The drug industry has plenty of tools to fend off the new, cheaper competitors called biosimilars — from lawsuits that prevent them from launching to deals that limit their profits after they launch.
Why it matters: The drug market is increasingly composed of biologics, which are pricier than traditional small-molecule drugs. At the same time, biosimilars — which are comparable to generic biologics — are struggling to break through.
Driving the news: UnitedHealthcare, one of the country's largest insurers, will soon disadvantage Udenyca — a biosimilar manufactured by Coherus to compete against Amgen's Neulasta. That's because Amgen offered United a bigger rebate then Coherus.
But this is just one example of how the drug industry finds ways to keep biosimilars off the market.
- Pfizer is suing Johnson & Johnson over similar practices. It says J&J has created exclusionary deals with insurers, using rebates as leverage to win preferred coverage of J&J's Remicade over Pfizer's biosimilar version.
- “To date Pfizer has failed to demonstrate sufficient value to patients, providers, payers and employers,” J&J told Reuters.
Lawsuits filed by biologics manufacturers also create a hurdle for biosimilars — well before they're in any position to negotiate with insurers.
- Eleven biosimilars have been approved by the FDA but haven't launched, at least partially due to patent lawsuits, according to the Pharmaceutical Care Management Association.
What they're saying: J&J's "strategy could serve as a blueprint for every brand name biologic drug maker seeking to maintain monopoly power and profits indefinitely in the face of competition from a lower-priced biosimilar," the Biosimilars Council wrote in a court filing in support of Pfizer.