Are Biosimilars Potential Market Disruptors?

Jackie Syrop

Biosimilars may not yet be major players in the United States, but as more of these medications gain approval and begin to reach the market they are drawing attention for their potentially revolutionary effect on the development and commercialization of biologics. It’s impossible to predict the future, but analysts can look to the European Union (EU), where 22 biosimilars have already been approved and marketed for 10 years. Biosimilar competition in Europe has been credited with driving down prices of epoetins, human growth hormone, anti-Tumor Necrosis Factor (TNF) agents, and granulocyte colony stimulating factors (G-CSF), and increasing patient access to these drugs where it had previously been low.

In the United States, biosimilars are not going to be priced at the deep discounts seen with generics of small molecule medications, which can be 85% less expensive than the originator drugs. Because biosimilars are based on the large-molecule, highly complex biologics and are difficult to manufacture, biosimilars are also far more complex to develop and manufacture than small molecule generics, and thus more expensive to produce. Pfizer/Celltrion’s Inflectra biosimilar of Janssen’s Remicade (infliximab-dyyb) is priced at only a 15% discount to Remicade. But experts note that even small discounts and reductions can mean big savings. According to a 2016 report by IMS Institute for Healthcare Informatics, cumulative potential savings to health systems in the EU and the US as a result of using biosimilars could exceed EUR50 billion in aggregate over the next 5 years and reach as much as EUR100 billion.

In the EU, competition from biosimilars reduced prices across the whole class of drugs, not just the reference product, with reductions in costs of up to 60% in some countries.

As biologics lose patent protection in the US, biosimilars are becoming more interesting to companies with experience in biologics. Concerns about the high costs of biologics has also made biosimilars more compelling to biopharma. The FDA has approved just four biosimilars to date [Sandoz’s Zarxio (biosimilar to Amgen’s Neupogen) (filgrastim-sndz); Inflectra; Amgen’s Amjevita (biosimilar to AbbVie’s Humira) (adalimumab-atto); and Sandoz’s Erelzi (biosimilar to Amgen’s Enbrel (etanercept-szzs)], with only two of them (Zarxio and Inflectra) reaching the market so far. Three of these biosimilars were approved within the last year. (Eli Lilly’s Basaglar is considered a “follow-on biologic” of Sanofi’s insulin Lantus because it was approved through a different regulatory pathway than other biosimilars and became available in December 2016.)

The FDA is approving more biologics than ever, 11 to 12 per year in 2014 and 2015, representing 27% of all new approvals in 2015—up from 14% in 2004. IMS predicts that biologics will account for up to 28% by value of the global healthcare market by 2020, and biosimilar medicines therefore have an increasingly important role to play by competing with original biologics across a range of therapy areas. There are several companies focusing on biosimilars with many products in their pipelines, including biosimilars for Humira, Remicade, and Enbrel.

Yet obstacles to biosimilars in the United States remain an impediment to growth. Physicians are not familiar with biosimilars and there is not yet the necessary degree of acceptance of biosimilars among providers and patients. Finally, many biosimilars are locked in legal battles with reference product manufacturers that could keep some biosimilars off the market for years to come.