Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  Equities  >  Nyse  >  Pfizer    PFE

Mes dernières consult.
Most popular
News SummaryMost relevantAll newsofficial PublicationsSector newsTweets

Pfizer : Files Antitrust Lawsuit Against J&J -- WSJ

share with twitter share with LinkedIn share with facebook
share via e-mail
09/21/2017 | 11:16am CEST
By Jonathan D. Rockoff 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (September 21, 2017).

Pfizer Inc. filed suit against Johnson & Johnson, alleging J&J thwarted competition to its arthritis therapy Remicade, in a case that could shatter arrangements pharmaceutical companies make with insurers to protect their franchise products and threaten efforts to bring down the costs of the most expensive drugs.

The complaint, filed Wednesday in U.S. District Court in Philadelphia, says J&J's "exclusionary contracts" for Remicade with health insurers, hospitals and clinics effectively prevented them from offering Pfizer's lower-priced copy so they could retain rebates and other J&J perks.

The lawsuit is the first antitrust action to surface amid the emergence of biosimilars, which are copies of popular biotech drugs, after years of litigation over patents and timing of launches. Pfizer's Inflectra is the biosimilar of Remicade.

"If such tactics are widespread, and I suspect they are, the Pfizer case will be the beginning of a wave of cases, challenging a behavior that helps drug companies erect competition-free zones, long after a drug's patent has expired," said Robin Feldman, director of the Institute for Innovation Law at the University of California Hastings.

In the market for prescription drugs, no one pays list price. Pharmaceutical companies negotiate closely guarded contracts, with health insurers and drug-benefit managers offering rebates in exchange for reimbursement. Drug companies have relied on these contracts to protect their lucrative franchises from rivals, both branded and generic.

Some of the contracts have resulted in health insurers and drug-benefit managers refusing to reimburse for certain drugs, with some exceptions, while favoring competing medicines.

Pfizer's lawsuit, involving J&J's top-selling product, could open a window into how much insurers actually pay for drugs. Pfizer says it doesn't have copies of the contracts, which are secret, but has learned about J&J's practices from customers and market research. Pfizer says it expects to seek the contracts as part of the litigation.

"We obviously expected competition, but we believe Johnson & Johnson are not competing fairly," said John Young, the Pfizer executive overseeing its biosimilars business.

Johnson & Johnson said the lawsuit had "no merit." The company said health insurers, hospitals and clinics were already paying less for Remicade and biosimilars as a result of the competition and the cost of the therapy will keep falling.

"We are effectively competing on value and price, and to date Pfizer has failed to demonstrate sufficient value to patients, providers, payers and employers," said Scott White, president of J&J's Janssen Biotech unit.

Pfizer has asked the court to void the contracts and order J&J to pay damages compensating for lost sales of its Remicade biosimilar, known as Inflectra.

Biotech drugs, which are produced in living cells and typically injected or administered intravenously, have provided help to patients with conditions ranging from cancer to hepatitis C to multiple sclerosis. But they cost a lot, often more than $100,000 a year for a patient.

The 2010 Affordable Care Act aimed to limit spending on drugs whose patents had expired by creating a regulatory framework for the approval of copies.

Last April, Inflectra was among the first biosimilars to get the go-ahead. Pfizer began selling it at the end of the year.

Sales have been paltry. Inflectra recorded just $40 million in U.S. sales during the first half of this year, compared with the $2.2 billion by Remicade. J&J sold 1.7 million vials of Remicade in the second quarter, versus the 23,000 vials of Inflectra that Pfizer sold, according to SSR Health LLC, a research firm.

During a July conference call with analysts, J&J CFO Dominic Caruso described Remicade's loss of market share as "minor" and the fall in sales as "lower" than both the company or Wall Street expected. "We haven't seen much impact now," Mr. Caruso said, according to a transcript. Remicade is J&J's top-selling product.

In the lawsuit, Pfizer blames Inflectra's poor performance on "anticompetitive" actions taken by J&J. Mr. Young said the behavior has allowed J&J to raise Remicade's list price despite the Pfizer competition and will cost the federal Centers for Medicare and Medicaid Services $140 million in extra spending this year.

A year's treatment on Remicade typically lists for $31,500, nearly $6,000 more than for Inflectra, according to SSR Health. In its lawsuit, Pfizer says it offered discounts that "in some instances were more than 40% below Inflectra's list price."

Health insurers initially treated Inflectra the same as Remicade for coverage purposes, but then J&J began putting into effect its "Biosimilar Readiness Plan" that required health insurers to cover only Remicade if they wanted rebates on the drug and other J&J products, the Pfizer complaint says.

J&J also signed contracts with large hospitals, health systems and clinics that require them to mostly buy Remicade if they want to get rebates, according to the suit. The company says about 90% of the providers haven't bought Inflectra.

If it prevails, the Pfizer lawsuit could "make sure that the laws that prevent this kind of anticompetitive behavior properly protect the manufacturers of biosimilars," Pfizer general counsel Doug Lankler said.

Pfizer says it isn't suing health insurers, hospitals or clinics because they have little leverage to resist J&J, given the wide use of Remicade and the broad portfolio of drugs, medical devices and supplies that the company sells.

J&J, whose success defending Remicade has drawn notice on Wall Street, recently told an analyst at Evercore ISI that Remicade has withstood the competition in part because doctors don't want to simply switch a patient to Inflectra if they are stable on their existing medication, and most patients are doing well on Remicade.

Scott Hemphill, a professor of antitrust law at New York University School of Law, said Pfizer will need more than J&J's contracts with health insurers and hospitals to prevail. Pfizer will have to show that J&J isn't just "competing hard for business" but "improperly excluding" a rival, he said.

"Contracting for exclusivity is not necessarily illegal. In fact, sometimes it is a source of price competition," Mr. Hemphill said. "The antitrust issue arises when your contracting has the effect of not only winning sales, but hobbling your competition" by impeding sales to all potential customers.

Inflectra was developed by Celltrion Inc. of South Korea. Pfizer has the rights to sell the drug in the U.S.

In July, Merck & Co. and partner South Korea's Samsung conglomerate began selling their own Remicade biosimilar, dubbed Renflexis, which the companies priced at a 35% discount to J&J's drug.

Write to Jonathan D. Rockoff at [email protected]

Stocks mentioned in the article
ChangeLast1st jan.
JOHNSON & JOHNSON 0.45% 126.76 Delayed Quote.-9.28%
share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news on PFIZER
10:40aPFIZER : FDA rejects Pfizers Herceptin biosimilar
10:40aPFIZER : Pfizers Trumenba gets breakthrough status for meningococcal disease
10:26aPFIZER : FDA panel affirms safety of Pfizer's Celebrex
10:20aPFIZER : takes aim at UKs health tech industry
10:04aPFIZER : Supporting Refugee Communities
04/25Shire willing to back $64 billion Takeda bid, market signals doubts
04/25PFIZER : Invites Public to Listen to Webcast of April 26 Annual Meeting of Share..
04/25ONCONOVA THERAPEUTICS : Presents Data on Dual Inhibitor of CDK4/6 + ARK5 at Amer..
04/25MERCK AND : adds affinity optimization to nanoscale synthesis system
04/24Women's Health Market Analysis on Segment, Trend, Growth, Volume, Size, Globa..
More news
News from SeekingAlpha
03:18aOpioid prescriptions dropped 12% in 2017 
04/25BIOGEN : Down Too Far, Too Fast? 
04/25FDA advisory committee backs cardiovascular safety data for Pfizer's Celebrex 
04/253 THINGS IN BIOTECH, APRIL 24 : A Good, A Bad, And A Strong Maybe 
04/24BY THE NUMBERS : Healthcare Stocks With Big Cash Distributions 
Financials ($)
Sales 2018 54 460 M
EBIT 2018 20 817 M
Net income 2018 12 632 M
Debt 2018 23 675 M
Yield 2018 3,74%
P/E ratio 2018 16,84
P/E ratio 2019 15,39
EV / Sales 2018 4,48x
EV / Sales 2019 4,26x
Capitalization 220 B
Duration : Period :
Pfizer Technical Analysis Chart | PFE | US7170811035 | 4-Traders
Technical analysis trends PFIZER
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 22
Average target price 39,9 $
Spread / Average Target 8,9%
EPS Revisions
Ian C. Read Chairman & Chief Executive Officer
Albert Bourla Chief Operating Officer & Director
Frank A. D'Amelio Chief Financial Officer & EVP-Business Operations
Freda C. Lewis-Hall Chief Medical Officer & Executive Vice President
W. Don Cornwell Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
PFIZER2.32%220 455
JOHNSON & JOHNSON-9.28%338 522
NOVARTIS-8.69%202 567
ROCHE HOLDING LTD.-11.08%193 904
AMGEN-1.13%114 902