At Senate hearing, pharma shows split on biosimilars
- Executives from seven pharmaceutical companies arrived on Capitol Hill on Tuesday presenting a united front on drug pricing to the Senate Finance Committee. Some cracks emerged, however, in how eager officials were to see the government encourage adoption of biosimilars.
- Only a handful of biosimilars have launched in the U.S., compared to a more established market in Europe, and to mostly tepid sales. Merck & Co. and Pfizer, makers of two of the longest-selling biosimilars on this side of the Atlantic, shared with lawmakers their frustrations at competitive challenges that have slowed uptake.
- J&J, by contrast, made the case for the status quo. "When it comes to making more biosimilars available for patients and their physicians, competition, not government intervention, is the best approach," said J&J pharma chief Jennifer Taubert in her written testimony. "And that approach is working."
Pharma's debate over biosimilar policy isn't a theoretical one. J&J is currently staving off biosimilars from Merck and Pfizer that copy its blockbuster inflammatory disease drug Remicade (infliximab).
So far, it has largely been effective at that task, even as other competition crimped sales of the blockbuster therapy in the U.S.
Pfizer was first to launch a Remicade biosimilar in the U.S., debuting Inflectra (infliximab-dyyb) in October 2016. Merck entered the market with its Renflexis (infliximab-abda) a little less than a year later. While neither were discounted to levels seen in generic markets, both were priced at a healthy discount to Remicade's wholesale acquisition cost.
"We share the concerns expressed by FDA Commissioner Gottlieb regarding the challenges biosimilars have experienced in penetrating the market," said Merck CEO Ken Frazier in written testimony. "Merck introduced a biosimilar to the market 18 months ago at a 35 percent discount to the originator product, yet we have captured only a tiny fraction of the market," he added, referring to Merck's Remicade copy.
Pfizer CEO Albert Bourla painted a similarly gloomy view, highlighting the divergent success the company has experienced in open systems managed by a pharmacy benefit manager versus closed systems like Kaiser Permanente's.
"Unfortunately, adverse incentives that favor higher-cost originator biologics are keeping biosimilars from reaching patients," said Bourla in written testimony.
"I can't think of a more concerning example of a broken U.S. healthcare system that is directly impacting the pocketbooks of Americans."
Pfizer's frustrations led it to sue J&J for anti-competitive practices, alleging exclusionary contracting with PBMs and insurers to keep biosimilars out. Last quarter, sales of Inflectra reached $70 million in the U.S., a far cry from J&J's earnings of $843 million. Merck didn't break out sales of Renflexis for the fourth quarter.
When pressed for potential solutions at Tuesday's hearing, Merck's Frazier called first for Congress to help reduce patient costs.
"It would be very helpful if we could relieve patients of their obligation to co-pay for the cheaper biosimilars," Frazier said.
"We also have to look at the incentives as it relates to ASP+6," the CEO added, referring to how doctors are reimbursed the average sales price of a drug administered under Medicare Part B plus 6% of that drug's cost.
J&J, which has fought Pfizer's allegations, argued against further government policies.
"Some stakeholders have called for government to drive uptake by creating further incentives for biosimilars," said Taubert in written testimony.
"But policies designed to increase share for biosimilar manufacturers would distort the competitive environment and risk limiting the savings biosimilars deliver to patients and taxpayers."
Remicade's not the only billion-dollar biologic at stake in the U.S. The Food and Drug Administration has sought to clear more biosimilars for sale.
Unlike the generic market, increased biosimilar competition is more likely to pit pharma against pharma as the country's top drugmakers battle for market share for the higher-margin copycats.
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