Look Towards A New Future

Jan 31, 2012

Global Biosimilars: A return to optimism?

Examining the market for companies
The need for a settled market environment is essential if the growing numbers of biologic products losing patent protection in the next 5-10 years is to be exploited. However, progress is painfully slow and critical issues driving the market dynamic include:

Industry investment: a sign of confidence?
This report provides a detailed analysis of 50 companies active in the biosimilars field, many of which have declared their interest in 2011. The move may reflect a growing confidence that as regulatory provision for biosimilars increases, and as the pipeline of prospective products matures, then the prospect of actually being able to launch products grows more realistic.

The US continues to disappoint; Europe forges ahead
Despite President Obama's health reform bill being passed in 2010, very little has happened. And the FDA's cautious approach suggests little will happen in the immediate future. The much anticipated Guidance, expected in 2011 has failed to appear, and in May 2011 FDA published details for User Fees - a scheme that will not come into effect (assuming it is passed by Congress) until 2013. Given that an untried regulatory system will not operate at the fastest speed then prospects of a US market for advanced biosimilars seem remote before 2015. In contrast, European regulators are revising their widely-adopted regulations in the light of experience, with a view to issuing revisions and guidance in 2012.

Developing markets may offer a profitable alternative
Developing markets with rising disposable incomes may present the medium-term prospect for biosimilars, since they combine a large target population with reduced operating costs. Many countries are following the EU model of regulation. Markets such as India and China have plenty of home-grown production capacity. Some companies have sought to turn this capacity to their advantage, and have signed deals with Chinese/Indian producers for the development of products to be sold around the world.

Global Biosimilars Market

Published:January 2012
No. of Pages: 200

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The Challenge for Industry
The development of a biosimilar presents a series of challenges to traditional generic drug manufacturers seeking to enter the sector. To succeed, a company must have good financial backing. Small companies will be able to do the science, but the cost of product development and approval will generally exceed the resources of most chemical generic organisations. After this, there is the cost of marketing and post-market surveillance. There is little prospect in the EU and USA of biosimilars being sold unbranded and biosimilar developers will have to pay for the branding and the marketing of the products; a task for which many lack the funds, sales force and experience.

Corporate manoeuvring is seeing the competitive landscape change
Despite the challenges there has been an upsurge in company activity, most notably from the branded industry and from companies who have no current significant pharmaceutical interests. With the regulatory situation generally favourable to the branded industry, why are they interested?

There are three broad reasons why an originator would wish to become involved with biosimilars. Firstly, it would create a more diversified portfolio, an important consideration in an era of near-dry pipelines. Secondly, it would potentially allow for the development of expertise in the biologic area for companies which traditionally have limited involvement in biologics. Thirdly, it could potentially act as a "spoiler" operation by making the market environment more difficult for smaller biosimilar developers.