A major French hospital group has chosen a cheap copycat version of a top-selling drug for treating its patients with rheumatoid arthritis, Crohn’s disease and psoriasis in a victory for a new type of medicine known as biosimilars.   

In a document seen by Reuters, the central purchasing agency for the Assistance Publique – Hôpitaux de Paris (AP-HP) said on Friday it had decided to buy the biosimilar version of infliximab from Hospira (HSP.N), after the company offered a discount of some 45 percent to branded Remicade.

AP-HP caters for nearly a quarter of the country’s population and the tender decision will allow the copycat to make significant inroads in the French market.

Hospira, which is being acquired by Pfizer (PFE.N), sells its drug under the brand name Inflectra. The medicine was developed by South Korean firm Celltrion (068270.KQ) as a copy of Remicade, the original branded drug from Merck & Co (MRK.N) and Johnson & Johnson (JNJ.N).

Remicade, which has annual European sales of about 2 billion euros ($2.2 billion), and the biosimilar both contain the same antibody, known as infliximab. The drugs are given by intravenous infusion.

Because biotech drugs are made from living cells it is impossible to manufacture exact copies, as happens with simple chemical medicines, so regulators have come up with the notion of approving products that are similar enough to do the job.

Infliximab is the first of a series of blockbuster antibody-based drugs to face such copycat competition, although many more biosimilars are now in development, posing a threat to leading biotech drugmakers such as Roche (ROG.VX) and AbbVie (ABBV.N).

Citigroup analysts have estimated biosimilars will result in at least $110 billion of value being transferred worldwide from innovator companies to copycat producers between 2015 and 2025.

The discount offered will be an important factor in determining their uptake.

The AP-HP said its tender would result in it paying some 6 million euros for a year’s drug supply, a saving of around 45 percent.

Some tenders in smaller countries have seen biosimilar infliximab sold at steeper discounts, with Norway offered a 69 percent discount by another supplier.

Overall, however, Merck said at its first quarter results in April that biosimilar Remicade was typically being offered at around 45 percent less than the original brand in Europe, against initial expectations of about 30 percent.



(Additional reporting by Ben Hirschler and Andrew Callus; editing by Elaine Hardcastle)

Source: Reuters