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Pharmaceutical Pricing Wars Have Begun

By: | Tags: | Comments: 0 | August 21st, 2017

In a bold move, Merck & Co., Inc., recently launched Renflexis, a biosimilar to Johnson and Johnson’s well-known Remicade. Merck is an American pharmaceutical company based in Kenilworth, New Jersey, however, Renflexis was developed by the Korean drugmaker, Samsung Bioepis. Merck has announced the price for their biosimilar at a 35% discount compared to Remicade’s wholesale acquisition cost.

 

Setting the price of Renflexis this low in the U.S. market appears to be creating quite a stir in the pharmaceutical market. Especially after Pfizer Inc., in partnership with Celltrion, launched the Remicade biosimilar, Inflectra, late last year at a 15% discount here in the states. Since Inflectra’s launch, its availability has been somewhat limited, however, Pfizer has reported about $17 million in sales during the first quarter of 2017.

 

The Price of TNF Alpha Inhibitors

 

Pfizer and Johnson & Johnson have not officially disclosed the price of their tumor necrosis factor, or TNF, inhibitors. Despite this, patients have disclosed that the average price for Remicade is more than $30,000 each year. Naturally, this estimation varies based on a patient’s weight and age.

 

Using this scale to compare, Pfizer’s Inflectra is about $25,500 or 15% of Remicade’s average price. Merck, on the other hand, has been very forthright with the price of their anti-TNF product. Merck announced that Renflexis will be introduced in the U.S. at the wholesale acquisition cost of $753.39. This price tag does not include possible discounts that may be applied.

 

According to Dora Bibila, the general manager at Merck Biosimilars, “Merck looks forward to launching RENFLEXIS in the United States to help meet the needs of patients, physicians and payers”. Bibila went on to say that “As a global health care leader, Merck believes that biosimilars have the potential to help increase access to these important medicines while also providing savings for the health care system.”

 

With the addition of Renflexis and Inflectra to the marketplace, Johnson & Johnson will have to compete with cheaper biosimilars to stay viable. Hopefully, this will help to drive down the cost of TNF Inhibitors over time. This long-term estimate is primarily due to the fact that biosimilars take more time than generics to be used as a replacement for name brands. For patients, this means it is not going to be as simple as going to the doctor and asking for the prescription name.

 

Biosimilar Drugs

Biosimilars are different than generic versions. In general, biosimilars are manufactured using a more complex and rigorous process than generics. Due to this and the following traits, biosimilars take more time for patients to access them than generics do.

 

Biosimilars

  • Officially approved version of original drug
  • Only made when original patent expires
  • Allowed to reference the original product
  • Constructed to have a similar molecular pattern to the original
  • May have structural variations
  • Tested more with large clinical trials

 

In addition, the less strenuous process for making a generic prescription drug typically reduces the price of the product. This common manufacturer trait makes it possible for pharmaceutical companies to offer generics at a much lower rate. On average, generics are frequently available between 20-25% of the original product.

Generics

  • Use the same active ingredients with similar amounts and proportions
  • This process can have an effect on the shelf-stability, purity,  absorption and time-release rate
  • Generics are manufactured with a simple, well-defined structure
  • Predictable chemical process to make identical copy
  • Tested less with small clinical trials

Infliximab Biosimilars

To date, countries around the world receive discounts between 50-70% on many of the available infliximab, also known as Remicade, biosimilars. In America, however, we have barely begun to encroach upon these steep discounts. With Merck’s bold 35% discount and the average discount on infliximab biosimilars around the world, it is clear that the pharmaceutical pricing wars in America have finally begun.

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