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The policy would switch patients on public drug plans to less-expensive versions of their medications, saving tens of millions of dollars a year.Chris Donovan/The Globe and Mail

Ontario is moving ahead with a policy favouring cheaper prescription medications called biosimilars despite pressure tactics from the company that makes one of Canada’s most lucrative drugs.

Premier Doug Ford’s cabinet approved the policy on Jan. 30, two senior government sources with knowledge of the decision said. The Globe and Mail is not identifying the sources because they are not authorized to speak publicly on the matter.

The policy would switch some patients on public drug plans to less-expensive versions of their medications, saving tens of millions of dollars a year.

The cabinet made the decision one day before Janssen Inc., a unit of Johnson & Johnson, met with government bureaucrats to present an offer that included a steep discount in an attempt to retain public funding for Remicade. The drug, also known as infliximab, is an intravenous treatment for rheumatoid arthritis and inflammatory bowel disease that was the top-selling medication by revenue in Canada in 2018.

The company’s confidential proposal, reviewed by The Globe, revealed that Janssen gave free Remicade to thousands of new patients in Canada over the past four years in an effort to circumvent provincial policies favouring lower-cost competitors.

The 19-page slide deck also said that if Ontario proceeded with the switch, Janssen would stop providing 1,872 Ontario patients with free Remicade, which costs an average of nearly $30,000 a year at full price. The provincial plan would then be responsible for covering biosimilars for those patients.

Janssen’s proposal provides a rare glimpse of the tactics of a major pharmaceutical company in the battle over biosimilars, the near-copies of off-patent biologic drugs that are expected to curb public spending on prescription medications.

Ontario’s move on biosimilars is particularly significant because British Columbia and Alberta adopted similar policies last year.

Those decisions, which the Western provinces said were imperative for controlling drug budgets, were lauded by some patient-advocacy groups and derided by others, who argued that patients should not have to change medications for purely financial reasons.

Janssen declined to answer detailed questions about the offer to Ontario, but spokeswoman Jennifer McCormack said the company believes treatment decisions should be left to doctors, rather than government policies.

“Our proposals provide viable options such that patients and physicians continue to have effective treatment options while the government is able to realize comparable cost savings; an outcome that we believe is in everyone’s best interest,” she said in an e-mail.

From the archives: How a blockbuster drug tells the story of why Canada’s spending on prescriptions is sky high

Biologics are expensive, complex drugs manufactured in living organisms. Biosimilars are like generics: They are near-copies of biologic drugs whose patents have expired.

Health Canada and drug regulators around the world say biosimilars are as safe and effective as the drugs they mimic.

Three of the top five prescription drugs in terms of public spending in Canada are biologics.

Infliximab, as Remicade and its biosimilars are known, is second on that list, according to the Canadian Institute for Health Information, which reported that government drug plans across the country spent $527.5-million, or an average of $29,088 a patient, on it in 2018.

In a bid to control their prescription-drug budgets, provincial governments in 2016 began to encourage wider use of biosimilars by refusing to pay for the original versions, including Remicade, for new patients.

Provincial governments argued the biosimilars-for-new-patients approach would help biosimilars break the stranglehold of long-established brands, and that lower drug prices would flow from a thriving biosimilar market.

Despite those provincial policies, biosimilars of Remicade have struggled to gain a toehold in Canada, making up just 8 per cent of the national market for it at the end of 2018.

Figures in Janssen’s Ontario proposal help explain why: Had Janssen not given away Remicade, as much as 46 per cent of the province’s market for publicly insured patients receiving infliximab would already belong to biosimilars, rather than the current 13 per cent.

“Since 2015, Janssen has provided REMICADE on a free-goods basis (REMICADE financial assistance program) to new patients prescribed REMICADE but without access to public funding (ie delisting decisions)” for the drug, one of the slides says.

The objective of the “national effort” was to "enable patient/physician choice while Janssen pursues restoration of REMICADE funding for new patients.”

The presentation says the company would stop paying for free Remicade if the government agreed to restore new-patient funding; if the giveaway became financially unsustainable; or if the province removed funding for Remicade, as cabinet agreed to do in the closed-door session on Jan. 30.

If Janssen ends its Remicade giveaway in Ontario, those 1,872 recipients would be eligible for government-paid biosimilars.

Janssen warned in its presentation that covering those patients would cost the Ford government $35-million in 2020-2021.

Travis Kann, a spokesman for Health Minister Christine Elliott, said patients who qualify for public drug coverage would continue to receive treatment, adding: “There’s certainly nothing stopping Janssen from continuing to offer this program in the event any biosimilar switching policy moves forward.”

Janssen’s efforts to maintain its share of the infliximab market in Canada also included negotiating deals with private health insurance plans and with Saskatchewan and Prince Edward Island “to ensure equal status for REMICADE with biosimilars.”

At the heart of Janssen’s pitch to Ontario was a proposed “co-existence framework” to maintain public funding for both Remicade and biosimilars.

Under the proposal, patients already prescribed Remicade would be able to keep taking the drug.

Janssen would stop giving away free Remicade to new patients eligible for government insurance during a two-year blackout period, which the presentation said would allow biosimilars to gain 50 per cent of the market and allay the province’s concerns that biosimilar makers would pull their drugs out of Canada because of a lack of sales.

After the blackout period, Janssen wanted the province to start covering both Remicade and its biosimilar competitors for new patients, according to the presentation.

Remicade has a list price of $987 a vial, about double the cost of infliximab biosimilars made by pharmaceutical giants Pfizer and Merck, which have list prices of $525 and $493, respectively.

However, list prices do not reflect the rebates and discounts that are now common in the global pharmaceutical industry and are kept confidential. The presentation shows that Janssen offered Ontario a confidential price of $483.90 per vial of Remicade, less than the price of its biosimilars.

The Competition Bureau of Canada was aware that Janssen gave free Remicade to a large number of patients when it closed an inquiry into alleged anti-competitive practices by the company last year, spokesman Jayme Albert confirmed last week.

The inquiry concluded that although Janssen engaged in conduct that could raise concerns under the Competition Act, there wasn’t adequate evidence that it was likely to substantially reduce or prevent competition.

With a report from Laura Stone

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