Canada Finds "Insufficient Evidence" That Janssen Blocked Biosimilar Competition

Yesterday, Canada’s Competition Bureau, an independent law enforcement agency, announced that it is closing its investigation into whether Janssen, a division of Johnson & Johnson (J&J), engaged in conduct that hindered biosimilar competition.

The bureau was investigating allegations of predatory pricing and other anticompetitive practices related to Janssen’s originator infliximab, Remicade, that was allegedly intended to block competition from 2 approved biosimilar infliximab products: Samsung Bioepis and Merck’s Renflexis and Pfizer’s Inflectra.

Alleged conduct on Janssen’s part included supplying hospitals with Remicade at the cost of 1 cent per vial, providing free Remicade to patients who were ineligible for public or private insurance coverage for the drug, entering into contracts with hospitals and insurers that led them to favor Remicade over either of the biosimilars, and entering into exclusive contracts with third-party infusion centers.

The bureau wrote in a statement that its inquiry “confirmed that Janssen was engaging in many of the alleged practices.” Namely, the investigation found that the drug maker had indeed supplied the drug at the cost of 1 cent, given free Remicade to “a large number of patients,” and negotiated exclusive contracts that barred biosimilars or even other innovator biologics.

However, wrote the bureau, Janssen did not enter into contracts with hospitals and private insurers that lead them to favor Remicade.

Despite the fact that the investigation confirmed many of the allegations against Janssen, the bureau concluded that, “at this time, there is insufficient evidence to find that Janssen's conduct has had, is having, or is likely to have the effect of substantially lessening or preventing competition in the relevant market.”

In an analysis of that conclusion, the bureau indicated that it had not found that Janssen’s offers of below-cost Remicade were widespread enough to force biosimilars to exit the market, and it added that it also found no credible evidence that, absent Janssen’s conduct, the biosimilar makers could have competed more vigorously with Janssen in terms of price, quality, or service.

The Canadian agency’s decision comes as biosimilar stakeholders in the United States await a decision in an antitrust lawsuit, brought by Pfizer against J&J, that makes other allegations of misconduct.

According to Pfizer’s 2017 complaint, J&J engaged in exclusionary contracting, bundling of rebates, and multi-product bundling practices for the brand-named Remicade that effectively denied patients access to biosimilars and undermined price competition in the US marketplace.

In an amicus brief submitted to the court by the Biosimilars Council (a division of the Association for Accessible Medicines), the council supported Pfizer’s position and warned that “Replication of [J&J’s] tactics across biologics markets will dramatically diminish incentives for developing future biosimilars, and competition in this critical, growing sector of the healthcare industry will suffer.”

Despite the news from Canada, a representative from Pfizer told The Center for Biosimilars^® in an email that “The decision by Canada’s Competition Bureau has no relevance to Pfizer’s ongoing antitrust lawsuit against J&J in the United States, where the healthcare system and J&J’s conduct are very different. We continue to believe such anticompetitive behavior needs to be stopped and look forward to proving our case in US court.”

This article has been updated to include a comment from a Pfizer representative.