By John George – Senior Reporter,
Philadelphia Business Journal Jul 30, 2019, 12:22pm EDT
The Federal Trade
Commission issued a civil investigation demand to Johnson & Johnson last
month in connection with the federal agency’s probe into whether the company’s
contracting practices for its multibillion-dollar drug Remicade violate
antitrust laws.
Johnson &
Johnson (NYSE: JNJ) disclosed the FTC action in documents filed the Securities
and Exchange Commission. Criminal investigation demands or CIDs are the
agency's equivalent of a subpoena seeking information.
Remicade is a
biological drug approved as a treatment for rheumatoid arthritis, Crohn’s
disease and other autoimmune disorders. The medicine generated worldwide sales
of $1.2 billion for Johnson & Johnson last year, a decrease of 15.6% from
2017.
The drop was
attributed in part to introduction of biosimilar product competition.
Biosimilars are designed to be highly similar to an already-approved branded
biological products. They are different from generic drugs, which are
chemically identical to their branded counterparts. Biological products are
generally derived from a living organism and can come from many sources
including humans, animals, microorganisms or yeast.
One company
marketing a Remicade biosimilar product, Pfizer (NYSE: PFE), filed a lawsuit
against Johnson & Johnson alleging the company’s contracts with health
insurers were anticompetitive. Janssen Biotech of Horsham, Pa., a Johnson &
Johnson subsidiary that markets Remicade, was also named as a defendant in the
lawsuit.
Pfizer teamed
up with Celltrion Healthcare Co. Ltd. of South Korea, to launch Inflectra, a
Remicade biosimilar, in 2016. Additional Remicade biosimilars have since been
introduced into the market.
In its lawsuit,
which is still working its way the court system, Pfizer alleges Johnson &
Johnson induced health insurers to give preferential treatment to Remicade in
exchange for discounts. The lawsuit also alleged Johnson & Johnson said it
withhold rebates from payers unless they entered into ‘biosimilar-exclusion’
contracts.
Officials at
Janssen Biotech, the Johnson & Johnson subsidiary that markets Remicade,
have said the Pfizer lawsuit is without merit and that the company is
"effectively competing on value and price" with respect to Remicade
sales.
Johnson &
Johnson acquired Remicade — which has received FDA approvals for 16 different
indications covering six diseases — when it bought Malvern-based Centocor for
$4.9 billion in 1999. The company in 2013 received its first marketing approval
for Simponi, which, like Remicade, is a monoclonal antibody used to treat
rheumatoid arthritis and other autoimmune disorders.
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