J&J may suffer over AbbVie,Amgen in renewed biologic USpayer contracts as Celltrion’sbiosimilar loom

• Remsima use may be forced ahead of Remicade, but not Humira or Enbrel

• Celltrion needs to emphasize Remsima clinical comparability to innovator

• Low uptake expected in GI indications if Remicade label not fully extrapolated

Johnson & Johnson (NYSE:JNJ) may struggle more than AbbVie (NYSE:ABBV) and Amgen (NYSE:AMGN) in renewed US pricing contracts for biologics as biosimilars enter the market, experts said. All candidates are likely to soon face tougher payer negotiations, particularly with the expected market entry of Celltrion’s (KOSDAQ:068270) biosimilar Remsima, they added.

Compared to AbbVie’s Humira (adalimumab) and Amgen’s Enbrel (etanercept), Johnson & Johnson’s (J&J) Remicade (infliximab) could face a greater challenge in retaining market share considering its intravenous route of administration, they said. Still, J&J may have a slight reprieve if the FDA does not allow Remsima full label extrapolation of Remicade, they added.

This news service recently reported an FDA regulatory nod is expected for Remsima, anticipated for August 2015. The product is the first monoclonal antibody (mAb) application to undergo the US biosimilar pathway, and the second drug filed under the pathway, according to a release.

Johnson & Johnson may struggle more than AbbVie and Amgen in renewed US pricing contracts for biologics as biosimilars enter the market...

Pricing and contracting strategies

While Remicade may not be the preferred first-or second-line biologic in rheumatoid arthritis (RA), it generated revenue of nearly USD 4bn in the US last year and was the third-biggest selling drug globally, said Kate Keeping, UK-based senior director of biosimilars research at Decision Resources Group. There is an expectation of minor cross-brand erosion to Humira and Enbrel once there are infliximab biosimilars, but the vast majority of patient share will be captured from Remicade, Keeping and a US reimbursement consultant agreed.

The majority of market share has been shifting between Enbrel and Humira and relative cost is part of that shift, said a second US drug consultant. Whether or not payers decide to replace the branded products with biosimilars will depend upon their view of the safety and efficacy combined with the savings opportunity, he added.

In general though, payers will particularly use biosimilars in the RA class as Remicade, Enbrel and Humira were in the top 10 drug costs in 2013, said Rhonda Greenapple, founder, New Jerseybased reimbursement consultancy Access First.

If Celltrion offers an agreeable price to payers, step therapy that forces Remsima use ahead of Remicade is likely, but is significantly less likely to be applied to other anti-tumour necrosis factors (TNFs) alphas such as Enbrel and Humira, according to payers Decision surveyed this year, Keeping noted. This is because Remicade has additional costs as an office-administered product versus self-injectable Humira and Enbrel, the first consultant and Greenapple agreed.

Remicade is the “big loser” in terms of market share versus the biosimilar, as well as versus Humira and Enbrel, due to its additional office costs, the first consultant said.

All three drug costs vary between patients and individual regimes but can cost in the range of USD 20K-30K per patient/year. But Remicade’s additional office cost makes it “much more expensive” than Enbrel and Humira, therefore step-edits that force biosimilar use first are likely, said Dr Nathan Wei, rheumatologist and founder, Arthritis Treatment Center, Frederick, Maryland.

Humira and Enbrel dominate as the preferred biologics (followed by Remicade) due to aggressive contracting that has them as preferred status over other brands, Greenapple added. Contracts are based on market share, drug volume, preferred access and price ceilings, she said.

AbbVie and Amgen could offer a price discount in the neighbourhood of 30% as part of contract renegotiations, depending on the formulary plans’ size and level of control, Greenapple said. Besides a price discount, the manufacturer can bundle contracts together so as to offer discounts across a wide variety of product areas, in turn for preferred formulary status, the consultant said. Manufacturers will likely wait to see biosimilars’ impact on market share to drop their prices, Greenapple said.

Remsima uptake could be low initially since its competitor products are contracted by commercial insurers for price protection, and preferred drug formulary status policies have fixed contract term lengths of time associated with them, said Charles Shasky, president of Virginia-based pharmacoeconomics consultancy Biotechnomics.

The majority of market share has been shifting between Enbrel and Humira and relative cost is part of that shift

When these confidential contracts expire, greater biosimilar uptake would be expected, he said. If Celltrion starts negotiations with the insurers today, it may take a year or two to complete negotiations, he said. Innovators could also lobby to influence state-dispensing laws and regulations so as to steer away from biosimilar substitution, Shasky noted.

Celltrion needs to convince physicians and payers that Remsima is clinically comparable to Remicade first and foremost, Keeping and the second consultant said. Both stakeholders cite concerns on efficacy and safety/immunogenicity as the leading barriers to biosimilar use, Keeping noted. Company promotion of data that supports product comparability is “hugely important,” for clinical and nonclinical characterization and product quality, Keeping and the second consultant noted.

“Janssen [J&J] remains confident in the position of Remicade and the value of this differentiated anti-TNF-alpha treatment,” a spokesperson said, noting the safety and efficacy has been well-established through extensive clinical development programs, postmarketing surveillance, registries and commercial experience. To date, sales of biosimilar infliximab agents have been limited despite the EMA’s approval in September 2013, he added.

Amgen declined to comment on commercialization questions.

Off-label considerations

Remicade is indicated in the US for paediatric and adult Crohn’s disease (CD), paediatric and adult ulcerative colitis (UC), RA, psoriatic arthritis (PA), ankylosing spondylitis (AS) and plaque psoriasis (PS).

There is debate on whether Celltrion’s previous positive data in RA and other indications can be extrapolated to CD and UC, this news service previously reported. Health Canada did not permit full indication extrapolation while the EMA did, the experts noted. Health Canada approved Remsima in April for RA, AS, PA and PS. Celltrion announced on 28 June 2013 that the EMA’s Committee for Medicinal Products for Human Use (CHMP) had given positive opinion for Remsima.

Celltrion submitted to the FDA the same evidence it did to the EMA to resolve concern on indication extrapolation, a Celltrion spokesperson said. The firm believes it will get full label extrapolation, including for gastrointestinal (GI) conditions, he added. The firm is running a global clinical trial to assure physicians that Remsima is clinically comparable to Remicade for GI patients, he added. A 214-patient, randomized, double-blind, switching study (NCT02096861) in active CD patients started in July and ends in March 2017, according to ClinicalTrials.gov.

If the molecule is not approved for CD/UC at the time of launch, the expectation is there will be very low uptake in the gastroenterology indications, Keeping said. A gastroenterologist survey conducted by Decision Resources indicates a low likelihood of biosimilar use in an off-label indication and there is a possibility that it wouldn’t be reimbursed for off-label indications by all US insurance plans, she said.

Payers would ultimately determine use, and physicians would unlikely use the biosimilar offlabel, agreed Dr Stephen Hanauer, professor in Medicine-Gastroenterology and Hepatology, Northwestern University Feinberg School of Medicine, Chicago, Illinois and previous chair of the FDA’s Gastrointestinal Drugs Advisory Committee.

Payers generally will not pay for off-label use unless there is a minimum of three independent publications substantiating that the product works in that area, said the first consultant. Shasky noted off-label reimbursement can potentially be seen by the public and the FDA as the insurer superseding the agency’s expertise.

Yet payers have approved off-label indications for Teva Pharmaceutical Industries’ (NASDAQ:TEVA) Granix (tbo-filgrastim) -- a “copy” of Amgen’s neutropenia drug Neupogen (filgrastim) -- despite not being eligible under its 351(a) BLA filing route, Greenapple said. There may, however, be more hesitancy to make a similar decision for a mAb, she added.

Celltrion’s market cap is KRW 4.6bn (USD 4.4m).

November 3, 2014

Jennifer C. Smith-Parker

Reporter, BioPharma Insight

Jennifer is an award-winning biopharmaceutical industry journalist. Prior to joining BioPharm Insight Jennifer was Associate News Editor at FDA Week, covering FDA regulatory policy for all FDA-regulated product areas. She also worked at The Monitor, where she covered health, environment and science issues and conducted a year-long project on indigent healthcare services. She was awarded the Texas Medical Association’s Anson Jones journalism award for an article on breast cancer. Jennifer graduated from New York University with a Bachelor’s with Honors in History and Journalism.

Jinan was a freelance journalist before joining BioPharm Insight, writing for numerous magazines and websites covering health and science stories. She has a BSc in Physiology from King’s College London and an MA in Science Journalism from City University London.