The UK’s Competition and Markets Authority (CMA) on Thursday closed an investigation into an alleged anti-competitive discount scheme that Merck Sharp & Dohme Limited (MSD) designed to delay or reduce competition for its Crohn’s disease and rheumatoid arthritis treatment Remicade (infliximab).
According to the CMA, the investigation into the MSD discounting scheme found that it may have kept infliximab biosimilars from competing with Remicade, but in reality, the scheme did not work.
“This is because, at the time that the discount scheme was introduced, the market worked differently from the way MSD had envisaged when it designed the scheme,” CMA said.
How it Worked
After the main patent for Remicade expired in February 2015, and two biosimilars, Inflectra and Remsima, were introduced in the UK from March 2015, MSD introduced a scheme that sought to induce the National Health Service (NHS), which spent over £100 million ($132 million) annually on Remicade, to remain loyal to Remicade and to make it harder for suppliers of biosimilars to compete with MSD.
“Under MSD's Discount Scheme, switching from purchasing Remicade to purchasing Biosimilars risked the price of Remicade increasing for all future purchases of Remicade, which, in turn, risked the NHS having to pay more in total for purchases of infliximab products,” the CMA report says.
But cost was not the only factor that NHS considered, and the report notes that the degree of clinical caution within the NHS and the NHS attitude toward using biosimilars were both different from what MSD had assumed.
“When MSD's Discount Scheme was introduced, clinical caution varied both within and between different regions and sub-regions and was less than MSD expected in a number of regions and sub-regions. In particular, there were a number of Trusts which decided to adopt Biosimilars soon after they became available, not just for new patients (which MSD had expected to be the case generally), but also for existing patients (which MSD had not expected to be the case),” the report says.
Despite the CMA’s decision to close the investigation, it still warned against other companies trying to impact competition.
“The CMA’s investigation serves as a warning to businesses which design discount schemes to protect their dominant market position, that they risk breaching UK competition law: had MSD’s scheme in practice been likely to prevent or limit competition from rivals, the company could have faced severe financial penalties,” CMA said.
The investigation follows a similar investigation in Canada, which was closed last month
, centered on whether Janssen was engaging in practices that were predatory and exclusionary with Remicade. Similarly, Pfizer filed a lawsuit
over anti-competitive practices related to Remicade.