Pfizer's Epogen Biosimilar Retacrit Launches At 33% Off In A US Market Where Amgen's Already Competitive

Retacrit – a biosimilar of Amgen's Epogen and J&J's Procrit – will launch at aggressive discounts to the original anemia products in a market where Amgen's already proven there's a tough fight for market share.

Pfizer Inc. said on Nov. 14 that it launched the anemia drug Retacrit – the first US biosimilar for Amgen Inc.'s Epogen and Johnson & Johnson's Procrit – at 33.5% and 57.1% discounts, respectively, to the reference products as it gears up to win share in a market where competition already is fierce.

Epogen (epoetin alfa) sales have been in decline for the past few years due to biosimilars outside the US and following the launch of novel anemia therapies, including Amgen's own long-acting erythropoietin stimulating agent (ESA) Aranesp (darbepoetin alfa), which also is facing competitive pressures.

Pfizer's Retacrit (epoetin alfa-epbx) could gain market share with its significant list price discount, but it will be going to battle against originator products that already have in-roads with cost-sensitive health care providers and payers.

Retacrit was approved in May for all of the indications listed on the Epogen and Procrit (epoetin alfa) labels – anemia in chronic kidney disease (CKD) patients on dialysis, in HIV patients taking zidovudine and due to chemotherapy. The biosimilar was not able to launch immediately due to ongoing patent litigation at the time of approval.

Though Epogen and Procrit have similar labels, Johnson & Johnson's licensing agreement with Amgen for epoetin alfa does not allow J&J to market Procrit for anemia in CKD patients on dialysis – the area where Epogen has lost market share to Aranesp and Roche's Mircera (methoxy polyethylene glycol-epoetin beta). Amgen has explained in the past that Epogen suffered from Roche's contracting with Fresenius dialysis centers. (Also see "Amgen Earnings Beat Expectations; Company Pushing Payers On Repatha" - Scrip, 28 Apr, 2016.)

Sales Struggle In US ESA Market

In addition to Amgen's Epogen sales at dialysis centers in the US, the company earns epoetin alfa royalties from J&J for Procrit sales (excluding the dialysis market) in the US and in all indications in ex-US markets. Epogen sales declined 5% year-over-year to $252m in the third quarter – all at dialysis centers in the US – and Aranesp sales in the nephrology and oncology markets fell 8% to $477m globally.

"Epogen declined 5% year-over-year due to lower net selling price in a category that is becoming increasingly competitive," Amgen Executive Vice President-Global Commercial Operations Murdo Gordon said during the company's Oct. 30 earnings call.

"With the potential launch of a biosimilar in the US, we would expect a further decline in net selling price. Aranesp declined 8% year over year, primarily driven by increased competition from a long-acting product in the independent and mid-size dialysis organizations. … Assuming that the approved epoetin biosimilar will launch in all segments, we're prepared to compete," Gordon said.

J&J Chief Financial Officer Joseph Wolk also noted during a third quarter earnings call on Oct. 18 that the company anticipated a Procrit biosimilar launch still this year. The product's third quarter sales grew 7.1% year-over-year to $255m in the third quarter.

Pfizer's Retacrit pricing shows that the big pharma, which began shipping the biosimilar to wholesalers in the US on Nov. 12, and its partner Vifor Pharma Group also are playing to win in dialysis and other markets. Vifor will commercialize Retacrit in certain channels, having licensed the biosimilar for the US dialysis market. (Also see "Vifor Becomes A 'Pure Play' Pharma" - Scrip, 10 Apr, 2017.) 

Retacrit's wholesale acquisition cost (WAC) is $11.03 per 1,000 units/mL, which Pfizer said is 57.1% below the Procrit WAC of $25.72 per 1,000 units/mL and 33.5% below the Epogen WAC of $16.58 per 1,000 units/mL. The WAC, or list price, does not include discounts and rebates negotiated with payers, providers, distributors and other purchasing organizations.

Retacrit has been assigned two unique Q-codes by the Centers for Medicare and Medicaid Services (CMS): Q5105 for use in patients with end-stage renal disease (ESRD) on dialysis and Q5106 for non-ESRD uses. The biosimilar also qualifies for pass-through status under the hospital outpatient prospective payment system (OPPS).

But as Amgen's Gordon indicated in October, the company will make every effort to retain what remains of its Epogen market share. It appears that Amgen already has been in negotiations with payers and others for contracts that favor its product – or at least that the list price reductions mentioned by Gordon are paying off.

UnitedHealthcare said last month that it will institute step therapy – requiring patients to try and fail less expensive treatments before providing reimbursement for more costly medicines – for Medicare Part B drugs in its Medicare Advantage plans, including anti-inflammatory drugs and ESAs. Procrit, Aranesp and Retacrit will be subject to step therapy requirements, but Epogen and Mircera will not (see sidebar).

But Retacrit has made inroads in ex-US markets, according to Pfizer's third quarter earnings report. The company's biosimilars revenue totaled $197m worldwide in the third quarter and $558m for the first nine months of 2018, which were up 40% and 45%, respectively, year-over-year. The biosimilars total included Retacrit sales in certain European and Africa/Middle Eastern markets.

Pfizer's Third Biosimilar In Tough US Market

The product is Pfizer's third biosimilar launch in the US after Inflectra (infliximab-dyyb), a copy of J&J's TNF inhibitor Remicade (infliximab) partnered with Coherus BioSciences Inc., and Nivestym (filgrastim-aafi), a biosimilar of Amgen's Neupogen (filgrastim).

Nivestym was launched Oct. 1 at a WAC that is 30.3% lower than Neupogen's list price and below the pre-discount prices for competing biosimilars Zarxio (filgrastim-sndz) from the Novartis AG generics subsidiary Sandoz and Teva Pharmaceutical Industries Ltd.'s Granix (tbo-filgrastim).

However, the first biosimilar for Amgen's longer-acting neutropenia treatment Neulasta (pegfilgrastim) – Mylan NV's Fulphila (pegfilgrastim-jmbd) – launched in July and could steal market share from Neupogen as well as the Neupogen biosimilars. Fulphila will be followed by a second Neulasta biosimilar from Coherus in January, Udenyca (pegfilgrastim-cbqv). (Also see "Coherus Gears Up For January Udenyca Launch, Prices Biosimilar At 33% Discount To Neulasta" - Scrip, 9 Nov, 2018.)

Pfizer seems to have learned a valuable lesson about biosimilar pricing from its launch of Inflectra two years ago at a 15% discount to Remicade's WAC. (Also see "Pfizer Will Support Inflectra Launch With Dedicated Sales Force" - Scrip, 14 Nov, 2016.) J&J has held on to 94% of the US infliximab market as of the third quarter of this year through substantial rebating. (Also see "J&J Well Positioned For US Drug Pricing Changes Regardless Of Timing Or Form, Duato Says" - Scrip, 13 Sep, 2018.) Pfizer has sued J&J alleging anti-competitive activity. (Also see "Pfizer Sets The Stage For A Biosimilar Showdown Over Exclusive Contracts" - Scrip, 20 Sep, 2017.)

Aggressive commercial tactics have kept biosimilars from gaining major traction and significantly cutting pharmaceutical costs to date. (Also see "FDA's Gottlieb: 'Pricing And Reimbursement Mischief' Holding Back Biosimilar Market" - Scrip, 7 Mar, 2018.) The FDA is looking at ways to make the biosimilars market more competitive. (Also see "From Interchangeability To Exclusivity: US FDA Looks For Ways To Make Biologics Market More Competitive" - Scrip, 7 Sep, 2018.) 

Pfizer also has taken its beef with J&J to the FDA, asking the regulator to smack down marketing materials that suggest biosimilars are inferior products. (Also see "Pfizer Wants FDA To Stop Sponsor Promos From Implying Biosimilars Are Inferior" - Scrip, 28 Aug, 2018.)

Doubling-Down Despite Biosimilar Challenges

Regardless of the competitive pressures, the company has doubled-down on its biosimilars investments, deciding recently to pull those products out of Pfizer's Essential Health business segment and include them in its Innovative Health group.

Pfizer Essential Health President Angela Hwang said during the company's third quarter earnings call that progress has been made in the biosimilars portfolio with many US payers, but negotiations with commercial payers still are difficult, because of "J&J's exclusionary contracting" around Remicade.

"However, our portfolio is changing in that we are now venturing from just Inflectra alone to entering the oncology biosimilar space, where we see very different dynamics here and are also excited about this growth," Hwang continued. "This is a market that has already seen the entrance of biosimilars in the form of filgrastim, and there has already been really good uptake of filgrastim in the US."

She described "different dynamics" in the oncology setting, such as shorter duration of treatment that means patients cycle through anemia or neutropenia therapy faster than arthritis therapy.

"That is going to enable payers and customers to transition patients from the originator molecule to biosimilars much more quickly, thereby allowing them to benefit from the savings," Hwang said.