Johnson & Johnson’s blockbuster anti-TNF drug Remicade fell victim to biosimilar competition in Europe in 2015 and in the U.S. last year, but the impact of the inexpensive copycat drugs has been quite different in the two regions. In Europe, J&J has seen its share of the Remicade market fall to 50% in the last two years, when measured by units sold, according to a new report from Sanford Bernstein. In the U.S., by contrast, J&J has barely lost any market share.
Fancy footwork in J&J’s U.S. marketing strategy made all the difference to the company's ability to hold on to market share, Bernstein analysts concluded. By contrast, in European markets, most notably the United Kingdom and Germany, healthcare providers have embraced biosimilars as a strategy for dealing with budgetary constraints, analyst Ronny Gal said in the report. Merck distributes Remicade in Europe.
At this point, most of the market for biosimilars is overseas, Gal noted. So Bernstein analyzed European adoption for biosimilar versions of Amgen's Epogen, Enbrel and Neupogen, plus Roche's Rituxan, and Remicade in Europe, while detailing biosimilar adoption of Neupogen and Remicade in the U.S.
In Europe, the reception for biosimilar versions of anti-TNF drugs Remicade and Enbrel has been so strong it has sparked a 30% to 50% reduction in pricing on the branded versions, Bernstein reported. The biosimilar versions of the drugs, which are used to treat autoimmune diseases like rheumatoid arthritis, have been widely adopted across all of the indications for which they are approved, Gal said. The market leader in biosimilars of Remicade is Celltrion, which sells two versions in Europe. Amgen has lost about 25% of its Enbrel market share to biosimilar maker Samsung Bioepis, according to the report.
The entry of biosimilars in Europe has expanded the overall market for anti-TNF therapies. “The very material market expansion is particularly true in markets where prescribers are directly affected by budgetary pressures,” Gal wrote. “Anecdotally, we have heard that patients are getting higher doses and we interpreted that to mean that therapy was rationed and as costs come down, usage goes up.”
But in the U.S., Gal pointed out, J&J has held onto most of its market share for Remicade largely by negotiating contracts with healthcare providers that are contingent on volume discounts. The company has also bundled the drug with medical devices it sells to hospitals, and it sometimes offers major discounts to infusion centers. The result: Remicade sales in the second quarter were over $1 billion, while the biosimilar Inflectra, marketed by Pfizer and Celltrion, brought in a paltry $23 million.
Pfizer has turned to the courts for help in countering J&J’s aggressive Remicade marketing strategy. In September, Pfizer filed a lawsuit against J&J alleging anticompetitive behavior that undermines the original intent of biosimilar regulations and leads to wasteful spending by the healthcare system.
The market for biosimilar oncology drugs is still in its infancy, Bernstein noted, but early indications show some headway being made by major players like Celltrion and Sandoz. Both companies have introduced biosimilar versions of Roche’s lymphoma drug Rituxan. Despite supply constraints that have hampered the launches of both biosimilar products, Roche reported a 13% drop in Rituxan sales in Europe in the third quarter.
Amgen’s flagship drugs Epogen and Neupogen have been vulnerable to biosimilar competition in Europe since 2008 and 2007 respectively. Biosimilar makers—led by Sandoz and Pfizer—now rule those markets, taking 93% of volume sales for Neupogen and 72% for Epogen.
So what should investors look for in Bernstein’s future reports on the biosimilar market? Two big battlegrounds are taking shape now, Gal notes. Roche’s breast cancer blockbuster Herceptin and AbbVie’s $14 billion per year anti-TNF drug Humira. Samsung and Merck won the first European approval for a biosimilar version of Herceptin in September.
As for Humira, it now has two biosimilar rivals in Europe: Bioepis’s Imraldi and Amgen’s Amjevita, both of which approved there this year. Amgen’s version is also approved in the U.S., but in September, the company reached a patent settlement with AbbVie that will delay the launch of the biosimilar until 2023. That was a relief to investors, who have been fretting over the potential top-line impact to AbbVie of biosimilar rivals to what remains the world’s top-selling drug.
It’s too early to measure the impact on AbbVie of biosimilar versions of Humira in Europe, Gal wrote. But, he quipped, “if you squint a bit you may see some flattening of share gains.”