Samsung Releases Arthritis Drug in First Foray Into U.S. Pharmaceuticals
July 24 2017 - 11:44AM
Dow Jones News
By Timothy W. Martin and Jonathan D. Rockoff
Americans suffering from arthritis can now find relief from an
unexpected new player in the pharmaceuticals market.
South Korea's Samsung conglomerate, best known for its
smartphones and televisions, will make available on Monday in the
U.S. its lower-price copy of Johnson & Johnson's blockbuster
rheumatoid-arthritis drug Remicade, the second such alternative on
the market. The Samsung-developed drug will be marketed to
health-care providers by Merck & Co.'s U.S. sales team and will
be sold for about a 35% discount off Remicade's current list
price.
The move follows an April approval by the Food and Drug
Administration. It is the Samsung business empire's debut treatment
in the world's biggest drug market and reflects its desires to
diversify beyond electronics.
Samsung Bioepis Co., the group's new biotechnology company, is
targeting the creation of near replicas of so-called branded
biologic drugs, like Remicade, which are made out of living cells
and address complex diseases including cancer or arthritis. These
"biosimilars" are sold more cheaply than brand-name treatments that
often cost tens of thousands of dollars a year.
The lucrative biologic drug market will gradually open up as
patent protections of those treatments expire, creating
opportunities for biosimilars made by Samsung and others. Biologics
had $202 billion in world-wide sales last year, and the drugs are
expected to have $214 billion in sales this year, according to
EvaluatePharma, a source of pharmaceutical market data and
analysis. It estimates sales will reach $276 billion in 2020.
Samsung said in a statement its new drug, called Renflexis,
would be priced at about $750 per vial.
Pfizer Inc. and partner Celltrion Inc. launched their own
Remicade near-replica in November, selling it then at 15% below
J&J's list price. But J&J has said patients pay a
significantly lower price for Remicade after discounts.
What remains unclear is to what extent U.S. doctors and patients
will embrace these new types of medication amid concerns about the
safety and efficacy of biosimilars.
But adoption across Europe, where biosimilars have been
available for years, has "drastically" improved, while perceptions
are getting better among U.S. health-care providers, said Klaus
Falk, a Samsung Bioepis vice president who heads commercial
strategy, in an email.
"I am convinced that the good experiences we've seen in Europe
will be repeated in the U.S.," Mr. Falk said. "That said, there is
still a way to go in educating the relevant stakeholders about the
science behind biosimilars."
A vial of J&J's Remicade listed for more than $1,100 in
November of last year, with a year's treatment typically listed
then at around $29,000. It is among the top-selling drugs in the
U.S., with $4.5 billion in sales last year.
Adoption of the Pfizer-Celltrion copy of Remicade -- called
Inflectra -- has been limited. Pfizer reported the biosimilar
generated just $17 million of U.S. sales in the first quarter. In
its second quarter earnings call last week, J&J CFO Dominic
Caruso described the impact of biosimilar competition on Remicade
sales as less than J&J expected. Pfizer declined to
comment.
Samsung, whose biotechnology push is five years old, has muscled
into the drug world on an unusually fast timeline, industry
analysts say. Its association with South Korea's largest
conglomerate gives the Bioepis unit deep pockets to invest heavily
in research and development, as well as the ability to price
aggressively.
Pfizer has offered just small Inflectra discounts so far, opting
not to lower prices to spur sales, according to Sanford C.
Bernstein & Co. analyst Ronny Gal.
Mr. Gal said Merck and Samsung would probably have to discount
Renflexis even further, during contract talks with health plans, if
the biosimilar was going to succeed in getting Remicade patients to
switch over. J&J is already heavily discounting off Remicade's
list price.
J&J has acted forcefully to protect its franchise by, for
instance, negotiating exclusive contracts with the managed-care
organizations that pay for the drug and giving rebates on other
company products to hospitals that keep using Remicade, according
to Mr. Gal.
Samsung sells two of its drugs already in Europe. Last month, a
third received a positive opinion from the European Medicines
Agency. A fourth drug, for treating breast cancer, was submitted
for regulatory approval in Europe last year.
Write to Timothy W. Martin at timothy.martin@wsj.com and
Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com
(END) Dow Jones Newswires
July 24, 2017 11:29 ET (15:29 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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