Pfizer hasn't gained much market share with Inflectra, its biosimilar of Johnson & Johnson's Remicade, since its U.S. launch back in 2016. The company's CEO Ian Read recently said Inflectra is picking up increased commercial coverage, but an analyst figures the biosimilar's challenges aren't likely to let up this year.
Speaking to analysts on the company's fourth-quarter conference call, Read said his company continues "to see increased coverage for Inflectra amongst commercial payors." In a note Friday, Bernstein analyst Ronny Gal wrote that his team looked into 2018 formularies and found that they "have not materially changed with nearly half the market blocking or step-editing biosimilars."
"Our analysis shows that biosimilars made very little inroads in medical benefit formularies which control the product choice for the vast majority of patients," Gal wrote in a note on Friday.
Remicade is the only covered or preferred product for nearly half the lives in the analysis, according to Gal. That boosts J&J's leverage because it can decide not to provide a "volume discount unless the provider uses its product for the other half of the volume," the analyst wrote.
In all, even though two biosims are on the market now—the second from Merck & Co. and Samsung—Gal and his team predict Remicade copycats will end 2018 capturing about 10% of the market's total revenue, with J&J's originator continuing to dominate.
Pfizer reported $118 million in 2017 sales in the U.S. for Inflectra, compared to Remicade's $4.5 billion. Remicade's sales slipped 6.5% in 2017 versus the prior year as the company continues to defend against the competition.
In a reaction to J&J's strategy, Pfizer sued it last year, arguing its exclusive contracts are "anticompetitive" and that the situation is unlikely to change unless a court intervenes. J&J argued that Pfizer isn't offering enough value in the market to compete.
Despite the challenges, Pfizer executives outlined some positive points for Inflectra on the conference call. The drug had "continued strong performance in closed systems, such as the VA where the insurer and provider are the same entity," Read said.
In such closed systems that "prioritize healthcare savings over short-term rebating," Inflectra has reached 50% market share, Pfizer's Innovative Health president John Young added.
"We really believe that our performance in those closed systems demonstrates that where payers, providers and patients have access to Inflectra that it can offer significant value to the healthcare system," Young said. The drugmaker will continue working "aggressively" in that area, he said.