Pfizer loads up for Remicade biosim launch, with $4.5B J&J brand in its sights

Pfizer’s U.S. biosimilar assault on Johnson & Johnson’s star autoimmune med Remicade is set for go. Late Monday, Pfizer said it’ll begin shipping its Remicade biosimilar, Inflectra, late next month.

Pfizer says it will list Inflectra at a 15% discount to Remicade’s wholesale acquisition cost, or $946.28 per 100-mg vial, according to a company spokesperson, “to offer immediate relief in this high-cost area.”

That's the list price, however, and payers are eager to strike deals on biosims as a way to save money on high-cost biologic drugs like Remicade, which delivered $4.5 billion in U.S. sales to J&J last year. And though Remicade biosims launched in Europe at fairly reasonable discounts, they quickly gobbled up market share from Merck & Co., which markets the med in that region.

J&J, meanwhile, says it's prepared for the fight. The “U.S. commercial team is ready for a potential biosimilar launch,” Joaquin Duato, pharma group chairman, said on the company’s Q3 conference call Tuesday. It’s already an “extremely competitive” market on price, he said, and J&J intends to develop “innovative contracts” to “utilize the full breadth” of its portfolio.

“We feel well prepared to face the biosimilar and as (CFO) Dominic (Caruso) said we are convinced that we will continue to grow our business in the face of biosimilar competition,” Duato said on the call.

J&J’s Remicade sells for $1,113 per vial before discounts, or $28,945 per year for the average patient, according to a company spokesperson. But its average selling price is 30% cheaper following "significant" discounts and rebates.

Pfizer is moving forward despite the fact that the companies haven’t resolved a Remicade patent dispute. In August, a U.S. district judge struck down a key patent on the drug, prompting J&J to appeal. The New Jersey company said it considered any launch by Pfizer before the resolution “at-risk," which could put the New York pharma on the hook for triple damages if found in violation of Remicade patents.

Recently announced formularies show that U.S. payers are aiming to squeeze savings out of big drug-spending categories by adopting biosimilars. CVS Health, for one, has opted to go with Novartis’ biosimilar of Amgen brand Neupogen, Zarxio, and Eli Lilly and Boehringer Ingelheim’s copy of Sanofi’s basal insulin Lantus, Basaglar.

Pfizer’s discount is one that Credit Suisse analyst Vamil Divan called “reasonable” in a note to clients Tuesday. Divan said J&J investors will likely welcome the “clarity” on the Remicade biosim threat.

Still, with its $6 billion-plus in annual sales, Remicade is a key contributor for the New Jersey drug giant, and the fact that it’s facing biosimilar competition could bring some discomfort, particularly if Merck's experience is any guide. The company's decrease in brand sales was swift and significant in Europe; in its most recent earnings announcement, Merck reported a 26% decrease in Remicade sales on the continent. Inflectra has been available in Europe since early last year.

In its efforts to fend off competition, Merck reduced the cost of Remicade in the U.K., an approach J&J could consider in the U.S., but one that would still erode sales.

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