Remicade drug probe heralds new UK antitrust front on pharma markets

24 May 2017. By Simon Zekaria*.

The UK's probe into US pharmaceutical giant Merck & Co's blockbuster drug Remicade heralds a new front in the country's battle to make drug markets more competitive.

The Competition and Markets Authority's inquiry will be a key test for the developing biosimilar industry — that is, knockoff medicines classified as similar, but not identical, to already licensed drugs.

Yesterday, the CMA accused Merck Sharp & Dohme, a unit of the US company, of abusing its market clout by offering discounts on Remicade — otherwise known as Infliximab — which treats autoimmune conditions such as Crohn's disease and arthritis.

The UK agency provisionally found that the discount program impeded the sale of biosimilar versions of the drug.

Pricing

The CMA believes MSD offered a discount on price to customers that continued to buy Remicade in the same quantities, but not if they also bought biosimilars, MLex has learned. This dissuaded customers from switching to cheaper alternatives.

MSD denies the charge and says the discounts made the drug competitive and saved money for the UK's state-run National Health Service.

The NHS, which promotes the use of biosimilars to boost competition, declined to comment. MSD wasn't available for further comment.

Threat from biosimilars

Remicade has been a bestseller for MSD for years, but sales dropped by a third in the past year to $1.3 billion in the face of competition from biosimilar manufacturers such as South Korea's Celltrion.

MSD sells Remicade in Europe under a license from rival Johnson & Johnson, which sells the drug in the US.

Unlike generic drugs, which are identical in terms of molecular structure to their reference drugs, biosimilars are made inside living cells and therefore can't be replicated. The industry is growing because the drugs are less expensive to produce and offer lucrative returns when blockbuster medicines go off patent.

MSD discounted Remicade's price in the UK after its patent expired in 2015 to fight off the threat from biosimilars, which also aggressively compete on price to preserve sales. Johnson & Johnson has also discounted the drug to counter the impact of biosimilars.

CMA fights pharma

The CMA's probe into MSD comes amid a wider enforcement agenda targeting abusive pricing in the pharmaceutical industry.

Last December, the regulator fined Pfizer more than $100 million for raising the cost of an epilepsy drug.

It previously fined GlaxoSmithKline more than $50 million for stalling the launch of generic copies of its antidepressant Seroxat through pay-for-delay agreements.

Earlier this year, the CMA charged Concordia and Actavis with signing unlawful deals that kept high prices for treatments using the steroid hydrocortisone. Actavis was also previously charged separately for excessive prices.

The competition regulator can fine companies up to 10 percent of their global revenue if they are found to have infringed competition law.

*Aicha Marhfour contributed to this article.

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