biopharm insights biosimilar expert article march 2016
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Download our mobile app! Published 2016-03-17 Proprietary Intelligence
Pfizer/Celltrion's Remsima biosimilar toface rough 30-40% price cut versus J&J'sRemicade - experts
Minimal price discounts will probably be matched by J&J
Payer contracts for biosimilars likely limited to 6-12 months
State prescribing laws could affect Remsima uptake
Pfizer (NYSE:PFE)/Celltrion's (KOSDAQ:068270) Remsima, a biosimilar of Johnson &
Johnson's (NYSE:JNJ) Remicade (infliximab), will likely face a tough pricing environment,
experts said. They noted a 30-40% biosimilar price discount to the originator is possible,
alongside multiple contracting strategies to attempt a market advantage.
Experts debated Remsima's likely formulary tier positioning, noting payer caution may prevent
an immediate long-term agreement. They added treatment-naïve patients would likely be the
first Remsima starters, whilst payers will require safety and efficacy data prior to treatment
switching. They also debated the impacts of prior authorisation (PA) restrictions on the
innovator, and potentially Remsima, for patient access.
This news service reported on 3 March that Remsima will likely be FDA-approved with full
extrapolation of all the originator's approved indications, including inflammatory bowel disease.
An FDA advisory committee (AdCom) panel voted 21-3 in favour of Remsima's licensure for all
Remicade indications, according to a 9 February press release.
Pfizer and Celltrion did not respond to requests for comments. A J&J spokesperson said the
company cannot speculate on potential US pricing for an infliximab biosimilar. She added list
prices of reference products are not necessarily representative of the price paid by payers or
providers.
Pricing war expected
Insurance companies will likely pressurise physicians to start patients on the most cost-
effective treatment and, as a biosimilar, Remsima is expected to be substantially cheaper than
Remicade, said Dr Maria Abreu, chief, Division of Gastroenterology, University of Miami,
Florida.
Remsima is selling at a 60% discount to Remicade in Norway and Denmark, and US payers will
likely use this as leverage in pricing negotiations, said Charles Shasky, CEO, Biotechnomics,
Ashland, Virginia. However, that benchmark is unrealistic due to the US' limited biosimilar
availability, agreed Allen Dunehew, president, RQ Global Pharma Strategies, Wildwood,
Missouri and another pricing/reimbursement consultant.
However, Shasky and the consultant agreed a 35-40% discount alongside preferred formulary
status is feasible. A 30% price discount is reasonable to expect, said Anita Burrell, founder of
her New Jersey-based eponymous consulting firm, referencing EU biosimilar prices.
Dunehew explained he would be unsurprised if biosimilar developers initially attempted to
negotiate 15-20% discounts to the originator. But the originator will readily match that price to
maintain market share, he said, thus pressurising biosimilar makers to offer greater price
discounts.
Shasky and the consultant explained Pfizer could be amenable to steeper discounts for
Remsima if it secures preferred formulary access, alongside additional discounts -- the
"market basket" approach -- to its other therapies. Likewise, J&J could adopt this tactic to
ensure Remicade's preferred status, they said. The consultant noted J&J is well-known to
have established payer contracts. Insurers must consider how selecting a biosimilar over an
originator could mean losing negotiated rebates in other product groups, he said.
Whilst Burrell agreed, she added market basket approaches can cause legal price-fixing
issues.
Regardless, both the originator and biosimilar manufacturers will investigate future biosimilar
pipelines, which will factor into their contract length to lock out competition, Shasky said. The
consultant noted 6-12 months is an appropriate contract length for payers, as the lack of
biosimilar experience could create payer caution over long-term agreements. Thus, both
products will likely be on formularies initially so payers can determine preference, he said.
Remicade and Remsima are administered intravenously, typically placing them in the medical
benefit model where patients pay co-insurance, said the consultant. However, approximately
30-40% of Remicade falls under a prescription where formulary tiers and patient co-pays
come into play, the consultant said.
For traditional formularies, both Remsima and Remicade will be on tier 3 - expensive branded
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drugs discouraged by payers - with a copay of USD 150-200 a month, the consultant said. If
there are specialty tiers, co-insurance would be about 20% of the total drug cost, he said.
Remicade is covered by most insurance plans, including commercial insurers, Medicare and
Medicaid, the J&J spokesperson said. For eligible Remicade patients with commercial
insurance, the company offers a co-pay card to cover the cost of each infusion, reducing the
patient out-of-pocket cost to no more than USD 5 per infusion, she said.
Yet, Burrell argued, Remsima will likely be placed on tier 2 - brand name drugs or expensive
generics -- whilst physicians gain sufficient confidence of originator similarity to encourage tier
1 - the lowest cost drugs -- positioning around three years later. The nonunanimous FDA
AdCom panel vote demonstrates biosimilar use hesitancy, said Burrell.
Market uptake
Switching patients onto Remsima depends upon reimbursement, said Dr Vibeke Strand,
adjunct clinical professor, Division of Immunology/Rheumatology, Stanford University,
California. Providing noninferiority is demonstrated postmarket, physicians should readily start
new patients on Remisma, however, treatment switching concerns persist, said Abreu.
This news service reported 11 June that some rheumatologists were concerned over
insurance companies mandating biosimilar switching despite treatment success with brand-
name medication.
The J&J spokesperson noted that as discussed at the FDA AdCom, Celltrion is not seeking an
interchangeable designation for Remsima. This means if the biosimilar is approved by the
FDA, it cannot be substituted for Remicade, she said. Interchangeable status is a process
involving switching studies among other requirements, she added.
Shasky, Dunehew and the consultant agreed, especially in Remsima and other biosimilars'
early roll-outs, that naïve patients will most likely start on the biosimilar versus the originator.
Dunehew and the consultant noted once marketplace experience is sufficient -- between 6
months to 1 year to show biosimilar safety and efficacy -- payers will begin formulary
adjustments to take advantage of the market dynamics between the originators and
biosimilars.
Biosimilars are not considered interchangeable, therefore pressure will likely be weighted
towards starting new patients on Remsima, rather than switching current ones, said Burrell.
Remsima's adoption amongst Remicade patients could depend upon individual state
prescribing laws, Shasky and the consultant said. In certain states, pharmacies must notify
prescribers if a patient could be amenable to a less costly biosimilar, Shasky said. Others
states, like California, have less patient-friendly drug prescribing laws so physician/patient
notification of biosimilar options may not be an option, he said.
It's possible US rheumatologists, dermatologists and gastroenterologists will mistrust Remsima
due to scepticism regarding its risk/benefit profile relative to Remicade, said Dr Gilberto
Castaneda-Hernandez, investigator, Department of Pharmacology, CINVESTAV-IPN, Mexico
City, Mexico. Shasky argued, however, the lure of a biosimilar without a brand's PA
requirements is meaningful. Physicians dislike PA paperwork and time commitments, therefore
a payer strategy facilitating a biosimilar, easing the PA process, could be attractive, agreed
Dunehew and Shasky. However, the consultant noted the biosimilar will likely have the same
PA as the originator product, as they are both biologics and payers want to ensure appropriate
use. PAs and step-edits are inconvenient and slow prescriptions, however, physician
persistence ensures prescriptions go ahead, said Burrell.
Pfizer's market cap has a market cap of USD 176.3bn. Celltrion's market cap has a market cap
of KRW 12.5tr. Johnson & Johnson's market cap has a market cap of USD 295.8bn.
by Jennifer C. Smith-Parker and Alexandra Thompson in London, and Alissa Fleck in New York
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