MarketLine Blog

Will biosimilar drug Inflectra be Remicade’s nemesis?

On 10 September 2013, Hospira announced that the European Commission had approved its drug Inflectra, a treatment for severe inflammatory conditions such as Crohn’s disease and rheumatoid arthritis.

Good news for the company, and of course for patients suffering from these painful and debilitating diseases. Celebrations might be more muted at the headquarters of Johnson & Johnson, however, as Inflectra is essentially a legal copy of its blockbuster drug Remicade.

Genuine generic copies of biotech drugs are not feasible, because competitors to the original manufacturer do not have access to the same cell lines and so on. However, biosimilars are possible. These have the same active ingredient, and demonstrate comparable clinical effectiveness. Inflectra is a biosimilar for Remicade.

Remicade was launched in 1998. Its active agent is a monoclonal antibody against tumor necrosis factor alpha (TNF-α). This antibody is a protein, and is produced in a biotechnology process, rather than via chemical synthesis. The years since 1998 have proved Remicade to be a biotech blockbuster. During 2001-2012, Johnson & Johnson’s revenue from the drug grew at an annualized rate of more than 20%, to reach $6.1bn in 2012. The global market for Remicade is even more lucrative, as it is manufactured under license by other companies as well.

As of 2010, Remicade was the world’s best-selling biotech-based drug. Johnson & Johnson has pursued a strategy of extending the range of medical conditions for which the drug is recommended, so expanding the potential end-user market. Originally winning approval as a therapy for Crohn’s disease, additional trials added rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis, ulcerative colitis, and plaque psoriasis during the 1998-2006 period.

Patent protection means that the company has monopoly price-setting power: it can (in principle) charge whatever price maximizes its profits, without worrying about price competition from other suppliers.

But Remicade is patent-protected only until 2015 in many EU countries. Beyond that, it is highly likely that it will need to compete with Inflectra and other biosimilars. In 2012, 65% of Europe’s pharmaceutical market volume (i.e. in terms of prescriptions or prescribed units) was accounted for by generic drugs. With pressure on governments and insurers to reduce healthcare costs, the opportunity to use generic or biosimilar versions of effective but costly drugs will be welcomed.

Read more in our Johnson & Johnson Company Profile, including SWOT analysis.

To find out more about the history and financial performance of Remicade, read our Johnson & Johnson Case Study: Remicade, a Biotech Blockbuster

Also explore our other products: Company ReportsSWOT Analysis ReportsIndustry Reports (Porter Five Forces Analysis)Country Analysis Reports (PESTLE Analysis), & Business Case Studies.


Leave a comment

*Required fields. We will not publish your email address