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Published on 17/11/08 at 06:14am

Key decision makers will shape the biosimilars landscape

With many biologic drugs used to treat increasingly common diseases such as cancer and arthritis, the demand for biologics is set to increase. However, due to their high price and the need to constrain pharmaceutical expenditure in Europe and the US, biosimilars are emerging as a cheaper alternative. While the outlook for biosimilars is positive, they must deliver the cost-savings they promise.

With the approval framework for biosimilars already in place, and biosimilars for two biologics drug classes (recombinant growth hormone and epoetin alpha) already on the market, Europe is well ahead of the US, which is still outlining the details for biosimilars approval. However, biologics use in Europe is comparatively low. Sales of anemia drug epoetin in 2007 totaled just $2.2 billion in the five major markets of Europe, compared with $8.3 billion in the US. The US market therefore represents a significantly more profitable biosimilars market than Europe, albeit one that has yet to take off.

While Europe is driving the uptake of biosimilars, some member states are likely to be more accepting than others. Biosimilars uptake in the traditionally more generics-friendly markets of Germany and the UK, for example, will be more rapid than in countries such as Spain and Italy, where generics use has been relatively low. Indeed it is unsurprising that Germany was the first country in which biosimilar epoetin was launched, in 2007.

Given the manifold hurdles associated with biosimilars development (technical, regulatory and strategic), the most likely industry contenders are the larger generics companies. For example, two of the biggest players in the generics market, Sandoz and Teva, are at the forefront of the current biosimilars wave. However, the more specialised nature of this sector will promote the creation of partnerships, or spur acquisitions of smaller, more niche biotech companies which have the technical expertise but lack the marketing infrastructure of the larger generics companies.

US payers are positive about the prospect of biosimilars, with most intending to promote their use by way of a 'step-edit', making it mandatory for patients to use the biosimilar first. They believe that price is an important factor in ensuring the uptake of biosimilars, with the consensus being that the greater the discount compared to branded drugs, the more likely payers would be to promote biosimilars use. Rebates offered by both branded and biosimilar manufacturers rather than list price will be the primary battleground for biosimilars in the US, as this leaves innovators with more room for maneuver.

US payers are perceived to have more clout than those in Europe, where physicians hold the balance of power. However, as biosimilars gain acceptance with time on the market, and safety and efficacy is no longer an issue, there is likely to be a shift in power away from physicians towards payers, as physicians will have no valid reason not to prescribe biosimilars. In the short-term therefore, physicians are regarded by the industry as having an important role to play in the unfolding biosimilars industry, more as a stakeholder group that must be 'on side', than as one which will particularly drive uptake.

Physicians are guardedly positive about biosimilars, with uncertainties due to lack of time on the market the major resistor for this group. Hospital pharmacists are likely to promote biosimilar uptake if it is financially advantageous to do so, although like physicians, they have safety and efficacy concerns which will diminish with time on the market. Hospital pharmacists are seen by some in the industry to be pivotal to driving biosimilars uptake, given their role in drug procurement, and generally greater cost awareness.

Estimates of the potential cost-savings that biosimilars will bring vary widely, from $14 billion to $108 billion over a 10-year period in the US. While much of this variation is related to differences in forecasting methodology, a great part is due to a genuine uncertainty regarding how biosimilars will be received. The complex nature of biologics, whereby even small differences in the manufacturing of the drugs can have large clinical implications, makes demonstrating bioequivalence something of a minefield. Because of their lack of time on the market, biosimilars are very much an unknown quantity, and so stakeholder opinion will be vital to their success.

Related research

Biosimilars Series: Stakeholder Analysis

Biosimilars Series: Strategic issues - Potential remains uncertain

Biosimilars Series: Regulatory and development issues - hurdles exist but are surmountable

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