• Bone Health
  • Immunology
  • Hematology
  • Respiratory
  • Dermatology
  • Diabetes
  • Gastroenterology
  • Neurology
  • Oncology
  • Ophthalmology
  • Rare Disease
  • Rheumatology

Understanding the Risks, Opportunities, and Prospects of Biosimilars in 2020 and Beyond

Article

Hurdles to a vibrant biosimilar market are not as insurmountable as they appear.

Entering 2020, we have the opportunity to take a moment, look back, and reflect on the lessons learned of the previous decade with regard to biosimilars. The road to a successful biosimilars market has been anything but straightforward. With complications including a slow rate of approval, extended delays in product launches due to patent litigation, or the small and incremental degree of economic impact, it’s easy to become frustrated and question whether or not biosimilars represent an economically prudent investment in the new decade.

While I would not argue with anyone that we should expect more from the biosimilars opportunity, simply throwing the baby out with the bathwater at this point would be a monumental mistake that fails to see the growing opportunity the space provides us. Essentially, these hurdles are not as insurmountable as they appear and can be managed if we focus our approach at the appropriate obstacles and recognize the benefits to continued biosimilar development beyond simply the primary goal of lowering the price of biologic drugs.

The Elephant in the Room: What is a Fair Price?

While the question of pricing is critically important, we must also acknowledge the other structural and economic realities of drug prices. One prominently articulated alternative to biosimilars is the implementation of pricing regulation for biologics after they reach the end of their exclusivity period. This approach would attempt to establish a “fair price” at which an originator biologic will be sold that is intended to include all of the expenses associated with biologic development and the ongoing supply of that product. However, there are several issues with this concept that should be addressed:

  1. Given the current political landscape, it appears rather remote that agreement on a price setting process for biologics or any other pharmaceuticals could be established within the near future.
  2. The creation of this “fair price” would require a degree of transparency from the pharmaceutical industry far beyond anything that presently exists. Currently, there are little if any details concerning the true cost of drug development, high quality manufacturing, and consistent supply.
  3. The most challenging aspect of this endeavor would be establishing an agreed upon definition of a “fair price.” Given the number of stakeholders involved in and impacted by the pricing of pharmaceuticals, it appears highly unlikely that these participants would agree to a threshold for profit generation.

Realigning our Understanding of Biologics, Generics, and the Concept of Cost

Much of the recent frustration with biosimilars stems from our previous experience with generics. Over the last 35 years, generics have demonstrated that competition can drive dramatic savings with the value being recognized almost immediately. The simplicity of the molecules and the well-established mechanism of declaring products interchangeable, creates a clear pathway for competition. However, the US healthcare market is now closing in on the second decade of a drug shortage crisis that has primarily centered on the persistent and extended interruptions in the supply of hundreds of generic medications.

As a result, we must re-examine our traditional perspective that it is always easy to create generic drugs and always hard to create biosimilars. We have learned that all pharmaceuticals require a great degree of due diligence and commitment to quality. Perhaps the modest barriers to generic entry have been too low to ensure a long-term and consistent availability of high-quality small molecule drugs. Rather than stopping biosimilar development, we should use this ongoing experience to improve our understanding of safe, effective, and sustainable manufacturing for all medications.

A Holistic Approach to Enter the New Year

We are still early in the biosimilars experience and are continuing to make strides in addressing many of the challenges that have slowed and diluted the extent of financial impact. Even with these challenges, the future of biosimilars looks exceedingly bright. According to a report by Global Market Insights, by 2025 the global biosimilars industry is poised to surpass a valuation of $69 billion. However, that will be merely a dream if we are unable to address those hurdles. So what are our next steps?

  • Education—Physicians and other clinicians need to understand the concepts of risk management to avoid unnecessary apprehension. If clinicians become more comfortable with the analytical characterization methods to monitor changes in biologics, we move closer to a day when redundant clinical studies are no longer required.
  • High-quality manufacturing—The manufacturing of biosimilars must be monitored closely to avoid any negative impact on product quality. An increased degree of scrutiny of small molecule drugs, including generics, is also important.
  • Advocacy—We must continue to leverage our advocacy capabilities to remove additional barriers such as the use of excessive patenting to delay the introduction of competition.
  • Reimbursement—Long-term resolution to our challenge of lowering the cost of medications must at some point address the way in which providers are reimbursed. As long as physicians and other providers are reimbursed in a way that higher acquisition costs lead to larger reimbursement opportunities, acceptance of competing products, biosimilars or other, will continue to be limited.

Related Videos
GBW 2023 webinar
Fran Gregory, PharmD, vice president of emerging therapies, Cardinal Health
Here are the top 5 biosimilar articles for the week of May 1, 2023.
Christine Baeder
Here are the top 5 biosimilar articles for the week of February 13th, 2023.
Michael Kleinrock
Ian Henshaw
Ian Henshaw
John Gabrielson
Ryan Haumschild, PharmD
Related Content
© 2024 MJH Life Sciences

All rights reserved.