Momentum for Biosimilars is Building. What’s Next?

Posted by Tom Penrice on Tue,Apr 23, 2013 @ 06:00 PM

Overview:
Both the FDA and the EMA are showing increasing levels of support for biosimilars, while physician resistance is declining in both the US and Europe. Cost is a big driver, among other factors.[1]

Biosimilar Drug Development Trends in Europe – Timing is Everything

Biosimilar drug development trends in US and European pharma drug development industryResistance to biosimilars in Europe is declining just as patents are expiring on many highly lucrative biologics, among them Herceptin (trastuzumab), Remicade (infliximab), and Rituxan (rituximab).  Significant cost advantages, important regulatory changes, and a growing openness to new methods of scientific analysis have combined to drive the trend.  Although the financial performance of biosimilars has been disappointing to date, nevertheless the perceived opportunities are attracting innovators and new players.

Why the Resistance to Lower Cost Biosimilars?

Resistance to date has been due primarily to two factors: pushback from physicians reluctant to switch patients to a biosimilar drug, and the lack of a systematic way for pharmacists to easily substitute a biosimilar for an originator drug.  As a result, the returns from biosimilars in Europe have been unimpressive to date. 

Meanwhile, in the US the FDA has yet to receive its first biosimilar application, despite the fact that for two years a regulatory pathway has been provided.  Innovator lobbying at the state level is a major factor contributing to the quagmire, whereby bills are being pushed to make it more difficult for automatic substitution of biosimilars for branded biologics to take place.

Doctors Signing On – Slowly

Unlike the FDA in America which has decision making power for all 50 states for such issues,  the EMA must leave it to each national government to make their own rulings on biosimilars.

In Norway, physicians are slowly growing more positive toward biosimilars partly due to price, a growing factor given sluggish European economies and rising health care costs, according to a cardiologist and medical director at Norway’s regulatory agency.

Economic incentives to prescribe cheaper drugs are also affecting physician acceptance of biosimilars in some northern European countries. For example, in Germany prescription quotas for generic drugs are imposed on physicians as a way to keep within allocated budgets. It is also helpful that Germany has declared copycat EPO’s to be the equivalent of the originals. Although not legally binding, these quotas in Germany have contributed to copycat EPO penetration growing from 30% to 39% in the past three years.[2]

Biosimilars - Impact on Price and Profits

The downward pressure on price due to the growing adoption of biosimilars has resulted in innovators making deep price cuts in order to retain market share, including with hospitals. As a result, payers are enjoying the savings.  Savings in Germany are estimated at over €1 billion per year by 2017.

Changing Definitions and Perceptions

EMA is increasingly accepting biosimilars due in part to recognizing that analytical science gains have made it possible to supply proof of similarity without requiring the time and expense of clinical data.  Last year EMU changed it’s description of biosimilars from products deemed “similar but not identical” to one stating, “the active substance of a biosimilar and the reference medicine is essentially the same biologic substance, though there may be minor differences”, thereby making it more difficult for innovators to make the case for their originals. 

FDA More Open to Biosimilars?

The FDA, while arriving late to the game, may be more open to biosimilars than EMA in terms of an easier acceptance of the analytical science argument for determining similarity. By comparison, the EMA appears to rely more on a clinical trial mindset. The US approach has not been without its rewards, as competition and savings can be significant. According to IMS Health, the US health care system has saved $1.6 billion since launch on Sandoz / Momenta Pharmaceuticals Inc.’s m-enoxaparin, the first of two competing complex copies of Sanofi’s Lovenox (enoxaparin).

Long Term Impact of Biosimilars on the Pharma & Biotech Industry

Now that payers are alert to the cost savings potential of biosimilars, there can be little doubt that the pressure to drive down prices will continue unabated. Indeed, the payers, especially the government payers, have the capability to change the game very quickly.

If prices and profits were to drop sharply and frequently for originals due to growing inroads made by biosimilars, one must wonder to what degree investment in research by innovators may suffer.


[2] http://www.elsevierbi.com/publications/the-pink-sheet/75/6/germany-may-need-to-jump-start-its-stagnant-biosimilars-market 


Pennside Partners is a leading pharmaceutical and biotech consulting firm with over 25 years experience. They are headquartered in the United States, the United Kingdom and Switzerland.

Tags: Pharma Brand Strategy, FDA, Drug Developers, Biosimilars, Health Care Costs, EMA

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Posted by Tom Penrice on Mon,Jan 07, 2013 @ 04:59 PM

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