JNJ Johnson and Johnson

By Jonathan D. Rockoff 

Pfizer Inc. said Monday it will begin selling a biosimilar version of blockbuster rheumatoid-arthritis treatment Remicade in late November at a 15% discount off the brand-name drug's list price.

The announcement is likely to set up a fierce battle, in the courts as well as in contract talks with health insurers, between two of the biggest drug companies in the world by sales. Pfizer is launching its version, called Inflectra, before the resolution of an ongoing patent dispute with Remicade's maker Johnson & Johnson.

Johnson & Johnson in a statement promised to fight the biosimilar's launch on a range of fronts. The company vowed to "defend our intellectual property rights" and to "compete through a variety of innovative contracting options."

Johnson & Johnson also noted Remicade's "well-established profile" built over 22 years of use in 2.6 million patients and that Inflectra can't be automatically substituted for Remicade.

Pfizer's Inflectra would be only the second biosimilar to go on sale under the regulatory framework established as part of the federal health-care overhaul to bring competition to the high-price biotech drugs, much like generics did with traditional pills.

Despite the promise, analysts say the launch of the first biosimilar -- Zarxio from Novartis AG, a version of Amgen Inc.'s Neupogen -- has gone relatively slowly. Analysts expect use will pick up, however, as more of the copies enter the market and doctors become more comfortable prescribing them.

Remicade is a lucrative target. The drug is one of Johnson & Johnson's top selling products, notching $4.5 billion in U.S. sales last year.

J&J could lose $1 billion in Remicade revenue in 2017 due to Inflectra, though the company has new drugs whose sales could help offset the loss, J.P. Morgan analyst Michael Weinstein said in a research note. "Inflectra's 15% discount should provide enough of an incentive to help attract new patients to start on Inflectra, but probably won't be enough of a discount to entice stable patients to switch over," Mr. Weinstein wrote.

A year's treatment for a typical patient lists for $28,945, the J&J spokeswoman said, though the cost varies depending on the patient's weight and condition.

J&J says the average price paid for Remicade, after discounts, is 30% less than the list price, and nearly half of commercially insured patients don't have a copay under their medical benefits. J&J also says it provides assistance that reduces the out-of-pocket cost of an infusion to no more than $5.

Health insurers have complained that drug companies have weakened the potential cost savings from biosimilar competition by raising the list prices of the original brands far above the 15% to 30% discounted list price expected for biosimilars.

Pfizer plans to list a vial of Inflectra for $946.28, a company spokeswoman said. The biosimilar is also approved for treatment of certain patients with Crohn's disease and ulcerative colitis.

Write to Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com

(END) Dow Jones Newswires

October 17, 2016 19:01 ET (23:01 GMT)

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