Competition Bureau looking at protection strategies for biologics market

The Competition Bureau has discontinued an inquiry into allegations that Janssen Inc. inhibited the Canadian market for biosimilar products that compete with its biologic product Remicade.

Given the significant impact of biologics in Canada, the report highlights some of the competition issues related to the biologics and biosimilars market. Although the bureau expressed concerns about the tactics Janssen Inc. used to protect its market, it didn’t find adequate evidence the approach was “likely to substantially lessen or prevent competition.”

Read: Is nudging biologic patients towards biosimilars a good choice?

The bureau’s inquiry focused on the following practices that could potentially inhibit biosimilar competition to Remicade: supplying hospitals with Remicade for $0.1 per vial; providing free Remicade to patients who don’t have public or private coverage; entering into agreements with hospitals and public and private payers that favour Remicade over biosimilars; and exclusive arrangements with third-party infusion clinics that prohibit them from infusing biosimilars to Remicade.

Although the bureau’s investigation confirmed Janssen was supplying hospitals with Remicade for $0.1 per vial, providing free Remicade to a large number of patients without coverage and had negotiated exclusivity with certain third-party infusion clinic networks, it didn’t have contracts that favoured Remicade over biosimilars.

Read: What to do about biosimilars?

“Janssen is aligned with Health Canada’s position in that any decision to switch a patient should be made by a treating physician in consultation with the patient and all available clinical evidence,” said Janssen spokesperson Teresa Pavlin. “We remain committed to the preservation of patient and physician choice.”

Going forward, the bureau will continue to monitor the biosimilars market and have continued contact with payers. It’s interested in payer’s biosimilar switching policies, which — although still quite controversial — could result in a dramatic shift from biologics to biosimilars. The bureau is concerned about what tactics biologics companies may use to defend their market share.

In the report, the bureau suggested agreements with payers that “prohibit them from providing reimbursement for biosimilars, or that only allow for reimbursement if a patient has first failed treatment on the reference biologic” may be cause for concern.

Although the terms of most agreements are confidential, it’s likely that some payer agreements are in place to ensure a pharmaceutical manufacturer’s drug is the preferred drug in a payer’s formulary. Is this type of agreement, in general, offside from a Competition Bureau perspective?

When asked for comment by Benefits Canada, bureau spokesperson Jean-Philippe Lepage wouldn’t speculate, explaining the bureau “evaluates each case on its merits and based upon a full consideration of the facts. In the absence of additional information, we are not able to determine whether a particular type of agreement is likely to raise concerns under the Competition Act.”

Read: Rising biosimilar uptake touted amid ‘continuously evolving’ evidence for safety, efficacy

Although agreements with pharmaceutical manufacturers are generally negotiated directly with the insurers or pharmacy benefit managers, private drug plan managers should understand what arrangements have been made on their behalf and guide their insurer’s or PBM’s biosimilar policy. There are a wide variety of approaches, all with differing plan member impact.