Hospira continues to forge a new market reality around biosimilars, capturing wide swathes of market share with deep discounts for its biosimilar of Merck's arthritis blockbuster Remicade. Hospira ($HSP) has reportedly captured a public contract in France by offering a price that amounts to a 45% savings.
According to Reuters, the Lake Forest, IL-based company, which is being acquired by Pfizer ($PFE), won a contract from France's Assistance Publique, Hôpitaux de Paris by offering prices that will save the hospital €6 million a year, what it figured was a 45% discount to the popular Remicade. The facility, Reuters said, services about a fourth of the country's population. The news service said it had seen a document outlining the cost.
Executives of Merck ($MRK), which sells Remicade in Europe, said at its Q1 earnings call that it was generally seeing the biosimilars go for 45% discounts. But Hospira offered Inflectra at 69% discount in Norway when it got into a price war there with a supplier that sells a version of the drug made by its partner Celltrion. Originally, analysts had expected that the cost and complexity of making biosimilars would result in discounts of only about 20% to 30% to the reference drug.
Pricing was always seen as key for uptake of biosimilars, which have been available in Europe for some years but which have yet to make an entry into the lucrative U.S. market. Novartis ($NVS) has won FDA approval for the first biosimilar in the U.S., its version of Amgen's ($AMGN) Neupogen, but the Novartis drug has been sidelined by patent litigation by Amgen. The FDA has others under review, including Hospira's drug. Two weeks ago, the National Institute for Health and Care Excellence (NICE), England's price watchdog, included Remicade biosimilars into new guidance for treating rheumatoid arthritis, which stipulates the least expensive drug should be used.
While there are many biosimilars in development, not that many have been approved, leaving analysts to speculate about how the market will shake out. Citigroup analysts have estimated biosimilars will result in at least $110 billion of value being transferred worldwide from innovator companies to copycat producers between 2015 and 2025, Reuters reported. But if payers get accustomed to paying nearly half price, then it may mean biosimilar makers can capture more market share but reap lower sales. Citigroup analyst Andrew Baum has forecast that biosimilars of Humira, the world's best-selling drug, will nab a 36% market share in three years, including 25% of patients who'd already been using the branded drug, and that Humira revenues will decline from a peak $16 billion in 2017 to just $6 billion in 2022.
- read the Reuters story