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.
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 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 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.
Figure 3: Causes for (orange) and obstacles to (blue) the uptake of biosimilars. (FIGURE COURTESY OF THE AUTHOR)
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.