Biosimilars are on the agenda of several players in the pharmaceutical industry. Several companies’ new leg of growth seems to be the creation of a biosimilar franchise. The question is “How real are the opportunities in an ever growing competitive environment?”
In the next 5 years, Biosimilars could hit the market to compete with some key biologics cumulating sales of more than EUR40 billion. It results in both a tremendous opportunity for manufacturers and savings for the tight healthcare budget. The result of a widespread use of biosimilars, could exceed EU33 billion. If manufacturers can increase current adoption level, it could even represent EUR100 billion cumulatively. Another striking example, the first biosimilars to hit the market in the US could lead to saving of 6 billion until 2020. Of course, those estimates have strong assumptions on the adoption level. Market access strategies and tactics will be the main enabler of such high adoption.
This represents significant untapped potential but not all markets are ready to profit from the benefits offered by the forthcoming generation of biosimilar products. In some countries the actions of payers and policy-makers may be hampering competition in the marketplace.
Right measures should be taken by regulators to incentivize the 50 distinct biosimilars currently in development. It should result in huge revenues for participant and in a highly competitive market place. Competition is the masterpiece in the biosimilar value proposition. Competition drives innovation. Innovation is necessary in the biosimilar market as it pushes new products to markets in new therapeutic area starting a virtuous cycle leading to healthcare systems sustainability.
At present however, the situation across the EU countries is very heterogeneous with varying levels of education and incentivization among all stakeholders. A functioning competitive market is therefore needed to deliver sustainability for payers, physicians and manufacturers. The exact geographic field has yet to be defined. Emerging market may be interesting for Biosimilars. They have a potential to solve the affordability issue faced by many patients. Choosing the right market and therapeutic area will be key for potential manufacturer.
A regulatory framework is not the only notable point of the biosimilar market. Barriers to entry are not as low as they seem to be. In fact, companies are struggling to produce biosimilars. Teva with the EpiPen case is an obvious example. Will that mean that the main actor on the market would only have a research based origin? Sandoz is counter example, currently one of the market leader. What’s certain is that first mover advantage will support companies already well in place.
Spanning in this competitive environment, further challenges arise
- Differentiation: from multiple sources, trying to differentiate biosimilar versus the originator is not a viable option. Originator products can offset the price advantages with rebates and service agreement. Therefore how should the biosimilar brand be positioned? What is the value that should be communicate to the payer, physician and patients?
- Patients that are well controlled on the originator drug are satisfied with their treatment and difficult to convince to switch
- Physicians used to prescribe the originator drug require education on how to initiate new patients on biosimilars and how best to switch patients from the originator to the biosimilar
The share of the EUR100 billion that will materialize in both savings for the government and revenue for the leading players will depend on the ability of biosimilars’ manufacturer to address those challenges of patient satisfaction, physician prescribing habits and differentiation. Market access will definitively have to take actions to enable manufacturers companies to compete appropriately.The right discounts need to be in place versus the originator. 40 to 50% seems to be reasonable and can protect the market share when added to the first mover advantage. Nevertheless, price is only a part of the equation as there is still reluctance from some physicians and payers to switch. Producing the right evidence early in the process will surely remain key in any launch strategy. A good strategy would be to work with payers to pro-actively discuss biosimilars and required evidences. The earlier the discussion starts the better the outcome as the payers are keen to be part of the process.
Interested to know how to best address those challenges and optimize the biosimilar launch process? Contact me Thomas Hasmann – Vice President Market Access at HighPoint Solutions