Jul

28

Competition: maybe healthcare just needs more of it:

"Merck, Samsung Accelerate a Biosimilar Price War":

Back in November, when Pfizer Inc. launched its biosimilar — a generic version of a drug made with living cells — of Johnson & Johnson's blockbuster inflammation drug Remicade, it priced the copy at just a 15 percent discount to the original's list price. That disappointed anyone hoping biosimilars would bring a golden age of cheaper drugs. But it was also relatively friendly, as far as legally risky launches of copycat versions of flagship products go. It left J&J not having to fear losing too much in the way of sales, while giving Pfizer a healthy margin on its own sales.

But then Merck & Co. and Samsung Bioepis had to ruin the party on Monday, by launching a competing biosimilar — developed by the Samsung biotech unit and marketed by Merck in the U.S. — at a 35 percent discount to Remicade's list price.

This has effects beyond Remicade and its imitators. The biosimilar market is developing just as Allergan PLC CEO Brent Saunders predicted: As more versions of drugs hit the market, prices will rapidly drop, eating away at the profits of everybody involved.

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