Market Outlook for Biosimilars - Pharmaceutical Technology

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Market Outlook for Biosimilars
The author reviews the major biopharmaceutical markets' activity and predicts how the markets may evolve.

Pharmaceutical Technology

US market set to dominate

The US market represents the greatest opportunity for the emerging biosimilars industry and is forecast to constitute nearly 90% (or $1.75 billion) of the biosimilars market in 2014 (1). The size of the US market and the generic erosion that characterizes it make it an attractive prospect for would-be biosimilars manufacturers. Success in this market, however, is contingent on the establishment of a biosimilars approval pathway. Datamonitor anticipates a pathway to be in place by 2010 and expects the first biosimilar to enter the US market in 2013.

In July 2009, an approval pathway came one step closer to reality when the House Energy and Commerce Committee overwhelmingly approved the America's Affordable Health Choices Act. This act would guarantee manufacturers of branded biologics an exclusivity period of 12 years. These terms are similar to those attached to a bill passed by the Senate's Health, Education, Labor, and Pensions (HELP) committee, on July 13 (4).

The historically low generic drug use in France, Italy, and Spain will contribute to slower and more limited biosimilar adoption in these markets, which are collectively forecast to constitute a maximum of 25% of biosimilar sales in the seven major markets in 2012. High brand loyalty and physicians' greater discretion in prescribing mean that marketing will be critical to promoting biosimilar uptake. Therefore, only the large and established companies with high brand recognition are anticipated to succeed in those markets.

Figure 2: Sales of biosimilars by country in the seven major markets during 2008–2019. US is United States. UK is United Kingdom. Sources: 2008 sales data are from MIDAS, IMS Health, March 2009; forecast for 2009–2019 is from Datamonitor. (FIGURE COURTESY OF THE AUTHOR)
Although guidance for biosimilar approval was issued in Japan in 2009, this market is unlikely to experience significant biosimilar sales. It is expected to contribute at most 2% to sales in the seven major markets in 2012. The slow acceptance of conventional small-molecule generics in Japan suggests that biosimilars will face an uphill struggle there. The key stakeholders' distrust of the quality and efficacy of generic drugs has hindered uptake to date (see Figure 2).

Figure 3: Causes for (orange) and obstacles to (blue) the uptake of biosimilars. (FIGURE COURTESY OF THE AUTHOR)
Although the growth of the biosimilars market has been slow, particularly in the US, global pharmaceutical trends, combined with increasing healthcare expenditures, have created momentum that could make the biosimilars market even more lucrative than the generics market. Figure 3 outlines some of the major reasons for and against the acceptance of biosimilars.

Market advantages

The high cost of biologics will spur payers to look to bio-similars for cost savings. Specialty drugs are often priced at a premium to recoup development costs from a limited market size, and the absence of generic-drug competition has given biologics manufacturers freedom to set prices as they see fit. Specialty biologics are among the most expensive medicines, ranging in price from $5000 to more than $300,000 per year. Annual consumer expenditure for specialty biologics has grown by 12–15%, which is double the rate of nonspecialty drugs in the US (3). The high price of branded biologics and the expectation that their use will overtake that of small-molecule drugs provide a significant reason for biosimilars adoption.

The number and use of biologics are expected to grow, thus expanding the potential biosimilars market. Specialty biologic drugs are used by 3% of the US population. This proportion will increase as more biologics are approved and the indications for those already on the market are expanded (3). Demographic trends are also increasing the use of biologics. As the global population ages, the incidence of complex and chronic diseases that require specialty biologic treatments grows accordingly. The number of approved or soon-to-be-approved biologics in the US has more than doubled every five years since 1990. More than 800 biologic drugs are in the pipeline, and the number of biologics on the market will continue to climb (3).

The need to contain rising healthcare costs is the primary motive for regulatory and legislative reform aimed at promoting the use of biosimilars. Datamonitor expects that biosimilars uptake will mirror that of generic drugs and occur more rapidly in the mature generic-drug markets (i.e., Germany, the UK, and the US) but face obstacles in France, Italy, Japan, and Spain.


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