Pharmaceutical Technologist - March 2008 - (Page 11)

Market watch: biosimilars Market overview Biologics are a rapidly expanding drug class and have already garnered a significant share of the global pharmaceutical and biotechnology market. These drugs are expensive and, therefore, high-value generators. Top-selling biologics include: ● erythropoietins (EPO) ● cancer monoclonal antibodies ● insulin and analogs ● interferon beta ● growth factors ● enzyme replacements. Eprex (an EPO product of Johnson & Johnson) is already facing biosimilar competition because of its patent expiry. Sales of growth factors, insulins, interferons and other EPOs are likely to be affected by biosimilars. However, the impact of biosimilars on insulins is likely to be minimal as the global insulin market is dominated by strong players such as Novo Nordisk, Eli Lilly, and Sanofi Aventis. In addition, the advent of novel insulin delivery techniques, such as inhaled insulin, have taken the global insulin market to the next level. Overall challenges To survive in the biosimilar marketplace, players must possess: ● Monetary strength. ● The expertise to conduct clinical trials, or the funds to outsource trials. ● Robust technology that can manufacture high-quality biosimilars. ● Professional marketing. Because biosimilar players view this market as a potentially huge revenue generator they are equipping themselves appropriately. Various mergers and acquisitions (M&As) are taking place, such as Teva Pharmaceuticals’ (Israel) recent acquisition of CoGenesys (MD, USA). The leading players already making a foray into the biosimilar industry include Teva, Sandoz (Germany), Barr Pharmaceuticals (NJ, USA), Stada (Germany), BioGeneriX (Germany), and Bioton (Poland). The EU and US are the main marketplaces for generating significant revenue, but the complexity of biosimilars has made regulators wary. Although there is a lack of clarity in the overall approval process, the EU has progressed much more than the US. This is evident from the fact that the EU has approved biosimilar versions of EPO and growth hormone. Despite the reluctance of physicians, EU governments may use the low-cost feature of biosimilars to reduce healthcare budgets. In the US, regulatory hurdles restrain market entry, but spiralling healthcare costs mean that cheaper biosimilars are likely to make inroads into the market to reduce out-ofpocket costs and co-payments. As FDA does not allow substitutions for biosimilars, the market will be a secure place for the approved version, meaning that the company marketing the approved biosimilar has no fear of losing revenues. Though regulatory processes have been the deterring factor in the US and EU, the situation is very different in developing countries such as India and China. Biosimilar versions of human growth hormones, insulins, EPOs and interferons are readily available in these countries, where there is a high demand for low-cost drugs. The governments are favouring the growth of biotech products and have increased investments in biotech R&D. These booming generic markets in India and China are solid platforms that manufacturers can use to establish themselves in the national and international biosimilar markets. Future trends Biosimilar competition in the US has been delayed because of various factors, but with the advent of proper legislations governing approval processes, the future is likely to be full of fierce competition for biosimilars. In Europe, generic drug companies believe that the biosimilar industry is very rewarding, as the price of biosimilars is usually 20–40% lower than the original branded drug. The return on investment is also high, providing a lucrative market to venture into, and the future is likely to witness the entry of many new players in the biosimilar market. Aggressive marketing campaigns, continuous medical education and governments fostering low-cost generics to reduce healthcare costs will eventually change physician and patient opinions towards biosimilars. Players in the biosimilar market will battle to introduce high-quality drugs combined with innovative, patient-friendly drug delivery/dosing options. Very few companies have the research, manufacturing and marketing capabilities to individually launch biosimilars and this will warrant ample M&As in the competitive landscape. Licensing deals and partnerships are also likely to become common options for companies. Initially, the biosimilar market is expected to experience slow growth in the coming years. Profits will be low in the short term because of high developmental costs, but the penetration of biosimilars will likely increase in the medium- to long-term. Market players are expected to gain revenues as market penetration increases and the huge potential in the biotech arena is waiting to be captured. PT Sylvia M. Findlay is an industry analyst, pharmaceuticals and biotechnology, healthcare for Frost & Sullivan, Chennai, India. Key points ● ● ● ● ● Although biosimilars are often lower priced than innovator brands, concern regarding their similarity exists in the minds of physicians and patients. Regulatory issues surrounding the approval of biosimilars have formed major barriers to market entry. Very few companies have the research, manufacturing and marketing capabilities to individually launch biosimilars and this will warrant ample M&As in the competitive landscape. Profits will be low in the short term because of high developmental costs, but the penetration of biosimilars will likely increase in the medium- to long-term. The future is likely to witness the entry of many new players in the biosimilar market. www.ptemagazine.com 11 http://www.ptemagazine.com

Table of Contents Feed for the Digital Edition of Pharmaceutical Technologist - March 2008

Pharmaceutical Technologist - March 2008 Contents News Morpheus Market Watch E-procurement Means Lean Procurement The Rational Enquirer Simulating for Success Q&A

Pharmaceutical Technologist - March 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.