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Biosimilars: About to Change the US Pharma Industry For Good?

Date: 25 September 2015

The history of biosimilars

Although biosimilars have been available on the European market for the last ten years, adoption in Latin America, Asia and the US has only been a very recent thing. As a result of these developments and growing acceptance of the practice, the global market is due to grow at a compound annual growth rate (CAGR)of 49.1% between 2015 and 2020, according to an Allied Market Research report.

McKinsey & Company’s recent insight document revealed that R&D investments for biosimilars are at an all-time high.  Despite this, revenues generated from biosimilars have been fairly poor thus far with cumulative sales only having reached $1.2 billion since 2006.  However, it is predicted that the market  has the potential to be worth $20 billion by 2020.

Why are firms interested in developing biosimilars?

Biosimilars are lauded for their ability to provide affordable access to important drug-based therapeutic treatments to patients who require them. This is then coupled with  savings due to a reduction in R&D costs. Leading market experts claim that biosimilars could provide up to $250 billion in savings (check this fact!?) to the US Healthcare system over the next decade.

What has triggered these recent changes?

Historically, Europe has been the dominant force in the biosimilars market, but with the introduction of the Affordable Care Act by President Obama in 2010 coupled with the fact that by 2016, biologic products with aggregate sales of c$60 billion are expected to be off-patent in the US, the US has a clear pathway for biosimilars that is only going to grow. This was confirmed as the US secured a first biosimilar entry product through Novartis/Sandoz’s Zarxio breakthrough in September 2015.

Novartis/Sandoz is offering Zarxio at a 15% discount to the original drug produced by Amgen Inc., known as Neupogen. The threat of such practices could result in a loss of $50 billion in annual sales of drugs made by competitor companies, a Bloomberg report states. In eastern European and Scandinavian markets, where certain biosimilar drugs have been available for some time, discounts range from 30% to 72%.

Commenting on such practices, Laurent Chanroux, the associate director at Research Partnership, said: “In some of the eastern European and Scandinavian markets in which these drugs have been launched for some time we have seen uptake primarily driven by the discounts offered.”

As such the US can learn a lot from the European biosimilars market. In the EU5 countries (France, Germany, Italy, Spain and the UK) biosimilar penetration is between 30%-40%; in the UK, 70% of available filgrastim – the basis for Zarxio – is biosimilar. With uncertainty surrounding how the market will evolve, it is essential that the US and other countries looking to expand their biosimilar offerings analyse the data available from regions and businesses with a history of biosimilar experience.

As well as looking at pricing structures and potential savings, understanding and remaining aware of the regulatory changes that are coming into effect must be a priority. The FDA is hoping to pass more regulatory changes to encourage further expansion of the biosimilars market, and has released a number of Q&A documents on the subject in the last few weeks.

Investments are reflecting this expansion, with an estimated 25% of biologics sales relating to off-patent products being made in 2020. However, in order to execute an effective biosimilar market plan companies will need to utilise the skills of biologics innovators and seek partnerships with biosimilar sponsors.

Leading pharmaceutical companies have paired up to better explore the opportunities offered by biosimilar products. Amgen and Actavis have joined to run biosimilar projects, and Baxter, Merck and Biogen have all struck similar deals. Due to the infancy of the industry, however, some companies have had to dissolve new partnerships (Pfizer and Biocon are a prime example) as the journey to biosimilar success is as yet unmapped. Intense development investment, significant clinical work and high costs can make the process difficult.

How can you take advantage of these changes?

Whether businesses or candidates decide to investigate biosimilars further, two things are certain: biosimilars are coming to the US and biopharmaceutical companies will need to evolve their commercial strategies to address them.

Those who invest in biosimilars early will surely benefit from the inevitable growth of the sector. From a candidate standpoint, entering the biosimilars market at the present time will mean gaining a foothold and experience in a soon-to-be hugely significant sector, as well as exposure to drug development with a focus on patient benefit.

In any new market, those that get in early are the ones who enjoy the benefits of the growth that follows – a rising tide lifts all boats. Candidates getting into the biosimilars industry early, are provided with a fantastic chance to expedite their career path as a result. With biosimilars being a new market, employers have to show a degree of flexibility from a skill-set perspective with who they bring into new roles. That said, as the market develops, this will change.

In Europe where the biosimilars market has been buoyant for several years now, the demand by employers for candidates with biosimilars experience is increasing, thus raising the barriers to entry to become part of this area of the market. Some people will say that biosimilars are less scientifically interesting than novel drug development, and therefore the work is not ‘exciting’, however these people tend to ignore the bigger picture and the scale of the benefits for the payer and the patients.

People are naturally motivated by different things, but if you are looking to develop your skill set and find a way to drive your career progression forward, it is definitely worth looking into the potential of the biosimilars market now before the window to capitalise on this growth closes.

Through EPM Scientific’s international offices we have specialist experience working with European biosimilar buildouts. Be it through a biologics innovator approach, a biosimilar sponsors approach, or a blend of the two, EPM Scientific seeks to understand our clients’ commercial strategy and help them to expand both production and sales teams in this exciting sector.

With the imminent penetration of the biosimilars market in the US, are you prepared and positioned to take advantage of this significant new force, be that via team growth or from a new opportunity standpoint? Contact EPM Scientific today for career opportunities and assistance with growing your team. 

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