Market obstacles

Providing sufficient demonstration of biosimilarity to alleviate fears and promote acceptance remains one of the major issues facing biosimilars manufacturers. Demonstration of biosimilarity will increase physicians' willingness to prescribe biosimilars and reduce patients' resistance to these products. In principle, biosimilarity should be relatively easy to prove for the simple and well-characterized biologics such as insulin, epoetin, and human growth hormone. The larger and more complex biologics such as monoclonal antibodies (mAbs), however, present a challenge. These biologics tend to be the most lucrative and attractive prospects for biosimilar manufacturers, who must establish sophisticated development processes to realize their potential.

Rebates and service agreements between branded manufacturers and healthcare providers or insurers are likely to be a considerable deterrent to the adoption of biosimilars. Biosimilars manufacturers must either offer better incentives than the branded companies do or offset them through competitive pricing. Datamonitor anticipates that branded companies will defend their market share aggressively against biosimilars, probably through competitive pricing. Biosimilar manufacturers must therefore contend with the frequently longstanding relationships between branded companies, healthcare providers, and patients, and find a way to mitigate them. The strategy may be straightforward for biosimilar manufacturers that are affiliated with branded companies. But the traditional generic-drug company that is not accustomed to the marketing and promotion that will almost certainly be required in the emerging biosimilars market faces a substantial challenge. Moreover, these companies may lack the logistical and financial power to offer the same level of service and support that branded companies routinely offer. In an environment such as this, a collaboration that unites the technical know-how of small companies with the marketing prowess of larger companies will be critical.

As the first region to introduce guidelines for the approval of biosimilars, Europe has emerged as the testing ground for these products. In 2008, the European Medicines Agency (EMEA) said that a biosimilar approved through the pathway is as safe and effective as any other EMEA-approved drug (5). Not surprisingly, all of the biosimilars were first launched in Germany, the largest generic-drug market in Europe. Although a European regulatory pathway now exists, general acceptance and a path to market—in terms of pricing, pricing, reimbursement, and distribution systems—remain to be established (6). Creating demand among the key stakeholders is critical and requires information that counters branded companies' promotional efforts.

Lessons learned from Europe's hospital and retail markets should also be considered. Biologics in Europe tend to be dispensed in hospitals, although there is considerable regional variation for molecules such as epoetin and filgrastim. In a hospital, pharmacy managers and payers are likely to influence physicians' prescribing behavior, making this setting an attractive one for biosimilars manufacturers. Moreover, anecdotal evidence suggests that patients are often unwilling to switch drugs after leaving the hospital (1).

But drug acquisition through the tender process may make it difficult for biosimilars manufacturers—who may be less familiar with the process or lack the established relationships—to sell to hospitals. Acquisition in the retail sector, while more fragmented, is far more transparent, and competition based on price is a real possibility. This conclusion is partly borne out by biosimilar epoetin alpha sales in 2008 in Germany, where uptake was almost eight times faster in the retail sector than in hospitals (2).

Lessons from Japan

Although Japan is the second market to establish an approval pathway for biosimilars, the products are not expected to enter the Japanese market until 2012 at the earliest. Biosimilars in Japan will be subject to the same approval process as branded drugs, with the concomitant delays to which branded manufacturers have grown accustomed. The median approval time for new drugs in Japan was 34.3 months in 2007 (7). Therefore, Datamonitor assumes that biosimilar approvals in Japan will take at least three years. Only one biosimilar, epoetin, is known to have been submitted for approval, and market entry is likely to occur significantly later than in the other markets.