The United Kingdom’s Competition and Markets Authority has closed an investigation into an alleged anticompetitive discount scheme related to brand-name infliximab, Remicade.
The United Kingdom’s Competition and Markets Authority (CMA) has closed an investigation into an alleged anticompetitive discount scheme related to brand-name infliximab, Remicade.
Merck Sharp & Dhome (which is known as MSD outside of the United States and Canada, and which is not to be confused with Merck KGaA, a separate company) sells the brand-name infliximab in the United Kingdom. MSD was suspected of engaging in discounting practices that were designed to block biosimilar infliximab products from competing in the nation’s healthcare system, and an investigation into the matter was opened in 2015.
According to the CMA, by linking the level of discount offered on the brand-name drug to the total amount of the product purchased, MSD purportedly attempted to dissuade the UK National Health Service (NHS) from switching to biosimilars that could have provided substantial savings on the NHS’ infliximab spending of approximately £100 million (approximately US $130 million).
According to a statement made on Thursday, while the CMA found in 2017 that MSD was in breach of competition law, it has now decided that there are no grounds for the agency to take action against MSD because the drug company’s scheme was largely unsuccessful in blocking biosimilars from NHS uptake.
“The CMA case decision group has concluded that MSD’s scheme was not, in practice, likely to limit competition from others—the legal test for finding MSD’s conduct to be unlawful,” the agency said in a statement. However, it added that “CMA’s investigation serves as a warning to businesses which design discount schemes to protect their dominant market position, that they risk breaching UK competition law: had MSD’s scheme in practice been likely to prevent or limit competition from rivals, the company could have faced severe financial penalties.”
In an email to The Center for Biosimilars®, an MSD representative said that "MSD has always maintained that the discount was not intended to restrict competition and we are pleased that the CMA has now concluded that there are No Grounds for Action. The discount referred to was developed to ensure Remicade was competitively priced, offered substantial savings to the UK National Health Service and in doing so provided greater budgetary certainty to the NHS."
The case is particularly notable because MSD, in addition to commercializing Remicade in the UK market, also commercializes biosimilars; in the United States, the company is responsible for selling Renflexis, a biosimilar infliximab developed by Samsung Bioepis that competes with Remicade (although the drug is marketed by Biogen in the EU under the name Flixabi).
The end of the investigation comes just weeks after a Canadian investigation into alleged anticompetitive practices related to Remicade was also closed.
The Canadian case involved Janssen, a division of Johnson & Johnson, which sells the brand-named Remicade in Canada, the United States, and other markets. Canada’s Competition Bureau found that Janssen did in fact engage in a number of anticompetitive practices, such as negotiating exclusive contracts that barred biosimilars, but that there was not sufficient evidence to demonstrate that the company’s conduct had effectively blocked biosimilars.
This article has been updated to include MSD's statement.