14. Remicade

Johnson & Johnson, Merck & Co., Mitsubishi
Anti-TNF alpha drug for inflammatory disorders
2015 sales: $5.78 billion
2020 sales: $4.8 billion

Remicade is another of the half a dozen drugs among the top 20 whose sales are expected to be on the downward slope by 2020. But even so, the arthritis treatment is still expected to generate nearly $5 billion in sales. That is despite being badly beaten up by competition from biosimilars in Europe--where it already has lost patent protection--and the prospect of a knock-off hitting the market in the U.S. this year.

Many drug watchers initially assumed that the complexity and cost of making biosimilars, unlike small molecule drugs, would keep their discounts within 20% to 30% of the reference drugs. That was, in fact, the very position taken by Alex Gorsky, CEO of Remicade maker Johnson & Johnson ($JNJ), during the Q2 2015 earnings call. "Remember, biosimilars are not generics and we expect the biosimilar market to behave quite differently than the market typically has toward the introduction of a generic." He told analysts that the company expected doctors to refrain from switching the 70% of Remicade patients well-controlled by the therapy.

But in some European countries, Remicade biosimilars have been deeply discounted as competitors vied for market share against the original and each other. In Norway, a distributor discounted the Celltrion biosimilar of Remicade by nearly 70%, allowing it to grab about 50% of the market in a price war with Hospira, which also has a Remicade copy. Then in France, Hospira reportedly captured a public contract by offering a price that amounted to a 45% savings over Remicade. The result for Merck ($MRK), which sells the drug in Europe, was eye-opening. For the full year, the drug brought in $1.79 billion, down from $2.37 billion in 2014. That's a decline of 24%, or 10% ex-currency effects.

Of course, it is the U.S. market where major money is made or lost in the battle over copies, and it is virgin territory for biosimilars. There is still a question of how well they will be received. But with a favorable vote from an FDA advisory panel, it appears a copy from Pfizer, which now owns Hospira, will hit yet this year, starting the erosion of market share in the U.S. J&J still has moves it can make. The med's key patent is under review and if the company loses, it will certainly appeal that decision, hoping to hold onto its sales as long as possible.  -- Eric Palmer (email | Twitter)

For more: 
FDA vote sets stage for J&J and Pfizer battle over Remicade's $6.5B in sales
Merck treads water in Q4 as Keytruda helps offset Remicade suffering
Deep discounts allow Remicade biosimilar to grab 50% of Norway's market
Hospira's Remicade biosimilar wins large French contract with deep discount
Remicade's U.S. patent rejection could open up early rivalry with Celltrion biosim

14. Remicade