Pfizer anti-trust case could change biosimilar landscape

An antitrust case by Pfizer that will be heard in 2018 could have major implications for generic pharma law and a profound effect on the marketplace for biosimilar drugs.

At the end of 2016, Pfizer began to market its biosimilar rheumatoid arthritis drug, Inflectra, which it priced up at 15 percent less than the drug Remicade, for which it is a generic replacement. Remicade’s wholesale price is $4,000 per dose, and Pfizer hoped to attract insurers who were looking to reduce drug costs.

But a year on, Inflectra has had little success and Pfizer is fighting a legal battle against its rivals, alleging that they have engaged in exclusionary contracts to prevent lower-priced generic competition. The case has been filed at the US District Court against the manufacturer of Remicade, Johnson & Johnson, and Janssen Biotech, and will be decided during 2018. The verdict is likely to have significant repercussions for the biosimilar market.

Biosimilars are expensive to produce, and don’t bring about the same dramatic price drop that is often seen when a standard generic drug hits the market, but they are cheaper than the biologics on which they are based. Many health experts believe biosimilars can bring down the cost of complex drugs, such as those used for rheumatoid arthritis, and any practice which affects the biosimilar market will be viewed with concern by health policy makers.

The core of Pfizer’s case is the issue of rebates. Manufacturers offer these discounts on the price of drugs to ensure they remain on insurers’ lists, and the argument from both insurance companies and pharmacy managers is that these rebates help to keep health care spending costs down. But Pfizer is claiming that the rebates are being used as a weapon to keep biosimilar drugs off insurers’ lists and limit their impact in the market place.

Pfizer’s claim is that soon after they gained approval from the Food and Drug Administration for Inflectra, Johnson & Johnson began to ask insurers and pharmacy managers to sign new contracts that prevented them from buying the biosimilar. Those who refused faced the loss of rebates from the company, which for some insurers could be worth millions of dollars.

Johnson & Johnson have defended their contracts and the use of rebates, claiming that they help to reduce costs. But Pfizer point out that since Inflectra was approved, the cost of Remicade has increased by nearly 9 percent.

The case will be heard later in the year and is certain to have major ramifications both for the fledgling biosimilar market and for established pricing and rebate practices.

CONTENT SPONSORED BY

WSGR_HORIZ_CMYK2

In today’s fast-growing, highly regulated generic pharmaceutical market, companies increasingly require specialized legal guidance as their products are developed, launched, and litigated. Wilson Sonsini Goodrich & Rosati’s attorneys address this need by providing expert counsel to companies in the global generics industry, offering sophisticated representation far beyond the scope of general corporate and securities counsel.

We have assembled a highly experienced team of experts from a cross-section of the firm’s key practice areas, including intellectual property, litigation, antitrust, FDA/regulatory, technology transactions, exports and FCPA, trade secret, and trademark and copyrights. Led by the former chief legal officer of Mylan Pharmaceuticals, one of the world’s leading generic and specialty pharmaceutical companies, our attorneys work closely with our generic pharmaceutical clients’ legal and scientific personnel and senior management to understand and meet their specific needs both in the U.S. and abroad.