Two versions of Remicade (infliximab) have entered the US market in the past twelve months, but so far J&J has seen limited erosion to sales of its top-selling monoclonal antibody, despite predictions of an initial 20% plus decline.
At this week’s Morgan Stanley Global Healthcare, CFO Dominic Caruso was asked why the “dramatic amount of fear and loathing about biosimilars” has not materialised.
“We had estimated around 10% to 15% and investors were asking us: ‘are you sure? Look at what biosimilars did in Europe, etc.’ And we felt pretty confident that the erosion in biosimilars would be relatively minor.”
Nearing a year after Pfizer’s Inflectra was launched, US Remicade sales have dropped by just 5%. Caruso put this down to his firm’s portfolio of products in Managed Care which allowed it to do “a pretty good job of contracting for Remicade well in advance of the biosimilar entry from Pfizer,” as well as natural barriers to biosimilar adoption.
“One is that there is no interchangeability,” he told investors, and while the US FDA has called on industry to comment on draft guidelines, there is no guidance and none of the seven biosimilars approved have been approved as interchangeable.
Secondly, Caruso said the majority of Remicade patients are content with their treatment and the only reason to switch would be due to an economic incentive – something biosimilar infliximab makers have yet to have capitalised on.
Inflectra was launched at a 15% discount on the wholesale acquisition cost (WAC) price of the reference product, while Samsung Bioepis and its partner Merck & Co. launched its version – Renflexis – launched in July at 35%.
“Relatively speaking, the economic incentive is small,” Caruso said. “With Remicade being in the market already for many, many, many years, the way rebates go in the pharmaceutical market, we’re already there. So there is really no real incentive to that.”
Thirdly, about 50% of Remicade patients are using it for gastrointestinal indications that Inflectra is not approved to treat, he said.
“So all those factors combined has contributed to what we certainly expected, which is a very gradual slow erosion of Remicade even more gradual and more slow than any of us had anticipated.”
Pfizer slugging it out
Speaking at the same conference Wednesday, Pfizer’s CFO Frank D'Amelio said that while the $130m of Inflectra sales for the last quarter represented a 63% growth month-on-month, uptake is slow, though not due to the discounting strategy.
“It almost didn't matter what [discount] we launched it at. But you realise, you're coming out first, you're launching the product, you want to launch it at a place where you give yourself room to rebate. But you also want to launch it in a place where after rebate, you're still generating a healthy margin.”
Pfizer has around 2% of the market share at the moment, and D'Amelio accredited J&J’s actions defending Remicade’s market share as a major reason behind the slow uptake.
However, he remained positive saying the entry of the second infliximab biosimilar will help Pfizer to negotiate with payers – “because volume matters” – while physicians will “get more comfortable” with prescribing biosimilars.
“We remain very bullish on biosimilars,” he added. “But I call it, we're going to slug it out for a while, but over time, I think it's going to perform very well.”
Correction: The original article said Inflectra was not approved to treat Crohn's Disease. The FDA approved Inflectra across all eligible indications. However, the FDA cannot license any proposed biosimilar product with an indication for pediatric ulcerative colitis until Remicade’s [the reference product] orphan drug exclusivity expires.