(Reuters) - Pfizer Inc (>> Pfizer Inc.) said on Monday it will begin shipping its biosimilar version of Johnson & Johnson's (>> Johnson & Johnson) blockbuster rheumatoid arthritis drug Remicade in late November at a 15 percent discount to current wholesale prices.
The Pfizer drug, to be sold under the name Inflectra, is already available in Europe and other overseas markets and would be the second biosimilar medicine available in the United States.
As it is not possible to produce exact copies of biotech drugs made from living cells, the cheaper versions - referred to as biosimilars rather than generics - are intended to provide cost savings compared with pricey biologic medicines.
Remicade is J&J's biggest selling drug with U.S. sales of about $5 billion a year.
J&J's forecasts for 2016 had assumed no competition from a Remicade biosimilar this year. Its shares slipped nearly 0.5 percent to $118.00 in after-hours trading.
J&J said in an emailed statement that it considers any sales by Pfizer of a Remicade biosimilar to be an "at risk launch." That could entitle the company to triple damages if Pfizer is found in court to have infringed Remicade patents.
A Pfizer spokeswoman said the company could not comment on ongoing litigation.
Pfizer's pricing for the drug below Remicade wholesale costs does not take into account discounts to health insurers, distributors or other purchasing organizations, the company said.
JP Morgan analyst Michael Weinstein, in a research note, forecast a Remicade revenue decline of just over $1 billion in 2017, costing J&J 20 cents in earnings per share.
"Inflectra's 15 percent discount should provide enough of an incentive to help attract new patients ... but probably won’t be enough of a discount to entice stable patients to switch over," Weinstein said.
J&J said it expects to be competitive with the Remicade biosimilar.
"We intend to compete through a variety of innovative contracting options, discounts and rebates to payers, providers and pharmacy benefit managers to ensure Remicade remains an affordable option for patients and physicians," a J&J statement said.
In addition to rheumatoid arthritis Inflectra, like Remicade, is also approved to treat Crohn's disease, ulcerative colitis, psoriasis, psoriatic arthritis and the spine condition ankylosing spondylitits.
Novartis (>> Novartis AG) last year began selling the first biosimilar in the United States, a cheaper version of Amgen's (>> Amgen, Inc.) infection fighter Neupogen called Zarxio.
Several companies are developing biosimilar versions of the top-selling biotech medicines for rheumatoid arthritis and cancer.
(Reporting by Bill Berkrot and Ransdell Pierson; editing by Bernard Orr, G Crosse)
By Bill Berkrot