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Merck snags national VA contract for its Remicade biosimilar thanks to discount pricing offer

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Merck’s Renflexis hasn’t made much of a splash on the market since its FDA approval last April, but the company has now won business with the Department of Veterans Affairs thanks to a pricing offer that beat out its rivals.

Merck has secured a national contract with the agency to supply its biosimilar of Johnson & Johnson’s Remicade, shutting out the branded drug and Pfizer’s Inflectra biosimilar, which has so far seen much of its limited success come from closed healthcare systems like the VA.

Merck markets the biosimilar under a partnership with South Korea’s Samsung Bioepis, which manufactures the product. Merck didn’t release its price for the contract, but upon launching the med last year, the company said it’d provide a 35% list price discount to the original drug. In a statement, Patrick Magri, SVP of Merck’s U.S. Hospital & Specialty Business Unit, said the company is “pleased that VA has chosen to expand access to an important treatment option such as Renflexis for our veterans who have nobly served this country.” 

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Dr. Michael Valentino, chief consultant for Pharmacy Benefits Management at the VA, added that the contract is “consistent with VA’s goal of providing quality treatment options while optimizing resources in the care of veterans.”

Merck didn’t disclose Renflexis sales in its most recent earnings announcement, indicating that the figure is not significant.

The development marks a setback for Pfizer, which has seen much of the limited success for its Inflectra biosimilar come from systems like the VA. Executives for the company have said that “highly integrated systems” like the VA have adopted its Inflectra faster than the larger commercial market due to drug pricing dynamics.

At the end of last year, Inflectra had a 5.6% share of the overall infliximab market, Pfizer CEO Ian Read said on a conference call in February. That number was an increase from September, and Read noted that the growth was largely due to “continued strong performance in closed systems such as the VA where the insurer and provider are the same entity.” 

John Young, president of Pfizer Essential Health, added at the time that Inflectra had reached 58% market share in closed systems, which he said “prioritize health care savings over short-term rebating.” 

Pfizer has been at the forefront of an effort to highlight strategies branded drugmakers are using to protect their products from biosim competition. The company is battling in court with J&J over what it calls “exclusionary contracting,” and recently filed an FDA citizen petition criticizing biosim messaging from J&J and others. The company argued branded drugmakers are disseminating “false and misleading” info to create confusion and doubt about biosims in the U.S.

While Merck sells a biosimilar version of Remicade in the U.S., the company markets the branded version in Europe, where biosims have been stealing considerable market share.

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