Manufacturers of originator biologics may agree to rebates and exclusive coverage arrangements with payers to get their products onto US formularies. Critics of such agreements argue they lead payers to stick with originator products, even when lower cost biologics come to market.
Albert Bourla, CEO of Pfizer, is one of the vocal critics of the practice.
Talking to investors on Pfizer’s third quarter conference call, Bourla said, “[Payers] are trapped and they cannot [cover biosimilars] because they are going to lose the benefits of the rebates that the originator is offering. Unless we resolve this big issue, we will never be able to see tremendous progress on biosimilars.”
Pfizer has been at the forefront of efforts to reform rebates, going as far as to file a lawsuit against Johnson & Johnson in 2017. The lawsuit accused J&J of using anti-competitive practices to insulate its autoimmune blockbuster Remicade (infliximab) from the threat of Pfizer’s biosimilar, Inflectra.
The legal dispute is ongoing and was brought back into the spotlight earlier this year when the US Federal Trade Commission began investigating whether J&J’s Remicade contracting practices violated antitrust laws.
Bourla thinks the issues Pfizer raised in its lawsuit are starting to get the attention of people who may have the power to address its concerns with the current system.
Pfizer’s CEO said, “This is something, I think, that the political world is understanding. This is something that we are very vocal about it. This is something that we are discussing constantly with payers, who want to move to new solutions, but cannot. And I think that there is positive momentum.”
While Bourla thinks the US biosimilar market will be stunted until practices change, Pfizer’s nascent portfolio of off-patent biologics is starting to gain traction. US sales of Pfizer’s biosimilars increased 59% over the first nine months of the year.
This increase was driven by the launch of cancer drug Retacrit (epoetin alfa), a biosimilar to J&J’s Procrit, which generated sales of $86m (€77m) over the first three quarters of 2019 by taking a 16% share of the market. US sales of Inflectra increased 10% to $209m over the same period.
Bourla framed the faster ramp up of Retacrit sales as, in part, a consequence of differences between the oncology and autoimmune markets.
Patients stay on autoimmune drugs such as Remicade for a long time, limiting opportunities for biosimilars to win market share, unless originator biologics and copies are treated interchangeably. In oncology, in contrast, new patients make up a much higher proportion of the population, creating more opportunities for payers and physicians to choose biosimilars over originator biologics.