Canada’s Competition Bureau has closed an investigation into the company that makes the top-selling drug Remicade after concluding that, although the company’s conduct could “raise concerns,” none of its manoeuvres broke the law.
The Competition Bureau launched a probe of Janssen Inc., a subsidiary of the pharmaceutical giant Johnson & Johnson, last May after other “market participants” objected to some of the tactics the company used to protect sales of its blockbuster rheumatoid-arthritis drug from the arrival of cheaper near-copies called biosimilars.
At the time, The Globe and Mail was investigating Janssen’s business practices for a series of stories published in the fall of last year.
The bureau’s inquiry confirmed that Janssen used some of the tactics described in The Globe’s reporting – including giving away vials of Remicade, which normally sell for nearly $1,000, to hospitals for a penny – but it found the company’s actions did not block biosimilar competitors from the market or inhibit their expansion in Canada.
“The bureau’s inquiry confirmed that Janssen has engaged in, and continues to engage in, conduct that could raise concerns under the [Competition] Act in certain circumstances,” the bureau’s staff wrote in a position statement released on Wednesday. “However, the bureau did not find adequate evidence at this time that this conduct was likely to substantially lessen or prevent competition.”
Remicade, an infused medication that also treats Crohn’s disease and ulcerative colitis, has been the top-selling drug by revenue in Canada since 2012. It is one of only two medications to eclipse a billion dollars in sales in Canada in a single year, according to the prescription-sales tracking company IQVIA. (The other was the cholesterol-lowering drug Lipitor.)
In 2017, seven of 10 provinces spent more on Remicade than any other drug.
Remicade is also the first blockbuster biologic drug (or drug manufactured from living cells) to lose its patent and face competition in Canada from biosimilar versions of infliximab – the molecule in Remicade.
Despite public “list” or sticker prices that are roughly half that of Remicade, the two infliximab biosimilars now available in Canada have not loosened Janssen’s stranglehold on the market.
Biosimilars accounted for just 2.7 per cent of infliximab sales in Canada in 2017, according to the federal drug-pricing regulator.
The Competition Bureau said in its statement on Wednesday that a number of “unique features” of biologics and biosimilars help to explain why the less-expensive infliximab biosimilars have yet to gain a foothold in Canada.
Unlike chemically synthesized pills, biologics are complex, large-molecule drugs manufactured from living cells. They cannot be replicated perfectly, which is why biosimilar near-copies are not currently allowed to be swapped automatically with their brand-name counterparts by pharmacies, as is the case with conventional generic drugs. However, as the bureau pointed out, biosimilars, “provide patients with safe and effective treatment options at prices often far lower than that of an original biologic.”
On Wednesday, the bureau also said it plans to closely monitor Canada’s biologics and biosimilars industries in the future.
The bureau’s investigation examined four of Janssen’s alleged tactics: Supplying many, if not all, hospitals with Remicade for one cent per vial; giving free Remicade to patients who are ineligible for public or private reimbursement; inking deals with hospitals and public and private insurers that require or induce them to favour Remicade over biosimilars; and signing exclusive contracts with third-party infusion clinics that prohibit them from infusing biosimilars to Remicade.
The bureau’s inquiry confirmed that Janssen engaged in all of those practices, with the exception of signing contracts with public and private insurers that would explicitly require or induce those payers to favour Remicade over biosimilars.
Instead, the bureau said, the contracts resulted in insurers not implementing policies that could have allowed biosimilar drugs to be reimbursed on more favourable terms than Remicade.
There was not enough evidence to prove that any of those behaviours violated the Competition Act, the bureau concluded.
“We are pleased the Competition Bureau has concluded its inquiry into business practices associated with Remicade after finding no violations of the Competition Act,” Teresa Pavlin, a spokeswoman for Janssen, said by e-mail. The company co-operated with the bureau’s inquiry, she added.
“We remain committed to the preservation of patient and physician choice.”
Nav Persaud, a family physician and associate scientist at St. Michael’s Hospital in Toronto who studies pharmaceutical policy, called the decision a gift for drug companies.
“I think the Competition Bureau’s decision is an invitation to other pharmaceutical companies to engage in these dishonest business practices that lead to higher drug prices in Canada," he said.
Ned Pojskic, the pharmacy strategy leader at Green Shield Canada, a non-profit benefits carrier that promotes biosimilar use, pointed out that the Competition Bureau’s investigation highlighted how most public and private insurers in Canada have so far decided against forcing patients to switch from Remicade to an infliximab biosimilar – a move that would increase biosimilar sales.
“This has to be turned back to the payers across the country, public and private," he said. “We have to ensure they’re doing what they need to do to spur the competition in the marketplace because we have the tools and resources to do so, despite some of these tactics in the marketplace.”