Research firm Decision Resources predicts that the rheumatoid arthritis market will modestly grow to $15 billion in the next decade. RA patients already have access to more than enough drugs to find an adequate treatment combination, and cheaper alternatives may become available. But pharma companies continue to treat RA like a growth market. Abbott built spinoff AbbVie Inc (NYSE:ABBV) around the $9 billion Humira, and Pfizer Inc. (NYSE:PFE) brought a new class into the mix.
Will the bevy of RA blockbusters run out of steam?
The old guard
Rheumatoid arthritis is a chronic inflammatory condition that primarily affects the joints. Patients work closely with doctors to find an adequate treatment regimen — which can help manage the disease and prevent potential co-morbidities including heart disease, cancer, and osteoporosis.
Finding the right RA treatments can prove problematic, so once something works, patients usually stick with that drug for an extended period of time. Generic drug methotrexate has long been the first-line treatment in RA. Methotrexate works for the majority of patients with early-stage RA and offers fewer safety risks than other disease-modifying anti-rheumatic drugs.
Methotrexate isn’t always enough, especially in later stages of the condition. Patients might take methotrexate with a tumor necrosis factor, or TNF, inhibitor — the class with the branded blockbusters.
Humira from AbbVie leads the anti-TNF biologic pack because of its effectiveness and comparatively decent safety profile. The drug had tremendous sales of $9.3 billion last year. AbbVie doesn’t have to split the costs of this drug with anyone, unlike the deals in place for Enbrel and Remicade. But the newly born spinoff is overly dependent on Humira’s continued success.
Remicade has a disadvantage to the other two blockbusters because it’s administered intravenously in a clinical setting, whereas patients can self-inject Humira or Enbrel at home with a pen-style device. Despite this inconvenience, Merck & Co., Inc. (NYSE:MRK) reported net sales of $2.1 billion for Remicade last year, and Johnson & Johnson (NYSE:JNJ) reported $6.1 billion. The companies fought a legal battle over which company would get what when it came to this drug. When the dust settled, Johnson & Johnson stood on the winning side. Merck’s looking for any victories it can get now that the blockbuster Singulair fell off patent.
Enbrel had 2012 revenues of $957 million for Pfizer and $4.2 billion for Amgen, Inc. (NASDAQ:AMGN). Pfizer was marketing the drug outside the U.S. and Canada while receiving a percentage of annual gross profits from Amgen. The North American collaboration agreement expires this fall. Amgen will then pay a declining percentage of profits for three years.
Amgen might celebrate decreased payments, but Pfizer’s up to RA plans of its own.