Successfully developing and marketing a biosimilar presents a unique and contradictory challenge: Proving similarity whilst at the same time achieving differentiation!
In 2013, biologics represented more than $150 billion in global sales. It is predicted that by 2020 they will account for $290 billion in sales, approximately a third of the global pharmaceutical market.
11 biologics that face loss of patent protection over the next few years, account for just under a half of all pharmaceutical sales. This, along with the increasing worldwide focus on improving health care access and the cost of care, presents an attractive opportunity for biosimilars manufacturers. Some industry analysts expect the global biosimilars market will reach $25-$35 billion in sales by 2020. That said, biosimilar market entrants will encounter substantial barriers in their efforts to compete with originator biologics:
Regulatory and legal uncertainty
Regulatory uncertainty persists, with many of the major markets still lacking clear and consistent rules for developing and marketing biosimilars, including rules on interchangeability. The FDA approved Inflectra (infliximab-dyyb) on the 5th May, 2016 but this is only the second biosimilar they have approved. Other barriers to market entry involve legal factors, such as patents and trade secrets.
Corporate Reputation Branding/ Manufacturing complexity
The complexity of manufacturing biologics and biosimilars is a major barrier. Companies with experience in in manufacturing biologics, such as Amgen, Boehringer Ingelheim and Biogen Idec, will have a considerable advantage over those without. It is expected that many of the companies developing biosimilars will have to upgrade their development and marketing capabilities in key therapeutic areas.
Big pharma companies launching biosimilars believe that Corporate Reputation Branding will be important. No one yet knows how much of a differentiator this will be.
Another significant barrier is uncovered when recruiting patients for biosimilars clinical trials. Patients will often be reluctant to participate in a trial because they cannot guarantee that they would receive the biosimilar when they could be certain to receive the branded biologic outside of the clinical trial. For example, a patient with breast cancer is unlikely to participate in a trial in which the choice is Herceptin or a biosimilar, when they are uncertain whether it will or will not work.
Because there will likely be several companies attempting to develop the same biosimilar, it could be difficult to recruit enough volunteers because they are competing in the same volunteer pool at the same time.
Substitution and Interchangeability
The lack of clear and consistent guidelines on substitutability and interchangeability with reference biologics will most likely cause physicians to exercise additional caution in prescribing biosimilars until they gain comfort with the quality and efficacy of biosimilars. The NOR-SWITCH study currently underway in Norway may lead to the first data to support guidelines on this.
Biosimilars are largely anticipated to engage in “brand versus brand” competition with their reference therapies. With more sophisticated and long-term biologic treatments (e.g., monoclonal antibodies and growth hormones) and the associated treatment chronicity, it could take longer to demonstrate and convince stakeholders of the benefits of switching. Payers and policy makers will be cautious about requiring or encouraging patients to be switched to lower-priced biosimilars. Building up physician acceptance of biosimilars will take some time.
There are many questions that companies planning on developing and launching a biosimilar product need to answer to improve their probability of success. Many companies are investing heavily on identifying the factors that could drive a strong and credible corporate brand, believing that this will be the main driver of sales. Perhaps the thinking is that establishing the baseline will help with planning a route forward. Given that nearly all of the biosimilar entrants are doing the same thing, could the budget assigned to this exercise be better used to develop strategies and tactics to differentiate themselves in the market and to execute them well?
We believe that It is also critical for biosimilar manufacturers to identify potential patient access and reimbursement challenges and to develop a range of prototype (strategic and tactical) solution options to pre-emptively address these challenges. Gathering behavioural payer, HCP and patient insights will shed light on impending access or reimbursement issues and allow the development of differentiating solutions.
In the next article, we will discuss how best to get closer to what really will drive stakeholder (payers, HCPs and patients) choice and behaviour (and ultimately sales), as well as how to establish longer-term differentiation through developing tailored solutions.
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