of the
phase 3 clinical trial (REFLECTIONS), which included
394 patients with follicular lymphoma. Compared with the EU-licensed version of
rituximab (MabThera®), Ruxience was found to provide equivalent
clinical and safety outcomes.
Originally designated PF-05280586, Pfizer has not disclosed when Ruxience will be available. Pfizer signed a settlement with Roche (Genentech) over litigation for a key Rituxan patent, but terms of this agreement were not disclosed. The other FDA-approved biosimilar competitor in this space, Celltrion’s Truxima®, is similarly awaiting launch.
Reading the white paper co-published March 19 by the US-based Biosimilars Forum and UK-based Medicines for Europe highlighted for me the importance of an essential roadblock to increased biosimilar uptake in the US.
The white paper outlined structural market changes needed in
the US to gain comparable conversion of marketshare in the European market. Without
a doubt, barrier number 1 is the patent thicket erected by biologic makers and
the resulting patent litigation. This causes barrier number 2: the signing of
licensing arrangements that prevent biosimilar makers from entering the market
at the earliest possible date.
However, this still doesn’t address the lack of biosimilar uptake for infliximab: Inflectra® has been available for use since 2016. Whereas I placed considerable blame for this on Pfizer, which underestimated payers’ reaction to its initial discount on Inflectra. Today, I place more of the responsibility on the health plans and insurers for lacking the backbone needed to ensure a vibrant biosimilar market for infliximab. The health system can gain the greatest savings by converting to biosimilar infliximab compared with any currently launched biosimilar. With that in mind, let’s consider these agents.
According to the white paper, “Full buy-in is needed from
payers to sustain a competitive market that values the most cost-effective
medicines. This includes proactive incentivizing of biosimilar prescriptions,
educating stakeholders on the promise of biosimilars, and requiring commercial
insurers to provide access to biosimilars.”
I will take this one step further. Patients need to act on
their desire for less-expensive alternatives at the physician’s office. Two
things must occur to produce this result: (1) the provision of more accurate,
less misleading information to patients relating the quality of biosimilars and
their clinical efficacy and safety, and (2) financial incentives for patients
to specifically request biosimilars.
There is no question that patients are often confused by the contradictory information they receive on biosimilars. This harkens back to generic–branded drug battles of decades ago. Without accurate education, patients will not reliably consider a biosimilar alternative to products like Remicade® . Much has been published on this issue already, and several biologic makers have been castigated about their contributions to misinformation. This must intensify if the second “pull-through” for biosimilar uptake is to be successful.
Any American patient who has faced high cost sharing or
deductibles has considered ways to lower his or her costs. That includes making
the decision to not refill their prescription or take their medications as
directed. Infliximab is only available today as an office-based infusion, but
should a subcutaneous version be approved, this, too, would be more directly in
the patient’s hands.
The only way this will occur is if patients are given an
appropriate choice by their health plans and insurers: lower cost sharing for
biosimilars. This is accomplished easily, through the creation of a specialty biosimilar
tier (or assignment of biosimilar agents on a fixed cost, tier 3–type payment).
With the reference product strictly on tier 4 or 5 (co-insurance tiers with
high dollar maximums), this would be the practical step to move the needle. For
Medicare Part D beneficiaries, this could be as high as 33%
With the exception of very few payers, this has not occurred for Inflectra. It did occur for Zarxio®, as early as 2017, but it is not used for a chronic medication. When patients begin asking for lower-cost alternatives and payers provide cost-sharing structures that favor biosimilar use, Inflectra or Renflexis® uptake will begin to increase. That means payers foregoing short-term rebate revenue for longer-term cost savings. But one cannot occur without the other.
The information package released by reviewers for the Food and Drug Administration (FDA) indicates that a positive recommendation for Celltrion’s rituximab biosimilar is likely at the Advisory Committee meeting on October 10.
The members of the Oncologic Drugs Advisory Committee will review the data and hear public comments before voting to recommend that the FDA ultimately approve or reject CT-P10 for the treatment of non-Hodgkin lymphoma. Celltrion did not perform clinical trials for rituximab’s autoimmune indications. However, if the FDA approves CT-P10, it may extrapolate the approval to other indications as well.
The original 351(k) application by Celltrion in April 2017 resulted in a complete response letter from the FDA. The rejection for this rituximab biosimilar cited multiple deficiencies, including “clinical, product quality, and facility” problems, as well as clinical study issues from the original submission.
According to the FDA reviewers, “In considering the totality of the evidence, the data submitted by [Celltrion] show that CT-P10 is highly similar to US-licensed Rituxan®, notwithstanding minor differences in clinically inactive compounds, and support a demonstration that there are no clinically meaningful differences between CT-P10 and US-licensed Rituxan in terms of safety, purity, and potency of the product.”
BR&R will cover the Oncology Drug Advisory Committee meeting and provide updates on its decision. If this rituximab biosimilar is eventually approved by the FDA, Teva would market the product in North America, based on a previous partnership agreement.
In other biosimilar news…Merck has inked an exclusive contract to supply its biosimilar infliximab (Renflexis®) with the US Department of Veterans Affairs. According to a report from Pharmaphorum, it will be the only infliximab biosimilar on the VA’s national formulary.
Everyone with an opinion believes that biosimilar drug use will save the health system considerable money. Calculations for biosimilar savings have been hampered by several factors. For example, previous high estimates have not been based on real-life scenarios. Only 3 biosimilars have been launched and utilized in the US; so little experience has been gained on which to base calculations.
Yet, isolating the savings associated with a single approved biosimilar does put their potential into perspective. It also demonstrates the promise of cumulative biosimilar savings with their launch and uptake. Based on current infliximab average sales prices (ASPs), which considers discounts and rebates, one organization believes that a 50% marketshare for biosimilar infliximab could result in well over $400 million in annual savings system wide.
The analysis, conducted by Wayne H. Winegarden, PhD, Senior Fellow in Business and Economics, Pacific Research Institute, accrued the lion’s share of the annual savings to employer-sponsored health plans ($262 million to $315 million, compared with no sales of infliximab biosimilars). Medicare accounted for up to $150 million savings annually.
Dr. Winegarden tested several scenarios. The calculation considered the cost of the infliximab regimen based its various indications. He calculated biosimilar savings using different add-on percentages to ASP (including the current ASP + 4.3% payment and up to ASP + 20%), as well as different marketshares of the biosimilars (from 10% to 90%).
The current marketshare of the two available infliximab biosimilars—Inflectra® and Renflexis®—is below 5%, based on data from the first quarter of this year. This is partly because of Janssen’s tactics in matching the net costs of biosimilars with additional rebates on Remicade. This raises two important points: Dr. Winegarden’s analysis reveals savings accruing to the health care system (not necessarily to the payer). Also, the very existence of infliximab biosimilars has resulted in significant net savings compared with the price increases seen prior to their introduction.
It is a bit more difficult to pinpoint the system savings resulting from the use of the first biosimilar approved in the US, filgrastim-sndz (Zarxio®). The other branded product, tbo-filgrastim (Granix®), was launched a couple of years earlier and gained its own marketshare from the reference brand Neupogen®. No doubt, Zarxio contributed to some level of cost savings. In other words, the infliximab example is an easier calculation with a cleaner result.
With eight biosimilars for six reference products awaiting their turn to hit the market, and drugs like adalimumab and etanercept among them, it is easy to see how biosimilars savings can easily exceed $10 billion. Just not yet.
Health plans and insurers are not yet turning to biosimilar infliximab as a preferred therapy, according to Gillian Woollett, DPhil, MA, of Avalere. Her new report surveyed publicly available policy about health plans across the nation. The principal finding was that step therapy was commonly used to encourage use of the originator product.
In fact, just one health plan (representing 1% of the 172 million lives covered in this study) supported the use of either Inflectra® or Renflexis® over the reference product Remicade® through step therapy. One plan (2% of the covered lives) allowed the use of either the originator product or Inflectra as a first step.
Four of the 18 plans with publicly available information did not utilize step-therapy rules for any forms of infliximab. However, “10 of the 18 plans (55% of plans, 52% of covered lives) require the use of [Remicade] first, alone or in combination with another DMARD,” stated Dr. Woollett in the report. A total of 81% of the covered lives from these 18 plans were subject to step therapies limiting access to one infliximab product or the other.
On its face, this type of step policy makes a bit of sense. Step therapies are often used alone or part of prior authorization mechanisms to make sure patients try more cost-effective agents first. In rheumatoid arthritis, that may comprise use of nonbiologic drugs before proceeding to a TNF inhibitor and then to another biologic in patients with rheumatoid arthritis. However, there is no proven benefit (or even logic) to offering a biosimilar infliximab after failing Remicade, or vice versa. If there was a significant clinically relevant difference in immunogenicity, this could be an issue, but this also has not been seen in practice. It makes more sense to try another anti-TNF or perhaps even move to an interleukin inhibitor—something with a different (or slightly different) mode of action.
A policy such as this can confuse the issue for patients, whose knowledge of biosimilars seems tenuous, and even providers, some of whom have little experience prescribing them, particularly because of payers’ Remicade-first policies.
The Avalere report provides some support for how payers are arresting utilization of biosimilar infliximab in favor of the originator infliximab product.
Dr. Woollett paints a very different picture for subcutaneously administered filgrastim products. Forty-nine percent of the covered lives (five large plans) had policies favoring Zarxio®, whereas 27% of covered lives were encouraged to use Neupogen® first. For these 18 plans, five (28% of plans, 49% of covered lives) demonstrate a preference for the biosimilar, filgrastim-sndz. Five (28% of plans, 27% of covered lives) demonstrate a preference for the reference filgrastim. Eight plans (44% of plans, 24% of covered lives) do not indicate a preference through formulary design. A further 24% were not subject to any preference.
According to an article posted on the Market Realist website, Pfizer’s US and global biosimilars revenues are growing, but its sales of Inflectra® remain stunted.
In the fourth-quarter of 2017, the New York–based company posted US biosimilar revenues of $44 million—all attributable to its infliximab biosimilar. The product was launched in Q4 2016 (and gained only $4 million in revenues), but the revenue was reported to be somewhat higher than in Q3 2017. Total 2017 Inflectra revenue was $118 million.
Internationally, where Pfizer not only markets Inflectra, but its Retacrit® form of epoetin alpha and its Nivestim® brand of filgrastim, biosimilars contributed $531 million to the bottom line in 2017, an increase of 37% compared to the previous year.
There is little doubt that Pfizer’s US Inflectra revenues will continue to increase, but competition from Samsung/Merck’s Renflexis® and Janssen Biotech’s continuing heavy rebates on Remicade® should prove challenging to Pfizer. Merck has not yet reported its Q3 or Q4 sales of Renflexis, which was only launched in July 2017.
Its next big splash into the US biosimilars market may not occur in 2018. Its rituximab biosimilar (PF-05280586) met its primary outcomes measures in a phase 3 trial, as announced in January, but no target date has been yet reported for its 351(k) application to the Food and Drug Administration (FDA). However, this product may face stiff competition from Celltrion and Sandoz for their rituximab biosimilars currently being reviewed by the FDA. Celltrion is partnered with Mylan (not Pfizer) in the commercialization of its rituximab biosimilar.
The US Court of Appeals handed Pfizer a big victory in its gamble to bring its biosimilar version of Remicade® to the market before the completion of patent litigation. On January 23, the Appeals Court ruled that Johnson & Johnson’s ‘471 patent in the case was declared invalid, clearing the way for sales of Inflectra® (infliximab-dyyb). Had Pfizer lost the suit, J&J could have sought Inflectra’s (and Samsung/Merck’s Renflexis®’s) revenues in addition to other damage claims.
Remicade’s ‘471 patent expiration was September 2018, but the US Patent and Trademark Office earlier ruling contended that the antibodies at the center of this patent were already included in patents that had previously expired.
Remicade is manufactured and sold by J&J’s subsidiary, Janssen Biotech.
In a widely publicized case, Pfizer sued J&J in September 2017 for anticompetitive practices, which it believes held down the sales of Inflectra to a spare $74 million for the first three quarters of last year. Although J&J is seeking to appeal the decision, with the patent expiration date looming, as well as limited sales of Inflectra, this would seem to be of relatively little benefit.
In any case, J&J is wary of losing marketshare and revenues on Remicade. According to Bloomberg News, Janssen Biotech saw fourth-quarter revenues from the biologic drop almost 10%, to $1.47 billion. Increasing competition from other biologics for similar indications and other biosimilar versions of infliximab worldwide have contributed to reduced sales.
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.