J&J and Merck reach compromise on arthritis drug rights
pharmafile | April 19, 2011 | News story | Sales and Marketing | Johnson & Johnson, Merck & Co, Remicade, Simponi
Johnson & Johnson and Merck & Co have agreed to split the regional rights to arthritis drugs Remicade and Simponi after 18 months of wrangling.
They were in dispute over the rights to Remicade and new arthritis treatment Simponi after Merck merged with J&J’s marketing partner Schering-Plough in November 2009.
The small print of J&J’s agreement with Schering-Plough stated that if another company acquired Schering-Plough, J&J could take back its marketing rights and the success of Remicade in particular meant there was a lot at stake for both companies.
The drug made $7.3 billion in combined sales last year, making it the second-biggest product for Merck and the top-selling drug for J&J, and the dispute has dragged on for nearly two years.
The agreement will see Merck hand over exclusive marketing rights for Remicade and Simponi to J&J’s subsidiary Janssen in a number of territories.
These include Canada, Central and South America, the Middle East, Africa and Asia Pacific and in return, Merck will retain exclusive marketing rights throughout Europe, Russia and Turkey from 1 July.
The retained territories represent over a third of Merck’s 2010 revenue – or around $2.8 billion – from both drugs.
All profit from Merck’s distribution of both products in its territories will be split 50-50 between the two companies.
The current agreement sees the split at 58 to 42% in Merck’s favour, but both companies said in a joint statement this would equal out by 2014.
Johnson & Johnson will also receive a one-time payment of $500 million by the end of the month.
Both chief executives said they were ‘pleased to have reached a new agreement’ for such an important drug.
Kenneth Frazier, president and chief executive of Merck, said his company will have a strong footprint in the inflammatory market and both Remicade and Simponi will be important contributors to the firm’s overall portfolio.
Frazier added Merck was “committed to ensuring a smooth transition for customers and patients in the territories being relinquished, with no impact on product supply”.
Ben Adams
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