UK Authority: Merck Used Illegal Discounts to Defend Against Biosimilar Competition to Remicade

The Competition and Markets Authority (CMA) of the United Kingdom has announced it is investigating whether Merck unfairly offered a discount scheme to protect sales of its drug infliximab (Remicade) against competition from new biosimilars hitting the market.

According to the CMA—a governmental office that regulates fair market competition in England, Scotland, Wales, and Northern Ireland—the investigation has been ongoing since December 2015. This week, it announced the issuance of a “statement of objections,” which alleges wrongdoing but is not a conclusive finding of guilt. Its provisional statement is that Merck “operated an anti-competitive discount scheme” by “abusing its dominant position” in the market.

Additional information on the case indicates that Merck’s discount scheme was employed “in relation to the supply of Remicade to the NHS.” The National Health Service is the largest buyer of pharmaceuticals in the United Kingdom, and drug prices are determined through negotiations between manufacturers and the government.

The alleged scheme was employed to ensure sales of infliximab remained steady despite influx of cheaper infliximab biosimilars hitting the European market around that time. For instance, Inflectra and Remsima were approved by the European Medicines Agency in September 2013, while Flixabi was approved in May 2016.

According to a FiercePharma article from October 2015, Merck had offered the NHS discounts and rebates of about 25%, or £48 million off of £191 million in sales. A company spokesman said that the 2 competing biosimilars were being sold at discounts of between 25% and 30%. However, a representative of Napp Pharmaceuticals responded that its biosimilar Remsima had actually been sold to the NHS for prices 40% to 50% lower than the list price of Remicade.

In response, Merck Sharpe & Dohme (MSD), the overseas arm of Merck & Co, issued a statement denying the accusations. Both MSD and the New Jersey-based Merck & Co could be found jointly liable by the CMA of violating competition law, but the statement projected confidence that the ongoing investigation would absolve both of wrongdoing. “The discounts in question meant that infliximab was competitively priced and offered savings to the UK National Health Service, without hindering competition,” it explained.

Remicade, a tumor necrosis factor inhibitor used to treat autoimmune diseases, is sold in the United States by Johnson & Johnson and licensed to MSD for international sales. With the FDA’s approval of Renflexis in April 2017, a year after the first biosimilar for infliximab (Inflectra) was approved, Johnson & Johnson is also facing cost pressures from new competition. However, the biosimilars have not significantly eaten into Remicade’s market position in the United States, as they have not been deemed interchangeable and Inflectra was priced at only a 15% discount to Remicade.