Managing Risk Can Ensure Biosimilar Rewards, Expert Says

Article

Despite the challenges inherent in biosimilars, they have a fairly high probability of success, said Edric Engert, managing director of Abraxeolus Consulting, in a presentation at the 14th Biosimilars Summit, held January 22-23, 2019, in Alexandria, Virginia.

Despite the challenges inherent in biosimilars, they have a fairly high probability of success, said Edric Engert, managing director of Abraxeolus Consulting, in a presentation at the 14th Biosimilars Summit, held January 22-23, 2019, in Alexandria, Virginia.

According to Engert, people continue to see biosimilars as a particularly risky endeavor largely because of the difficulty of developing these products, challenges related to pricing and uptake, the number of potential competitors, and innovator defenses, among other factors.

Despite challenges, said Engert, it is possible to manage risks in order to capture rewards. He provided a hypothetical example of a biosimilar developer that was able to develop a product (for which the reference product has $4 billion in sales) in 7 years and launch it in 10 years.

Assuming 4 biosimilar competitors, and 80% eventual biosimilar penetration, a developer could start with a 35% discount to the reference product and continue to drop that price by 8% each year while also investing $13 million in marketing and hiring a sales force of representatives, and they company will have a net present value of $480 million for the product. Even assuming the hypothetical product’s launch was delayed by as much as 4 years, he said, the net present value would still be $265 million.

Some basic steps can bring discipline to risk identification to reap those rewards, said Engert. First, developers should pick their highest priorities to focus on first: “You can’t do everything at once.” Once the key issues have been identified, “it’s all about identifying the downstream implications.”

For challenges like intellectual property issues, for example, a developer might need to forge an internal legal team, join a trade association, or engage in contingency planning. If commercialization issues are the concern, the company might choose to engage with HHS, deepen its policy and government affairs understanding, and seek to truly understand the complexity of its portfolio choices.

Next, it’s important for developers to understand how operations will be affected, then enter into detailed planning and refine those plans through honestly assessing internal challenges. “We’re so focused on the risks that we’re facing as an industry…it’s very easy sometimes to neglect the things we’re facing within ourselves.”

For example, in assessing a portfolio, it’s useful to remember that, currently, oncology is number 1 in terms of the number of projects in the innovator pipeline; thus, oncology is also where future losses of patent exclusivity will occur. Developers need to make a strategic decision on how big a role oncology will play in their portfolios, and that involves understanding the buy-and-bill landscape for oncology centers and investigating all available settings for oncology products.

In considering marketing their drugs, biosimilar developers will have to plan to engage in activities that resemble a branded launch. They will need to consider their core message development, engage healthcare provider advisory boards, and engage in public relations, among other activities. Market access undertakings will involve assessing CMS reimbursement, creating a net pricing model, and contracting with group purchasing organizations. Distribution will require early planning and refinement of approach.

Through early planning in these areas, concluded Engert, developers can achieve substantial rewards from biosimilars. “Yes there are lots of risks. And we should be talking about the risks,” he said. “But don’t lose sight of the ball here. There is a significant return.”

Related Videos
Prerakkumar Parikh, PharmD
GBW 2023 webinar
Julie Reed
Julie Reed, MS
Julie Reed, executive director of the Biosimilars Forum
Fran Gregory, PharmD, vice president of emerging therapies, Cardinal Health
Fran Gregory, PharmD, vice president of emerging therapies at Cardinal Health
Here are the top 5 biosimilar articles for the week of May 1, 2023.
Christine Baeder
Michael Kleinrock
Related Content
© 2024 MJH Life Sciences

All rights reserved.