S&P Report Details Biosimilar Impact for Pharma Firms in Coming Years

Growing awareness of biosimilars, patent expirations, and demands to lower healthcare costs are combining to increase uptake over the next 3 to 5 years, according to a recent S&P Global Ratings report. Some pharamceutical firms stand to gain, while others are more exposed. 
Skylar Jeremias
March 05, 2020
Although several pharmaceutical companies are expected to see downward pressure with the rise in biosimilar adoption, more are expected to profit, including Novartis, Pfizer, Biogen, Mylan, Merck, and Amgen, according to a S&P Global Ratings Report released this week.

However, the report notes that 4 factors could influence uptake:
  • Successful demonstration of interchangeability at the pharmacy level
  • The outcome of Pfizer's lawsuit alleging Johnson & Johnson (J&J) of anticompetitive behavior
  • Greater transparency of pharmacy benefit managers and rebates
  • Legislative efforts to reform patent issues, pay-for-delay arrangements, as well as regulatory action. 

Many biologic drug patents are projected to expire in the next 3 to 5 years, possibly allowing revenues for biosimilars to triple, the report said. Companies like AbbVie, Roche, Novo Nordisk, J&J are among the biologic makers with the most to lose due to competition with their originator products, while Amgen is in the unique position of both making and losing money as biosimilar uptake rises.

Amgen has $10 billion of biologic revenue at risk due to approaching patent expirations, but it has also created a strong biosimilar pipeline, with 4 biosimilars expected to make over $250 million in worldwide sales each by 2024, according to the report.

AbbVie, the maker of reference adalimumab (Humira), is set to have 57% of its net revenues up for competition starting in 2023, which is the earliest that biosimilar competitors from Novartis, Pfizer, Samsung Bioepsis, Boehringer Ingelheim, and Amgen can begin launching their biosimilars. Biogen and Mylan are in the process of getting their adalimumab biosimilars approved.

Pfizer currently has 6 biosimilars on the market, 3 of which entered the market in the past 3 months. “If it finds success pricing its new biosimilars at 20%-25% below their reference drugs as it has announced, the company could exceed $2.5 billion of revenue in 2024 and surpass the total U.S. biosimilar revenue from 2019,” analysts predicted.

J&J has 2 biologics facing biosimilar competitors, with 2 more set to go off patent in the next few years. The company is also facing 2 lawsuits over its reerence infliximab; in addition to the suit from Pfizer, Walgreen’s and Kroger have also sued.

Merck recently announced a spin-off company to hold its biosimilar products as well as older brands. The change, coming in 2021, will enable Merck to achieve an excess of $1.5 billion in operating efficiencies by 2024.

Roche has 3 biologics facing competition, with 3 more likely to face competition within 2 or 3 years. These 6 drugs will put 52% of Roche’s 2019 pharmaceutical revenues in jeopardy.

Similarly, Novo Nordisk has 2 biologics facing competition with upcoming patent expirations for another in 2023. The 3 account for nearly 60% of Novo Nordisk’s US market revenue.

Novartis is the current global leader in biosimilars with sales approaching $1.6 billion in 2019. Mylan accumulated nearly $400 million in 2019 biosimilar sales and presented a strong biosimilar portfolio and pipeline.

Biogen’s biosimilars have performed well due to commercialization agreements and a 49% stake in Samsung Bioepis, another company expected to profit from biosimilar expansion.

Other companies expected to grow as biosimilar uptake becomes more available are Teva, Alvotech, Coherus, and Celltrion.

In addition to patent expirations, a new provision for the Biologics Price Competition and Innovation Act (BPCIA) of 2009 goes into effect on March 23; under the new rule, an application for a biological product approved under the Federal Food, Drug, and Cosmetic Act (FD&C Act), including applications for insulins and other biological products, will be deemed to be a license for the product under the PHS Act.

Insulin biosimilars approved under the PHS Act will be able to seek interchangeable designations for the first time, and interchangeable insulins will be, pursuant to state laws, eligible for substitution at the pharmacy level.

The FDA indicated that substitutions of insulin at the pharmacy may be permitted without proof of interchangeability, a standard only necessary for the US market. Although no current FDA approved biosimilars are deemed interchangeable, the BPCIA will provide exclusivity protections to the first approved interchangeable biosimilar.

 

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