Will the Biosimilars Bubble Burst Even Before It Expands?

Allergan likely won’t do much with biosimilars beyond the company’s current involvement in projects involving 4 cancer-drug biosimilars developed in partnership with Amgen, according to Allergan CEO Brent Saunders. In an interview with Bloomberg on February 22, 2017, Saunders also predicted that many pharmaceutical companies will eventually retreat from the biosimilars business because the market will not be able to support the large number of molecules that will soon be approved.

Several biosimilars have been marketed or are in advanced stage clinical trials, including those for Rituxan, Herceptin, Avastin, Humira, Enbrel, Remicade, and Lantus. Amgen, Allergan, Boehringer Ingelheim GmbH, Pfizer Inc, AstraZeneca PLC, Merck & Co Inc, Biogen Inc, and Novartis AG have all made substantial investments or have partnerships for developing biosimilars. In addition to these companies, there are Chinese, Indian, and Korean competitors, including Samsung Biologics Co Ltd.

It is not easy to predict how quickly biosimilars will be adopted because the market for biosimilars is unsettled. One important factor is continuing patent litigation, which has prevented the marketing of several approved biosimilars. In the United States, for instance, only 2 of the 4 approved biosimilars have been marketed.

The other big concern is that none of the approved biosimilars has yet been deemed interchangeable with the reference product by the FDA, preventing the potential substitution of biosimilars for reference products without the approval of prescribers. States, meanwhile, are preparing for interchangeability—the senate in New Mexico has passed a bill that will allow pharmacists to substitute a physician-approved biosimilar for its reference drug. The bill now awaits a House vote.

The bigger drug developers, with their larger marketing and legal budgets, stand an advantage over the smaller ones in the legal process. Additionally, because the bigger companies will get to market first, late entrants may need a drastic price cut to compete. Such discounting is “great for society, but it’s bad for business,” said Saunders. He warned that the biosimilar business will end up looking very much like the standard generic drug business but with much higher legal, research and development, and manufacturing costs.