Johnson & Johnson has kept a positive attitude about its blockbuster immunology drug Remicade and the biosimilar competition it’s facing. That optimism just got tougher to maintain—and believe.
Samsung Bioepis won FDA approval late Friday for its Remicade substitute, Renflexis (infliximab-abda), becoming the the second biosimilar to threaten that brand in the U.S. Not an unexpected event, and the launch isn’t expected until October because of biosimilar rollout rules.
But six months pass quickly in the pharma world, and analysts see the second biosim emboldening payers to press for bigger rebates and pushing the three contenders to get more aggressive about winning share—or protecting it, as the case may be.
Add into the mix the fact that Merck & Co. has marketing rights and the rivalry looks even more interesting. Soon, Remicade will have companies experienced on both sides of the biosimilar-brand competition making a run at its U.S. sales.
Merck, of course, owns Remicade marketing rights outside the U.S., including Europe, where the U.S.-based drugmaker has suffered rapid declines in that brand’s sales since biosims entered the market. It’s well acquainted with the potential for a biosimilar market-share steal, and at a rate unanticipated when the alternative meds launched.
Pfizer, on the other side of the EU coin, boasts one of those launches. Its Hospira unit rolled out a Remicade biosim in the region last February, and it’s been siphoning off brand sales ever since, sharing those gains with Celltrion and its co-marketed product, as well as Samsung’s version, called Flixabi in the EU, which launched last May. In the U.S., Pfizer rolled out its biosim, Inflectra, in December.
So, to sum up, J&J will soon have two head-to-head rivals for Remicade in the U.S., and those two biosims will be jockeying against each other for their pieces of the pie—intensifying the competition against Remicade in the process.
As Bernstein analyst Ronny Gal pointed out in an investor note, the Renflexis launch, expected in October, would be in time for Merck to negotiate with payers for 2018 formulary positioning. What happens these days when payers have several choices among similar meds? They put the squeeze on for discounts.
Now, when J&J announced its first-quarter results last week, CFO Dominic Caruso said the company hasn’t suffered much from Pfizer’s Remicade biosim. Compare the brand’s sales to consensus expectations, and you’ll see that the biosim hasn’t eroded Remicade as much as expected; though branded sales slid a bit—2.4%—they still beat consensus by more than $70 million, Credit Suisse analyst Vamil Divan wrote last week.
Still, that’s generally considered a temporary affair. With Renflexis’ launch, the gloves are likely to come off.
“J&J noted limited impact of biosimilars so far. This is true, primarily as first launcher Pfizer smartly initially focused on accounts which are less important to J&J,” Gal wrote. “However, with second biosimilar entering, we expect the market to shift to more of a land grab approach coupled with sharper price declines.”