[Ip-health] [e-drug] Price discount for biosimilar infliximab obtained by pool procurement

Donald W. Light Jr. dlight at princeton.edu
Thu Feb 12 11:54:57 PST 2015

Very interesting, but realize that after these big, double discounts, a lot of profit may well remain. Manufacturing costs in volume are very low; so the volume matters a lot. As for R&D costs, what matters to companies is their net R&D costs, after all tax credits, deductions and after all research supported by the public. Overall, 84 percent of all funds to discover new medicines comes from public sources. See Chapter 3 in http://announcementsfiles.cohred.org/gfhr_pub/assoc/s14881e/s14881e.pdf.

Donald W. Light
Cell: 609-216-0071

On Feb 3, 2015, at 3:35 PM, Kirsten Myhr wrote:

E-DRUG: Price discount for biosimilar infliximab obtained by pool procurement


This article appeared 29 January 2015 in a journal free to health personnel
(plenty of adverts from pharmaceutical companies pay for that)  in Norway
called Dagens Medisin (Medicine Today). Norway issues tenders for medicines
to all hospitals through a procurement cooperation. Normally the discounts
are confidential. With the discounted price one year's treatment cost per
patient with Remsima will be NOK 43.352.-, with Remicade NOK 139.063.-

Huge drug discount astonishes

There has been great excitement ahead of this year's tender for tumor 
necrosis factor inhibitors (TNF) in Norway.

Thursday the Norwegian Drug procurement cooperation (LIS) published the
Norwegian national hospital tender for the infliximab biosimilar

As last year's tender became historical when the Norwegian authorities for
the first time recommended a biosimilar drug rather than the original - this
year's price reduction offered by Orion Pharma astonishes the industry as
well as the health care professionals.

Last year's discount proposed in Norway was 39 percent: Orion Pharma
outdistanced pharmaceutical giant MSD/Merck's bestseller Remicade with its
biosimilar drug Remsima (infliximab).

This year Orion Pharma proposed a 72 percent price reduction for  Remsima,
an offer at a 69 percent lower cost than the price offered by MSD/Merck for
their Remicade.

- It's a far lower price than many had anticipated. If this is the price
that is going to apply in other countries, many more patients will have
access to this type of medicine, says Torfinn Aanes, head of LIS - the
Norwegian Drug procurement cooperation.

Dr. Steinar Madsen, medical director at the Norwegian Medicines Agency, who
is a well known proponent of biosimilars, says he is surprised to see the
large discount on the  biosimilar infliximab.

- I had hoped to see discount around 50 percent, but I did not anticipate a
72 percent price reduction. Infliximab patents expires in the rest of Europe
in February 2015. With the prices we have seen today, the biosimilar
infliximab will probably be a game-changer in Europe, he says.

-  I guess the originator industry is quite worried. The most expensive
TNF-inhibitors are now more than five times as costly as Remsima in Norway.
In addition, we see that the price of some other TNF-inhibitors have been
considerably reduced, probably in an attempt to compete for market shares
against Remsima, says Madsen.

- This illustrates one important aspect of biosimilars, their chilling
effect on prices in general. It will be hard to launch similar drugs,
whether biologicals or small molecular drugs at a substantially higher
price.  But above all, this is a great day for our patients, as we will be
able to extend treatment to many more in Europe.

Norway has a system with budget for DMARDS (biological disease-modifying
anti-rheumatic drugs within the health care)

An annual tender system has created opportunities for lowering the costs
of such drugs. Each company is invited to offer a price for their own
product(s) for the following  year. A committee is calculating the annual
cost for the first year on different indications based on the Summary of
Product  Characteristics (SPC) for  each drug

Biosimilar infliximab (Remsima and Inflectra) was approved by the European
Medicines Agency (EMA) and the Norwegian Medicines Agency in the fall 2013.

Ms Kirsten Myhr, MScPharm
Mobile: +47 41638747
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