The leading generic drug manufacturer launched Truxima, a biosimilar for rituximab, in November 2019 at a 10% discount to the reference product, Rituxan.
The rebating landscape is among the factors that have made it tough for biosimilars to penetrate the US marketplace, but the launch of its biosimilar rituximab, Truxima, shows that Teva Pharmaceuticals has learned to navigate the system, the company’s chief executive officer said during his presentation at the 38th annual J.P. Morgan Healthcare Conference Monday.
Kåre Schultz took the audience through a review of Teva’s restructuring over the past 2 years, which called for dumping $3 billion in spending, trimming 12,000 employees, and selling or closing 13 manufacturing sites to address the company’s debt load. With the bad news out of the way, Schultz said, things are looking up for the leader in generic drug manufacturing.
For Teva, it’s “very interesting that we are now getting more into the biosimilar space,” he said.
Biosimilars have made less of an impact than they have in Europe “most likely due to the lack of understanding of the whole commercial setup, and what it takes to penetrate the US marketplace due to the complexity of rebating and contracting and so on,” Schultz said. An analysis published in the last week found that the legal barriers to market entry have hurt biosimilars uptake in the United States, compared with Europe.
Teva, Schultz said, has the volume and the contacts to overcome these challenges, as evidenced by the Truxima launch, which came in November 2019 at a 10% discount to Rituxan, the reference drug.
“I said at the previous third quarter announcement that we were aiming for double-digit share in this marketplace and sustainable profitability,” Schultz said. “We are not trying to take away everything, but we wanted the fair share of the market at a reasonable profitability, and I think that's exactly what we're going to prove with Truxima and future biosimilar launches.”
In recent years, official FDA policies have encouraged growth in the biosimilars market, but Schultz offered a different take. “There's a strong future, the way I see, it for both traditional generics and biosimilars in the US marketplace,” he said. “The pricing has now stabilized this debt spiral to the bottom, which got ignited by FDA approving more [abbreviated new drug applications] and by Indian and Chinese players getting into the marketplace; that has all stabilized. So, now we have a stable supply-demand situation working to the benefit of patients and the manufacturers.”
During the question-and-answer period, he elaborated on the dynamics of a biosimilars launch. “We see a stabilization of the margins in US generics, and we see biosimilars having, you could say, a slightly higher margin,” he said. “If you launch first with a chemical compound, you have a very good margin in the beginning and then it slows down pretty fast if you get a lot of competition.
“On biosimilars, you typically get less competition, your launch margin is probably little less than you could have on a traditional generic, but it stays longer because the pricing is much more stable due to less competition in that field and the fact that the barriers of entry to biosimilars are a lot higher.”
“Looking sort of into the future, we think that the basic supply and demand in US generics and biosimilars are favorable and are stable. That doesn't mean that we'll see a dramatic increase in margins, but we do believe that the plans we have for our whole manufacturing footprint will result in some improvements on the gross margin,” he said, adding that there will be more specifics during the company’s investor call on February 12, 2020.
Schultz chided media coverage of the pharmaceutical industry’s high prices and “taking advantages” of patients, saying that “the hard facts of the generic industry in the US is that it's actually the opposite that's taking place. The annual saving from generics and biosimilars in the US is around $300 billion. Teva alone supplies products with an annual saving of around $43 billion.”
“So,” he said, “the idea that generics are not sort of helping make pharmaceuticals and medicines affordable is basically flawed and not correct.”
Unmentioned was the lawsuit that 44 state attorneys general filed against Teva in May, which accused the drug maker of pricing fixing. Teva has denied the states’ allegations. Humana filed its own price-fixing claims in October.
Teva and Celltrion have also developed a biosimilar for trastuzumab, Herzuma. The companies settled litigation in July 2019 with Genentech, maker of the reference product, Herceptin. No US launch date for Herzuma has been disclosed.
The Trump Administration’s Drug Price Actions and Why US Prices Are Already Sky-High
May 17th 2025While the Trump administration’s latest executive order touts sweeping drug price cuts through international benchmarking, the broader pharmaceutical pricing crisis in the US reveals a far more complex web of development costs, profit incentives, and absent price controls—raising the question of whether any single policy, including potential drug tariffs, can truly untangle it.
Escaping the Void: All Things Biosimilars With Craig & G
May 4th 2025To close out the Festival of Biologics, Craig Burton and Giuseppe Randazzo from the Association for Accessible Medicines and the Biosimilars Council tackle the current biosimilar landscape and how the industry can emerge from the "biosimilar void."
How AI Can Help Address Cost-Related Nonadherence to Biologic, Biosimilar Treatment
March 9th 2025Despite saving billions, biosimilars still account for only a small share of the biologics market—what's standing in the way of broader adoption and how can artificial intelligence (AI) help change that?
Samsung Bioepis Report Signals Turning Point for US Biosimilars
May 1st 2025A wave of biosimilar approvals, aggressive pricing strategies, and a regulatory sea change are setting the stage for unprecedented momentum in the US biologics market, with 2025 already proving to be a landmark year in reshaping cost, access, and innovation across therapeutic areas.
Biosimilar Market Development Requires Strategic Flexibility and Global Partnerships
April 29th 2025Thriving in the evolving biosimilar market demands bold collaboration, early global partnerships, and a fresh approach to development strategies to overcome uncertainty and drive future success.