FAIR PLAY: Could a Blockbuster Drug Bust Competition?


FAIR PLAY

Antitrust deciphered

Pfizer

If Johnson & Johnson gets its way, the market for near-copies of complex biotech drugs could be curtailed. At least that’s the perspective of Pfizer Inc., which is using this argument in a first-of-its-kind antitrust lawsuit against J&J, filed last month.

Pfizer is embarking on new territory by testing the contract terms for promising new biologic drugs that are expensive to make and expensive to replicate. There are only three “biosimilar” drugs out now, and just seven have gotten approval from the Food and Drug Administration. But health care practitioners say those are just the beginning of many possible medical breakthroughs.

Pfizer is setting the stakes high. If the judge in the U.S. District Court for the Eastern District of Pennsylvania sides with J&J, Pfizer officials told Bloomberg BNA the value of biosimilars could be limited, potentially cutting off market opportunities for cheaper versions of potentially life-saving drugs.

In its suit, Pfizer claims J&J sought to preserve a monopoly for its rheumatoid arthritis drug Remicade by scheming to ensure that similar, lower-priced drugs wouldn’t become viable competitors. Pfizer’s biosimilar version of Remicade, called Inflectra, has been unable to capture a sizable market share, the company argues, because J&J bullied insurers into not covering drugs offered by competitors.

Pfizer says J&J has used exclusive contracts, requiring insurers and providers to cover only Remicade, to shield one of its most profitable drugs from competition.

J&J has some wiggle room because exclusive contracts are not on-their-face illegal. Pfizer has to prove that the contracts unlawfully shut competitors out of the market. J&J says competition does exist in the market, and it’s brought down costs of Remicade. Pfizer, it argues, has “failed to demonstrate sufficient value [of Inflectra] to patients, providers, payers, and employers.”

If the dispute goes to trial, J&J could argue that Inflectra shouldn’t be covered because it’s not interchangeable with Remicade. These aren’t the exact same drugs, so there’s not automatic substitution, the company might say.

This week, we could gain more insight to how J&J plans to defend its exclusive contracts as the deadline for the company to file a response approaches. But it’s not uncommon for defendants in complicated cases like this to request an extension to respond.

Plenty of drug companies have biosimilars in development that they think will be big sellers, and not just for arthritis drugs. They say the biosimilars market will skyrocket, at least as long as there’s a window for them to join in and compete.

What’s Happening This Week

Trial in the exclusive dealing case between wireless headset makers GN Netcom Inc. and Plantronics Inc. is set to begin in Delaware federal court on Wednesday. GN Netcom claims Plantronics has unlawfully abused its monopoly power to foreclose competition.

Quote of the Week

“Thanks to the leniency program, companies have strong incentives to review their activities, root out illegal anticompetitive conduct, and report criminal conspiracies,” said Deputy Assistant Attorney General Roger Alford, speaking to regulators in Brazil. “Their trust in the fair enforcement of our leniency program is a key factor in our ability to detect and deter criminal activity.”

[This blog has been corrected to reflect the correct number of FDA-approved biosimilars on the market.]

Want to be alerted to the next post? Let us know and you’ll be added to the mailing list: lcrampton@bna.com. Also feel free to send tips and takes.