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European Biopharmaceutical Review

Window of Opportunity

Many genericised small molecule pharmaceuticals are considered therapeutically equivalent, relative to their reference-listed drug. In these instances, both the reference product and its generic counterpart are bioequivalent and pharmaceutically equivalent. Generally, bioequivalent generic molecules can be substituted at the dispensing pharmacy level; in the US, therapeutically equivalent generic assets are given an AB rating by the FDA.

Large molecules – also known as biologic pharmaceuticals – are differentiated from small molecules, as no two large molecule assets are exactly the same. Given the impossibility of having two identical biologic drugs, therapeutically equivalent large molecules are called biosimilars.

Regulatory Policy

On the whole, many countries do not have official regulatory recommendations for large molecule interchangeability. However, in the US, an official interchangeability designation is allowed for large molecule therapeutically interchangeable biologics. These requirements are distinct from biosimilar guidance. It is postulated that methodical and rigorous clinical study will be required to confer the designation.

Furthermore, different biosimilar regulatory schema and rigours are applied by the EMA and FDA. However, despite distinct regulatory pathways for the approval of biosimilars, the overall scouting and development process remains highly similar across most regulated global markets.

Cost Savings

Currently, the biosimilar opportunity represents a core, future-orientated growth driver among traditional pharma players, as well as multinational ethical biopharma parties. Citing signifi cantly lower R&D costs, and an expedited clinical development timeline to potential marketability, biosimilar developers are keen to invest heavily in the biosimilarisation of blockbuster large molecule biologics. The cost savings can be substantial; the financial commitment to developing an originator large molecule is greater than $800 million, whereas a biosimilar development programme costs approximately $100-200 million.

Biosimilar developers and marketers argue that their respective assets offer comparable efficacy and safety to the reference-listed innovator biologic at a relatively reduced cost burden to patients, payers and the overall healthcare system. This value proposition is predicated on health/pharma economic considerations correlating with key regulatory wins and data extrapolation in select global biosimilar scenarios.

Player Competition

Pharma players have a relatively reduced cost of goods sold for their respective biosimilar assets, compared with innovater reference-listed biologics. As such, from a commercial and marketing standpoint, a signifi cantly competitive fi eld is emerging – both biosimilar versus biosimilar competition and biosimilar versus innovator competition. Developers must assert aggressive and potentially asymmetric marketing, contracting and manufacturing strategies, in addition to tactics and initiatives to win in this emerging space.

On top of this, innovator companies must be prepared to aggressively defend their respective proprietary large molecule biologics against impending biosimilars. Irrespective of whether it is a biosimilar or ethical biologic marketer, key success factors (KSFs) must be established to align positive outcomes in light of competing biosimilar entries. The approach to commercial success will vary depending on the product, country and channel sought, both from an offensive – biosimilar go-to-market – and defensive – ethical biopharmaceutical market defence – perspective.

On the Market

In the biosimilars space, there is a robust and increasing opportunity for highquality biopharma players to develop and enter newly charted waters. Between 2016 and 2018, some $37 billion worth of drugs will lose their intellectual property protection and these assets will be open to immediate biosimilarisation. Nonetheless, despite these massive potential revenue streams, it is postulated that biosimilars will not achieve a critical mass and market uptake until 2023-2025.

In March 2015, Sandoz, the generics and biosimilars arm of Novartis, received FDA regulatory approval for Zarxio, a biosimilar version of Amgen’s Neupogen. However, pursuant to legal proceedings and injunctions filed by Amgen, there was a six-month delay to Zarxio’s US market launch. Four additional regulatory applications have been filed with the FDA this year, indicating the critical pace and strategic importance of biosimilars to the market, as well as their respective developers and marketers.

Slow Steps

A number of factors, including the Zarxio legal precedent, may temper biosimilar market adoption and growth until a true understanding and prescriber buy-in is achieved. Specifically, market factors impacting and potentially limiting biosimilar adoption include:
  • Patient, physician and payer-level pause and concern regarding switching established biologics patients to biosimilars, with possible substituting and conversion issues
  • Global regulatory uncertainty regarding biosimilar interchangeability
  • Slow response from prescriber and payer-level early adopters for bio-naïve patients
  • Innovator biologics companies aggressively defending their intellectual property and large molecule biologic assets via strategic and tactical blocking and tackling of biosimilars
  • Biosimilar players needing to expand and upgrade their technical and manufacturing operations and facilities in order to sufficiently meet market demand and avoid early-stage product stockouts
In conclusion, the biosimilar opportunity is robust, growing and sustainable. However, given multiple market factors – including a lack of consumer and prosumer biosimilar knowledge, fierce competition and innovator companies’ desire to defend their proprietary biologic assets – biosimilar market uptake and adoption may be slow and irregular until a critical mass effect is achieved.

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David Alderman is President of Molekule Consulting, a global competitive intelligence-focused management consultancy. Recognised as a biopharma subject-matter expert with an in-depth understanding of biosimilars and generics, as well as multiple disease states, current and future market players, and developmental pipeline compounds, David provides actionable strategic advice to leaders in the sector. He has completed further education in Genetics and Molecular Biology and did his academic and research training at Columbia University College of Physicians and Surgeons, and Emory School of Medicine, US.
David Alderman
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