J&J Under FTC Investigation Due to Remicade

Johnson & Johnson disclosed in a regulatory filing that it is being investigated by the U.S. Federal Trade Commission (FTC) for potentially violating antitrust laws in connection with its drug Remicade (infliximab).

Remicade received U.S. Food & Drug Administration approval in 1998. The tumor necrosis factor blocker is indicated for the treatment of a variety of diseases, including Crohn’s disease, pediatric Crohn’s disease, ulcerative colitis, pediatric ulcerative colitis, rheumatoid arthritis (in combination with methotrexate), ankylosing spondylitis, psoriatic arthritis, and plaque psoriasis. According to J&J, the FTC issued a “civil investigative demand”—similar to a subpoena—in June to examine the company’s contracting practices.

J&J made the announcement on Monday. According to Reuters, “Shares of the company traded marginally down at $132.47, after having closed up 1.7% on Monday. (bit.ly/2ZkZGze)”

Legal Battle: Pfizer vs. J&J

The announcement from J&J comes amid a two-year legal battle with competitor Pfizer, which sued J&J in 2017. According to Pfizer, J&J signed anti-competitive contracts with insurers that prevented Pfizer’s drug Inflectra, a Remicade biosimilar that hit the market in 2016, from competing on the market. Remicade revenue did not fall as much as expected, with reports estimating that it has managed to maintain more than 90% of the market.

In a financial filing earlier this year, Pfizer referenced this ongoing legal battle: “To date, reimbursement coverage has been mixed overall. While we achieved 100% Medicare coverage, in the face of exclusionary conduct by J&J, we have experienced access challenges among commercial payers where our lower priced product has not received access at parity to the innovator product. We will continue to work with commercial payers to enable greater access for Inflectra. Additionally, in September 2017, Pfizer filed suit in the U.S. District Court for the Eastern District of Pennsylvania against J&J alleging that J&J’s exclusionary contracts and other anticompetitive practices concerning Remicade® (infliximab) violate federal antitrust laws.”

Remicade earned J&J $1.107 billion worldwide during the second quarter of 2019, according to government data. Per its financial filing, Pfizer’s Inflectra garnered $138 million in worldwide revenue during the first quarter of 2019.

In a 2017 statement Pfizer said of the lawsuit, “J&J’s exclusionary contracts have also caused insurers not to cover Pfizer’s Inflectra even though the Pfizer biosimilar is available at a Wholesale Acquisition Cost (WAC) that is 19 percent lower than that of Remicade, and has an Average Selling Price (ASP) that is more than 10 percent lower – with Pfizer offering additional pricing concessions to compete vigorously against the dominance of Remicade. Moreover, the recent Q3 ASP published by the Centers for Medicare and Medicaid Services (CMS) continues the trend of increases in Remicade’s ASP despite the launch of Inflectra, which has seen a decline in its ASP each quarter.”

Sources: Reuters, Biopharma Dive, SEC, Endpoints News, FDA