Pfizer filed suit against Johnson & Johnson (J&J) on Wednesday for allegedly using anticompetitive practices to prevent less expensive versions of its rheumatoid arthritis (RA) drug to thrive in the budding biosimilar market.
First approved in 1998, J&J’s tumor necrosis factor-inhibiting biologic is used to treat a range of immune-mediated diseases in nearly 500,000 Americans, including for Crohn’s disease, ulcerative colitis, rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis and plaque psoriasis and has been hauling in billions for J&J (about $4.8 billion in United States sales in 2016).
Remicade, which Johnson & Johnson markets in partnership with Merck & Co., amassed almost $7 billion in revenue a year ago, including $4.8 billion in US sales. However, insurers reversed course after J&J threatened to withhold significant rebates unless insurers agreed to “biosimilar-exclusion” contracts that effectively block coverage for Inflectra and other infliximab biosimilars. Biosimilars are seen as a modern-day version of generic drugs for biologic drugs.
Thus, Pfizer argued, Inflectra’s lower price has not become a differentiator to its reference biologic. In April 2017, the FDA approved Renflexis, another Remicade biosimilar, developed by Samsung Bioepis Co. and marketed by Merck & Co. Those list prices do not reflect secret rebates that manufacturers provide. The lawsuit alleges J&J entered anti-competitive, exclusionary contracts with insurers, hospitals, and clinics, which blocked 70% of commercially insured patients from accessing their drug. The biologic medicine market is roughly $200 billion, according to Morgan Stanley. “This is, in our view, a bellwether case–and what we are seeking is for J&J to refrain from using these sorts of exclusionary contracting arrangements with insurers and providers”, Lauren Chenoweth, deputy general counsel at Pfizer, told the Chicago Tribune.
In the absence of such coverage, providers-who depend on reimbursement from insurers-are reluctant to stock biosimilars, even to service Medicare and Medicaid patients where there is widespread coverage for Inflectra.
“To date Pfizer has failed to demonstrate sufficient value to patients, providers, payers and employers”, said Scott White, the President of Janssen Biotech Inc, which is a unit of Johnson & Johnson.
But Pfizer says in its complaint that despite this competition, J&J’s brand-name product still controls 96% of the market because of its effective strategies to stall the competition (which Focusfirst reported on two weeks ago, though the theory that manufacturing issues may be partly to blame for the slow Inflectra uptake have since been debunked). J&J is now the world’s largest pharmaceutical company. The lawsuit was filed in USA district court in Pennsylvania.