Although biosimilars have been hailed as a cost-lowering tool for expensive biologics, so far they haven’t quite achieved their full potential. But a second biosimilar to Johnson & Johnson’s Remicade (infliximab) that launched in late July may be the first true test — and so far, it looks promising.
After gaining FDA approval in April (SPN 5/17, p. 10), Renflexis (infliximab-abda), a biosimilar Remicade from Samsung Bioepis Co., Ltd. that will be marketed by Merck & Co., Inc., came onto the U.S. market July 24. It joined Inflectra (infliximab-dyyb), another biosimilar Remicade from Celltrion Inc. that’s marketed by Pfizer Inc., which was approved in April 2016 (SPN 4/16, p. 1) and launched this past November (SPN 12/16, p. 5).
When Inflectra launched, it had a wholesale acquisition cost that was 15% less than Remicade’s WAC — or $946.28 per 100 mg vial vs. $1,113. But when Renflexis came onto the market, it did so with a WAC 35% less than that of Remicade, or $753.39. A few weeks before the launch, Pfizer updated the payment allowance limit for Inflectra’s average sales price (ASP) — which takes into account rebates and discounts — to be $753.40, effective July 1 through Sept. 30, Pfizer spokesperson Thomas Biegi tells AIS Health. Its WAC is now 19% below Remicade’s.
Asked to comment on the pricing, Lynn Nishida, area vice president of pharmacy at Solid Benefit Guidance, tells AIS Health that the “big event is the fall that occurred with Inflectra’s ASP price. This is what was needed to incentivize payers to consider biosimilars relative to Remicade. Payers generally reimburse providers on an ASP + rate. When the first biosimilar comes to market, the ASP of the first biosimilar mirrors WAC [and] can be much more expensive than the reference product’s ASP. Therefore, until the ASP drops for the biosimilar, which usually takes about one to two quarters, payers are challenged in embracing the biosimilar, which is more costly.”
J&J Contracting Has Helped Hold Off Inflectra
Biegi tells AIS Health that “We have seen significant interest among health care professionals and pharmacy & therapeutic committees, based on Inflectra’s robust clinical data package and extensive real world experience. We have also achieved rapid uptake within integrated health care systems where the insurer and provider are the same, such as the VA. And we’ve seen the potential for significant value within Medicare where there is 100% coverage of Inflectra for patients.”
However, in an Aug. 1 research note, Umer Raffat, senior analyst, equity research at Evercore ISI, commented that Johnson & Johnson’s “pursuit of exclusionary contracting with insurers/providers has held off rapid uptake of Inflectra from commercial plans,” so “penetration is difficult here.”
Biegi agrees. “Our lower priced product has not received access at parity to Remicade and remains in a disadvantaged position despite recent price increases of Remicade.â€¦Pfizer is actively working on a range of commercial and other strategies to help make Inflectra accessible to more patients, and also to lay the groundwork for a smoother, more rapid uptake of all future biosimilars in the U.S. marketplace.”
Although “Remicade is still the market leader,” notes April Kunze, senior director, clinical formulary development & trend management strategy at Prime Therapeutics LLC, she agrees that “additional biosimilar approvals in this category will likely continue to reduce the cost of therapy given the increased competition.”
Because these drugs are infusibles and are reimbursed under the medical benefit, as far as marketing the biosimilars, Merck and Pfizer will “work with various providers to secure rates and drive market share.” Also due to their medical benefit placement, “plans have varying strategies for coverage,” she notes. Kunze tells AIS Health that “Given they have biosimilarity designation, Prime views them as comparable to the originator product (Remicade); therefore, pricing is the main consideration.”
According to UnitedHealthcare’s July 2017 Network Bulletin, that plan prefers Remicade over the biosimilars, both of which require prior authorization. “Coverage reviews may include evaluation of the site of service, if requested in an outpatient hospital setting. If coverage is not approved, you and your patient may decide to switch to Remicade, our preferred infliximab product, and/or transition services to an alternate site of service in order for the patient to continue benefit coverage.”
It’s interesting to note that Merck launched the drug sooner than expected — that is, before 180 days had elapsed after its FDA approval. How long a biosimilar had to wait to launch after approval has been one of the uncertainties from the Biologics Price Competition and Innovation Act of 2009 (BPCIA). While it established the 351(k) abbreviated approval pathway for biosimilars, it left a lot of the details unanswered.
This issue was one of the focuses of a lawsuit (No. 15-1309) between Sandoz Inc. — manufacturer of Zarxio (filgrastim-sndz), the first FDA-approved biosimilar — and Amgen Inc., which manufactures its reference drug, Neupogen (filgrastim). The suit has been making its way through the court system since 2014, finally landing in the U.S. Supreme Court earlier this year (SPN 2/17, p. 12).
On June 12, the court ruled that biosimilar companies did not need to wait until their product gained FDA approval to give 180 days’ notice to the reference drug manufacturer of their intent to market their drug (SPN 6/17, p. 1). While the other two biosimilars already on the market waited 180 days post-approval to launch (SPN 9/15, p. 8; 12/16, p. 5), Renflexis did not, meaning that Merck gave Johnson & Johnson at least two notices of commercial marketing in the hopes that the court would rule this way and do so before the 180-day mark.
A couple of days after the court made its decision, Gary Levin, partner at Baker & Hostetler LLP, maintained that an early notice from Merck was “certainly a possibility.â€¦Why not get the clock running?” Neither Merck nor Samsung would comment on that at the time.
Two other biosimilars have been approved but are embroiled in patent litigation: Erelzi (etanercept-szzs), a biosimilar Enbrel (etanercept) from Sandoz, approved in August 2016 (SPN 9/16, p. 9), and Amjevita (adalimumab-atto), a biosimilar Humira (adalimumab) from Amgen, approved in September 2016 (SPN 10/16, p. 6). When they finally do launch, they will be competing with other anti-inflammatories, the same as Remicade, Inflectra and Renflexis do. That therapeutic class is consistently at the top of PBM rankings by specialty drug spend, which could give payers some relief.