By Elisabeth A. Koral, Principal
Pfizer can proceed with its biosimilar antitrust lawsuit against Johnson & Johnson (J&J) according to U.S. District Judge J. Curtis Joyner of the Eastern District of Pennsylvania. On August 10, 2018, Joyner denied J&J’s motion to dismiss Pfizer’s antitrust action involving infliximab products.
J&J introduced the first infliximab product under the brand name Remicade in the U.S. in 1999 for treating a variety of immune-mediated diseases. In 2016 Pfizer launched Inflectra after it received FDA approval as the first biosimilar to Remicade.
Pfizer’s Antitrust Lawsuit
In September 2017, Pfizer filed an antitrust lawsuit alleging J&J engaged in anticompetitive practices in the pharmaceutical market for infliximab products. According to Pfizer’s allegations, within a week of Inflectra’s launch, J&J began to deploy its “Biosimilar Readiness Plan,” which allegedly involved a multi-pronged anticompetitive scheme including:
- Exclusive Contracts: Pfizer alleges J&J sought and secured contractual commitments from commercial insurance companies to exclude Remicade biosimilars, such as Inflectra, from their plans. These contracts made Remicade the exclusive infliximab product available to patients covered under those plans. At least 70% of commercially insured patients in the U.S. fall under plans that have adopted these express or de facto agreements to exclude Inflectra and other biosimilars. As of September 2017, J&J maintained market share of over 96% of infliximab unit sales in the U.S.
- Bundle Rebates and Multi-Product Bundling: Pfizer alleges J&J also enticed insurers into accepting exclusive contracts via a rebate program that would provide savings off Remicade’s increasing list price—but only so long as new patients are also given Remicade rather than Pfizer’s biosimilar, Inflectra. J&J has also bundled rebates across multiple products such that if an insurer refuses to grant exclusivity to Remicade, the insurer would be forced to pay a higher price on other J&J products in addition to Remicade.
Pfizer also alleges that both Pfizer’s Wholesale Acquisition Price (“WAP”) and “Average Sales Price” (“ASP”) (a net price accounting for rebates and other discounts) continue to rise despite insurers and providers now having a lower-cost alternative in Pfizer’s Inflectra. As a result, Pfizer claims that it has been prohibited from competing for at least 70% of all commercially insured patients in the U.S.
J&J’s Motion to Dismiss
In J&J’s motion to dismiss, J&J argues the following three points:
- Pfizer has failed to plead facts that constitute an antitrust injury
- Pfizer has failed to plead specific allegations establishing antitrust injury with respect to the particular conduct that is the subject of Pfizer’s complaint
- The facts that Pfizer did plead lack sufficient basis to support its antitrust injury.
Joyner Denies Motion to Dismiss
Regarding J&J’s first point, Joyner notes that while a plaintiff must assert plausible allegations that the plaintiff and the competitive market suffered as a result of defendant’s anticompetitive conduct, on a motion to dismiss, the adequacy of those allegations are liberally analyzed and no judgment is made on the validity of those claims. According to Joyner, Pfizer’s complaint sufficiently and plausibly alleges that it suffered an antitrust injury. Joyner points to Pfizer’s complaint, which provided: detailed allegations regarding J&J’s exclusionary terms with the nation’s largest insurers; the incentive structure that forces end payers and providers into accepting those terms; Pfizer’s efforts to compete (e.g., guarantee that Inflectra would cost less than Remicade); and showed how market participants on many levels are injured from J&J’s ability to sell Remicade without any competition. Joyner also notes that the existence of possible alternative causes of an antitrust injury, for example, Inflectra’s lack of interchangeability status, did not merit dismissal as asserted by J&J.
As for J&J’s second point, Joyner appears to side with J&J that “J&J’s multi-product bundles, on their own, … do not present antitrust concern” because Pfizer failed to allege any facts that “J&J is hindering its [Pfizer’s] ability to compete with J&J’s multi-product bundles by offering their own multi-product bundles.” However, in ultimately refusing to dismiss Pfizer’s bundling claim, Joyner states that J&J may have “bundled its power over existing Remicade patients to break the competitive mechanism and deprive new infliximab patients (and their insurers) of the ability to make a meaningful choice between Remicade and its biosimilars.”
Finally, regarding J&J’s third point, J&J argues that the ASP and WAC metrics relied on by Pfizer lack sufficient specificity. Characterizing J&J’s arguments as “mistimed,” Joyner finds that Pfizer’s allegations “that Remicade’s ASP continues to increase despite Inflectra’s entrance to the market at a 24% lower per unit cost” do lend plausibility to Pfizer’s theory that J&J is engaging in anticompetitive behavior.”
As a result, Judge Joyner allowed Pfizer to press its claims.