J&J, Janssen Biotech Pegged with Antitrust Lawsuit Over Pricing of Blockbuster Drug Remicade

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The City of Providence, Rhode Island has filed a proposed class action lawsuit in which it alleges defendants Johnson & Johnson and Janssen Biotech, Inc. violated federal antitrust laws. The 12-page lawsuit alleges the defendants have engaged in a competition-suppressing scheme to artificially inflate and maintain the price of Remicade (infliximab), a blockbuster drug used to treat rheumatoid arthritis, Crohn’s Disease, and ulcerative colitis. From the lawsuit:

The complaint explains Remicade—a drug reportedly used by more than 2.6 million patients around the world—was first sold in the United States in 1998 and remained the only infliximab product on the market until its patents expired in 2016. Johnson & Johnson, the lawsuit points out, has reportedly generated annual sales of roughly $5 billion from Remicade, which costs around $4,000 per dose.

These gaudy annual sales results were first threatened in April 2016, the complaint says, when the FDA granted approval to Pfizer, in partnership with Celltrion, to market and sell their own generic version—a “biosimilar”—of Remicade. Soon after, Merck and Samsung Bioepsis received FDA approval to distribute their own biosimilars, further eating into the defendants’ control of the infliximab market.

Despite Pfizer, Merck, and Samsung offering their versions of infliximab at “substantial price discounts,” the generics, as a result of the defendants’ anticompetitive collusion, the complaint says, have only grabbed a fractional portion of the relevant drug market. The defendants accomplished this by wielding exclusivity agreements, with which the case claims the companies were able to coerce insurers into accepting below-bar contract terms. Another product of this conduct, the case continues, is that health care providers, rather than risk denials of coverage for the defendants’ competitors’ generics, overwhelmingly chose to stock Johnson & Johnson’s Remicade rather than offer Pfizer, Merck or Samsung’s often cheaper biosimilars.

“As a result of these tactics, insurers have no choice but to agree to J&J’s exclusivity conditions,” the case argues.