What's Next For The Biosimilars Market?

By Anna Rose Welch, Editorial & Community Director, Advancing RNA

Late last week, the FDA approved the first biosimilar from Novartis’ company, Sandoz. The drug, Zarxio (filgrastim), is the biosimilar to Amgen’s Neupogen, which is indicated to treat cancer patients suffering from neutropenia — a condition characterized by the loss of neutrophils (a common type of infection-fighting white blood cells). While the approval is certainly good news from a costs and innovation standpoint, the industry is still asking some key questions, including:

• What will we see in terms of cost benefits in the market — and when will we fully reap the benefits?
• Who else is fighting for their chunk of the biosimilar industry?

From some of the reading I’ve done the past few days — and in the weeks leading up to the approval — I think it’s safe to say the biosimilars market might not be as big or cost-effective as predicted — or at least not anytime soon. Here are some of the reasons why:

1. In the days leading up to the final approval, Prime Therapeutics (PT) released a new report that suggested biosimilars might not catch on as well as the industry hoped because of the number of development and regulatory hurdles manufacturers will face compared to generics. In the report, PT says manufacturers will only set sights on high-earning blockbusters in order to ensure they’re met with adequate returns, in turn leading to a smaller biosimilars market. Similarly, PT expects that declining sales from blockbuster biologics will be another contributing factor to a smaller biosimilars market.
2. Two recent articles from Forbes highlight the fact that cost savings, while predicted to hit more than $5.5 billion over the next 10 years, will be slow, to say the least. Since 2008, Sandoz’s biosimilar for Amgen’s Neupogen has been approved and available in the EU. There’s been a regulatory pathway in the EU for biosimilars since 2006. However, as Forbes columnist Bruce Japsen points out, the EU is only just beginning to see cost savings from this market segment. According to a KPMG report cited in Forbes, “Global biosimilars sales in 2013 reached only $1.3 billion, but by 2020, biosimilars penetration is expected to have delivered from $11 billion to $33 billion in savings across the European Union.” (These billions in savings are, of course, impressive, but there is a sizable difference between 11 billion and 33 billion.)
3. In his own column for Forbes, David Kroll expresses skepticism that the biosimilar will be that much cheaper than Neupogen, citing European prices as an example. In the EU, for instance, the biosimilar for Neupogen only boasted a 26 percent discount, which Kroll argues is much less than the discount one can get for a small molecule generic.
4. Another aspect to keep in mind when considering the pending value and growth of the biosimilar market is that doctors and patients might not be swayed by a lower price to prescribe/switch to a biosimilar, which would also hinder cost savings. In a recent article in San Francisco Business Times, Tufts University professor Joshua Cohen points out that a lack of familiarity with biosimilars was one factor keeping doctors from prescribing them in Europe. In the U.S., Tufts research found that, so far, about one-third of doctors would be willing to make the switch from the brand to the biosimilar.

As PT discussed in its report I referenced earlier, the market growth could be inhibited by the cost of biosimilar development and the regulatory difficulties facing biosimilars. After all, expected time to market for a biosimilar was an estimated 6-9 years, compared to 3 years for a small molecule generic, says Forbes and Pharmacy Practice News. However, there are a number of big companies currently at work in the space that either have drugs in development or have released drugs into the European market. As the San Francisco Business Times article reports, by 2020, the U.S. will have approved nine biosimilars. What names might we expect to see? Here are several (though certainly not all) of the companies contributing to the biosimilars market:

1. Hospira already has a number of biosimilars available in Europe, including Retacrit (epoetin zeta), Nivestim (filgrastim/Neupogen), and Inflectra (infliximab/Remicade). The company currently has plans to bring Nivestim and Inflectra overseas into the U.S. market. It also has lofty plans to tackle a biosimilar for the blockbuster Lucentis in the future.
2. While Amgen is going to be the first company to feel the biosimilar pinch, it’s certainly not being caught off guard, nor is it giving up without a fight. The company has been working on biosimilars for Avastin, Herceptin, Rituxan, Erbitux, Humira, and Remicade, eying launch dates between 2017 and 2019. If all goes well, the company could see upwards of $3 billion from its work in this space.
3. Teva snapped up CoGenesys several years ago to help establish a biosimilars platform and hit an $830 million sales target. The company was also working on a biosimilar for Neupogen, but ran into some legal issues with Amgen along the way, according to Globes. Until recently, the company was teamed up with Lonza for the development of copycat drugs, ending the partnership in 2013.
4. Merck is working on a biosimilar to Sanofi’s Lantus, MK-1293, for patients with diabetes types 1 and 2. The company has also been in a partnership with Samsung Bioepis since 2013 to develop some undisclosed biosimilars.
5. Like Merck, Biogen Idec also signed a deal with Samsung Bioepis to market biosimilars for rheumatoid arthritis and Crohn’s disease.

In addition to the chatter about those actively working on biosimilars, there have also been discussions about who might see more competition from the emerging U.S. biosimilars market. Perhaps another question to consider, which I plan to address in next week’s blog, is: What are those threatened by biosimilars going to do to protect their revenues and keep their portfolios innovative? Stay tuned!