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Bracing for Biosimilars
Kuyler Doyle, Principal Consultant, Campbell Alliance
Tony Lanzone, Vice President, Managed Markets Practice
Fahti Khosrow-Shahi, Senior Vice President, Brand Management Practice
Introduction
Could generics finally be coming to the biotechnology sector? Amendments proposing pathways
for regulatory approval of follow-on-biologics have
passed committees in both the House of Representatives and Senate and are currently up for consideration as part of healthcare reform legislation.
However, complexities related to the production of
biologics will make the approval and commercialization of follow-on biologics a very different process
than that used with small molecule generics.
A handful of follow-on biologics are already offered
in European and American markets, but have yet to
cause significant brand erosion. Despite ongoing regulatory and commercial uncertainties, Big
Pharma and small molecule generics companies
have been making strategic moves to enter into the
biosimilar arena.
This article will examine the current movement
toward an abbreviated approval pathway for followon biologics in the US and will assess the potential
impact on current biotechnology products. In addition, the article will provide some insight into what
commercial and reimbursement decision makers
for biotechnology companies should be doing to
prepare for the arrival of biosimilars.
Biosimilars vs. Small Molecule
Generics
Many of the world’s largest pharmaceutical companies got their start as chemical companies, utilizing
advances in the separation and synthesis of chemicals to create products for medicinal purposes.
Modern day production of small molecule drugs
occurs through a chemical process that allows the
compound to be manufactured relatively inexpensively in large-scale batches while remaining pure.
Since small molecule drugs are manufactured
through a chemical process and can be structurally
replicated, they lend themselves to be made into generic drugs by other companies after patent expiry.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Hatch-Waxman Act) established
a process to allow generic drug manufacturers to
pursue an abbreviated New Drug Application (ANDA)
process, while providing market exclusivity incentives for innovator pharmaceutical companies to
continue research and development in pursuit of
new therapeutics. The Federal Food, Drug, and Cosmetic Act (FDCA) was amended to allow regulatory
approval of generics in the absence of clinical trials
if the company can demonstrate a conserved chemical structure and bioequivalence, typically through
small bioavailability studies (section 505(j)).
With modern DNA technology, the drug industry has
seen a shift from the classical small molecule drug
toward an increased use of the biologic. Biologics can be hundreds of times the size of small
molecules and of increased complexity. These
products, frequently proteins, are produced via
living cells and must be purified in a process that
is more costly than that used for small molecules.
Cells used to produce the protein can be mammalian in origin or from bacteria, yeast, plant, or even
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insect cells. As synthesis occurs through a biologic
process and requires separation of the active drug
from crude cellular material, the end product is
never completely pure and there can be variation
between productions. Protein products are also
typically more susceptible to degradation than small
molecules, which can lead to further variations.
Through naturally occurring processes inside the cell,
proteins are frequently modified after production,
including the addition of sugars through “glycosylation.” The choice of cells for use in manufacturing
of the biologic can have major effects on if and where
sugars are added to the protein. Not only do changes
in cells affect the sugars, but even subtle changes to
growth conditions in a conserved expression system
can influence glycosylation patterns. Glycosylation
modifications to a biologic drug hold the potential to
impact the efficacy and safety of the drug. Differences in sugar placement on a protein can alter how
a protein folds, what it binds, stability, biological activity, pharmacokinetics, and whether it is recognized
as foreign by the immune system.
Bracing for Biosimilars
Changes to manufacturing processes inherently
create changes in the structures of the more complex biologic drugs. Biotechnology companies must
conduct testing when they alter their production capacity or process, and the FDA takes this seriously.
The FDA’s scrutiny is well exemplified in the recent
saga of Genzyme’s Myozyme®. Following efforts to
scale up batches of the drug with a larger bioreactor,
the FDA noted differences in product glycosylation
and required Genzyme to submit a new BLA for the
product under a different brand name (now Lumizyme), delaying market entry. This demonstrates
how closely a biologic product can be linked to the
process of producing it.
Antibody therapeutics add further difficulty to the
biosimilar issue since they are highly glycosylated
and structurally complex, with multiple features
that impact clinical outcomes. Although a biosimilar
antibody would need to remain the same at the basic sequence level, differences in production might
lead to process-related impurities or glycosylation
alterations that could vary the structure and alter
clinical safety and efficacy. Because of the uncertainties surrounding what analyses are necessary
to convincingly demonstrate biosimilarity and what
differences might be allowable, the EMEA is still
developing specific guidelines for approving antibody therapies. Meanwhile, Dr. Reddy’s Laboratories
already markets Reditux™ in India as a biosimilar replacement therapy for Roche’s MabThera® (Rituxan®
in US from Genentech/Biogen Idec).
Although small and relatively simple proteins may
be easier to replicate than larger ones, differences in
production platform, conditions, and equipment can
all lead to variations in product. Therefore, follow-on
biologics will rarely be identical to the innovator
product. This is why these drugs have been given
the moniker of biosimilar and many avoid the “biogeneric” designation altogether. Follow-on biologics
can be considered “analogous” to small molecule
generics, but are difficult to prove as exactly the
same as originator product. As such, the regulatory
authorization of follow-on biologics cannot follow
the precedent set by small molecule generics.
Complexities of a Follow-on
Biologic Regulatory Pathway
A drug manufacturer can currently seek market
approval for a follow-on biologic through existing regulatory channels after patent expiration,
although there is currently no abbreviated pathway
established in the US that parallels that of small
molecules. Earlier this year, several bipartisan bills
went before Congress in an attempt to put one in
place, including the “Promoting Innovation and
Access to Life Saving Medicine Act” (H.R. 1427, Waxman-Pallone-Deal-Emerson) in front of the House
of Representatives (with a Senate companion bill
S. 726 sponsored by Schumer, Collins, Brown, and
Table 1 – Comparative Look at Select Key Components of Biosimilars Legislation Proposed in Healthcare Reform
Select Key
Component
Affordable Health Care for
Americans Act (H.R. 3962)
EMEA Biosimilar
Guidelines
FDCA Section 505
(from Hatch-Waxman Act)
2 years data exclusivity for new
1
biologic
6 month extension possible with
pediatric indication
0 years for new biologic (8 years
1
data exclusivity, 2 year market
exclusivity)
1 year extension for new indication
years data exclusivity for new
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chemical entity
6 month extension possible for
pediatric indication
FDA determines
E MEA cannot guarantee biosimilar
is interchangeable
Substitution is determined on a
national basis
Interchangeable
F ollow-on biologic receives distinct
name
P otential to retain nonproprietary name
Based upon molecular characteristics
and determined by World Health
Organization (WHO)
eneric retains nonproprietary
G
name of originator product
Clinical Trials
eeded unless FDA deems not
N
necessary
E fficacy and safety comparability
study against originator required
ot required – bioequivalence data
N
sufficient
Immunogenicity Testing
eeded unless FDA deems not
N
necessary
Needed for each indication
Not required
Exclusivity
Interchangeability
Nonproprietary Name
2
Table 2 – EMEA-Approved Biosimilars
Product Class
Originator Product
Human Growth Hormone
(HGH / Somatotropin)
Erythropoietin
(EPO / Epoetin)
Granulocyte ColonyStimulating Factor
(G-CSF / filgrastim)
Insulin
Martinez), and the “Pathway for Biosimilars Act”
(H.R. 1548, Eshoo-Inslee-Barton). Disparities in
the bills demonstrated disagreements on some key
components.
One primary difference between the bills was the
amount of data exclusivity time given to an innovator company that markets a new biologic drug.
Data exclusivity prohibits the use of the innovator’s
completed safety and efficacy studies from being
used to reduce the number of trials needed for an
abbreviated biosimilar application. As data exclusivity has the potential to outlast patent protection
and ensures a baseline time period to recoup its
investment before biosimilar competition, this is an
area of key interest to biotechnology companies.
The Waxman bill proposed five years of base data exclusivity for a new biologic, with possible six-month
extensions for pediatric or additional indications.
The Eshoo bill provided a base of 12 years of data
exclusivity for a new biologic, and two more years
for an additional indication and a potential to extend
six months with a pediatric indication.
Biotechnology companies and the Biotechnology
Industry Organization (BIO) feel strongly that longer
Company: Product
Pfizer Genotropin
Nonproprietary Name
Sandoz: Omnitrope
somatropin
Biopartners: Valtropin
Lily Humatrope
S andoz: Binocrit
Medice Arzneimittel Pütter: Abseamed
Sandoz: Epoetin alfa HEXAL
epoetin alfa
ospira Enterprises: Retacrit
H
Stada Arzneimittel AG: Silapo
epoetin zeta
J&J Eprex
Amgen Neupogen
atiopharm GmbH: Ratiograstim,
R
Filgrastim ratiopharm
CT Arzneimittel GmbH: Biograstim
Teva Generics GmbH: Tevagrastim
Sandoz: Zarzio
filgrastim
Lily Humulin Products
None on market: three applications
withdrawn from Marvel LifeSciences
human insulin
exclusivity times are critical to cover the high costs
of development failures and to keep the innovative
process churning. Conversely, the Federal Trade
Commission issued a report in which they found no
need for twelve- to fourteen-year market exclusivities, citing that patent protection, market-based
pricing, and likely slow brand erosion in the follow-on biologic market should suffice in recouping
investments for development and commercialization of new products. The Obama administration
provided their opinion that seven years would be a
fair compromise.
Drug interchangeability is another pressing issue
with regard to follow-on biologics. Both proposed
bills allowed the FDA to determine if the biosimilar
is interchangeable with the branded product. This
point will help determine whether a pharmacy will
be able to switch to the biosimilar without consent
of the physician or patient, which could impact
branded sales. Contributing to this debate, the
Waxman bill allowed the biosimilar to maintain the
nonproprietary pharmaceutical nomenclature while
the Eshoo bills called for all follow-on biologics to
have a distinct name due to inherent differences.
The Eshoo bill sought to identify and distinguish the
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biosimilar from the branded product, in addition to
any future follow-on biologics of the same classification. Use of a different nonproprietary name could
complicate the ability for the pharmacy to easily
interchange products without patient consent.
Another point of contention was in regards to the
hurdles needed to demonstrate biosimilarity. The
Waxman bill provided the FDA with the authority to
determine whether there is a need for clinical studies to test a biosimilar, while the Eshoo bill required
clinical trials but allows the FDA to waive them if
deemed unnecessary. In addition, the Eshoo bill
required immunogenicity testing to ensure that any
differences in glycosylation do not cause an immune response that could be harmful to the patient.
Groups like BIO claim that stringent testing would
help ensure the safety of the patients, while generic
advocates claim these are merely stall tactics to
keep a biosimilar off the market.
Safety concerns for changes to biologics are not unfounded. Slight variations in formulation to Johnson
& Johnson’s recombinant erythropoietin (EPO) drug
Eprex® in 1998 led a small percent of chronic kidney
disease patients to lose their immunological toler-
Bracing for Biosimilars
Table 3 – Recent Pharmaceutical and Generic Company Acquisitions
of Technology Platforms and Products for Biologics
Pharma Company
Acquisition / Partner
Platform / Product
Engineered yeast strains that can enhance production of therapeutically active
biologics through control of protein glycosylation
Glycofi
Merck
Abmaxis
Discovery of antibodies for therapeutics and diagnostics
Insmed
Follow-on biologic pipeline and manufacturing facility
Albumin technology that allows biologics to remain longer in body, requiring fewer
injections and maintaining a steady dose
CoGenesys
Sicor
Injectable generics technology
Teva
Chinese company specializing in R&D and manufacturing of biologics
Tianjin Hualida
Joint venture to develop, manufacture, and market biosimilars
Lonza
MedImmune
Biologic pipeline
AstraZeneca
GSK
Pfizer
Cambridge
Antibody therapeutics
Domantis
Antibody therapeutics
Wyeth
Biologic and vaccine product portfolio and pipeline
Biologics manufacturing plant
Biotechnology drug discovery and optimization technology (from Haptogen)
Rinat
Biologic pipeline for neurologic disorders
Technology platform for developing longer acting biologics and a diabetes drug
pipeline
Biorexis
Bristol-Myers Squibb
ance, resulting in antibodies against EPO. Antibody
production neutralized the effects of the drug and the
patients’ own EPO, leading to the development of pure
red cell aplasia (PRCA), a condition characterized
by resistance to therapy and absence of red blood
cell precursors in the bone marrow leading to severe
anemia. This example highlights how small changes
to biologics could impact both safety and efficacy.
As healthcare reform discussion proceeded in committee hearings, greater support for the amendments swayed towards the 12 year exclusivity. An
amendment with language largely taken from a
previous bill sponsored by Ted Kennedy passed
Adnexus Therapeutics
New platform technology for targeted biologics and a cancer drug
the Senate Health, Education, Labor and Pensions
(HELP) committee (Hatch-Enzi-Hagan amendment)
by a 16 to 7 vote. Eshoo altered her bill to reflect
that of the Senate, passing the House Committee on
Energy and Commerce 47 to 11. This amendment
made it into the Affordable Health Care for Americans
Act (H.R. 3962; key biosimilar provisions in Table 1)
that passed the House, and the Senate has adopted
largely similar language for their healthcare reform
bill, although the issue of nonproprietary nomenclature is not addressed. However, some members of
Congress and the Generic Pharmaceutical Association
remain vocally opposed to the current language. With
disparate opinions on the incentives needed to spur
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innovation while allowing biosimilar competition that
could reduce costs, it remains to be seen what the
final legislation might include.
Biosimilar Impact on European
Markets
The EMEA has an established abbreviated regulatory
pathway for biosimilars and the first product hit the
market in Europe in 2006, with several additional
products following soon after (Table 2). To gain
approvals for biosimilars, simply demonstrating
bioequivalence was determined insufficient. The
EMEA requires clinical trials, including comparability
studies to the originator product, to demonstrate
safety and efficacy. The manufacturer must also
demonstrate comparable immunogenicity. Guidelines were established to provide further details on
specific needs for demonstrating biosimilarity for
four primary product classes. This was instituted due to the differences in complexity of the
molecules and history of safety issues, such as the
PRCA associated with EPO. More complex product
classes with a record of side effects require more
stringent demonstration of safety.
In many European countries, pharmacists automatically dispense the generic form of the branded
product that the physician has prescribed. However,
the EMEA has made clear that a biosimilar is not the
same as a generic drug and handed the interchangeability issue over to individual countries, most of
which do not allow this practice. Some countries,
including large markets France and Spain, have
gone so far as to pass legislation that outlaws automatic substitution of biosimilars for the originator
products. The physician must now provide explicit
instruction on which product to use, or the pharmacist must call the physician for consent to switch,
even when the nonproprietary name is the same.
Clearly this places the onus back upon the physician
and requires the physician be well versed in product
differences.
Thus far, two human growth hormone (HGH) products, five erythropoietins (EPO), and four granulocyte colony-stimulating factor (G-CSF) biosimilars
are on the market in the EU (Table 2). The EMEA
has denied the market approval application for two
products from BioPartners, Alpheon and Biferonex,
biosimilar versions of interferons alfa-2a and
beta-1a, respectively. Of note is that the nonproprietary name for erythropoietin biosimilars Retacrit®
(marketed by Hospira) and Silapo® (Stada) were
not allowed to match that of the originator product
epoietin alfa (Table 2), demonstrating the potential
challenge to biosimilar companies pursuing drug
interchangeability.
The launch of biosimilars in the EU has yet to
have a major impact on market shares of existing
drugs. Sandoz’ HGH biosimilar Omnitrope® has only
grabbed a small piece of the market despite its
branded competitors having raised prices, and even
with additional launches of Omnitrope in convenient
pen devices. Although it did not gain regulatory
approval through the abbreviated pathway, Shire’s
discounted EPO product Dynepo never gained
significant market share and the company recently
discontinued marketing the drug. The limited success is largely due to the fact that branded products
have been entrenched in the market for years with
positive results while there is some apprehension to
biosimilars as they are new and without a track record of safety and effectiveness in practice. Further,
the relatively modest discounts of 25-30% have not
been enough incentive for patients and physicians
to switch products, making it difficult for biosimilars
to gain significant market share.
Despite relatively minor market penetration as a
whole, Germany may be seen as the early adopter
due to extreme pricing pressures leading to biosimilar acceptance by the Federal Healthcare Committee. Erythropoietin biosimilars in Germany have
steadily increased market share and led to a reduction in branded product prices and loss of sales. The
increasing acceptance of biosimilars in Germany
likely demonstrates future trends in Europe, where
countries will bow to pricing pressures of biologics
and will shift toward biosimilars once the safety and
effectiveness profiles of early marketed products
are better demonstrated. A reversal of interchangeability restrictions could have a profound impact on
future sales of branded products.
Interest in Biosimilars from Big
Pharma
Due to inherent challenges, the demands for
launching follow-on biologic drugs are beyond those
required for small molecule generics. The need for a
sizeable property, plant, and equipment investment
and know-how in intellectual property law, clinical
development, regulatory interactions, manufacturing, and marketing, requires deep pockets and
extensive experience to bring a biosimilar to market.
Although several large generic companies are
trendsetters in pursuit of biosimilar opportunities,
the increased demands for financial backing as well
as development and promotion expertise in the
burgeoning market have recently led to a follow-on
biologic shopping spree from Big Pharma.
With an eye toward biologics due to shifting
industry trends, many of the largest pharmaceutical
and generic drug companies have been acquiring
biotechnology platform technologies over the last
few years (Table 3). In doing so, pharmaceutical companies have gained valuable intellectual
property for platforms to create biologic drugs,
whether they are novel, follow-on, or somewhere
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in between. With the increasing likelihood of a
regulatory pathway becoming a reality in the near
future, these companies have been establishing
their presence in the biosimilar space through the
creation of subsidiaries, partnering, or acquisition
of companies. Novartis’ Sandoz has been a pioneer
in the field and has biosimilar offerings already on
the market. Merck and generic company Teva have
each made bold acquisition and partnering moves to
be major players in the field. These follow-on biologics companies are actively developing products to
be at the front line when given the nod of approval
from the FDA.
With predictions that future drugs will be dominated
by biotechnology products, entering into the biologics realm is a sound strategy for pharmaceutical
companies. Investment in platform technologies
could allow companies to develop follow-on biologic
drugs in ways that are quicker and less costly
than the aging methods developed by innovator
companies, allowing less expensive manufacturing
that could allow price reductions while maintaining margins. Developing biosimilars also allows
pharmaceutical companies to enter the biologics
space while pursuing targets with proven markets
and mechanisms of action.
Many of the companies entering into the biologics arena are not merely looking to copy existing
products once they go off patent. Marketers at
these companies realize that patients and physicians may be entrenched with existing products
and difficult to convert through modest discounts.
Instead, some companies are looking to use their
platform technologies to develop “biobetter” drugs
that actually provide advantages over well-characterized existing products. Clearly, biosimilars and
“biobetter” products being marketed by experienced
pharmaceutical companies have the potential to
significantly threaten the bottom lines of biotechnology companies.
Potential Impact of Follow-on
Biologics on US Markets
Many global companies have biosimilar development programs underway (Table 4), and several are
waiting to enter the US market. Sandoz tested the
waters for biosimilar acceptance in the US with its
introduction of Omnitrope in 2007, approved under
a 505(b)(2) abbreviated approval pathway for new
drugs similar to previously approved products. The
FDA determined that this pathway was acceptable
Bracing for Biosimilars
Europe
North America
Table 4 – Representative Biosimilar Companies and Product Focus
Company
HGH
EPO
G-CSF
Insulin
Interferon
Teva / Sicor / Barr
(Teva world HQ in Israel)
DEV
DEV
MKT
DEV
DEV
Merck BioVentures
DEV
DEV
Hospira
MKT
DEV
Maxygen
MKT
Sandoz
MKT
DEV
Ratipharm / BiogeneriX
DEV
MKT
Stada / Bioceuticals
MKT
MKT, DEV
India
DEV
DEV
(CTLA4-Ig)
DEV
MKT
MKT
DEV
DEV
MKT, DEV
MKT (SK)
Dr. Reddy’s Laboratories
MKT
MKT
(Rituximab)
Ranbaxy
MKT
DEV
Wockhardt
MKT
Shantha Biotech
MKT
Intas Biopharmaceuticals
MKT
MKT
MKT
Reliance Life
MKT
MKT
MKT
MKT
MKT
SciGen (Singapore HQ, offices
globally)
MKT
3SBio (China‡)
DEV
MKT, DEV
MKT
MKT
MKT
MKT (SK);
DEV (tPA)
MKT
MKT
MKT
MKT
MKT
MKT
MKT
MKT
MKT
Nippon Chemical Reseach (Japan)
LG Life Sciences (Korea)
Other
DEV
MKT
Biocon
East Asia
mAb
DEV
Cangene (Canada)
Bioton / BioPartners
Hep B
SK; tPA* Vaccine
DEV
DEV
MKT
MKT: Product(s) on Market (includes less regulated markets than US, EU)
DEV: Product (s) in Development
Note: List is representative and not complete. Development programs are not published by many companies.
*SK – streptokinase; tPA = tissue plasminogen activator
‡China has many biotechnology companies, most of which produce biosimilars
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MKT (IL-2)
since Human Growth Hormone (HGH) is a relatively
simple, non-glycosylated protein. The application included supporting clinical data, but the FDA still only
ruled on its approval after a lawsuit forced them to
make a decision. Since then, Omnitrope has captured only 1% of the market. Cangene’s HGH product
Accretropin™ also recently received US approval and
will be interesting to monitor as the market crowds.
The Omnitrope example demonstrates that follow-on
biologics may face similar early challenges in the US
as have been seen with their introduction in the EU.
Several factors have the potential to inhibit a rapid
uptake of early follow-on biologics in the US. Since
the process of manufacturing biologics is relatively
expensive, there is less room for cutting costs that
would enable companies to sell them at greatly
discounted prices. Thus, price reductions will not
be as extreme as those found with small molecule
generics and competition will be more akin to brandbrand than brand-generic. Physicians and patients
who are comfortable with the proven safety and
effectiveness of the branded biologic will likely be
slow to switch to the biosimilar if the price differential is not substantial.
Although a discount of 10-30% from branded
biologics may not be a large motivating factor for
physicians and patients, this is a significant sum
to payers. Payers will take a quick interest in
follow-on biologics as the discounts would add up
to meaningful differences in their bottom lines.
Payers will likely structure their formularies to create incentives for biosimilar prescribing behavior,
such as greater out of pocket expenses for branded
products, and may attempt to force mandatory
substitution. A complicating factor to this strategy
is that most biotechnology drugs are provided in
the physician office or hospital setting, averting the
retail pharmacy that would substitute the products.
In addition, the current Medicare Part B structure
provides a higher reimbursement rate to physicians
for more expensive drugs, creating another reason
to resist biosimilar prescription (although lawmakers are aware of this loophole and have proposed
legislation to neutralize this factor).
Omnitrope has demonstrated that follow-on biologic
entry into US markets will likely not be rapid or easy.
Physicians and patients will likely hold onto their
reliable branded products in the short term. How-
Table 5 – Preparing for Biosimilars
Area to Address
Life Cycle Management
Physician and Patient Education
Description
P ricing strategies
Manufacturing improvements to cut costs
Second generation product
Novel delivery system
Authorized biosimilar
edical Affairs to describe underlying scientific differences
M
with follow-on biologics
Marketing campaign detailing years of safety and
effectiveness
Payer Communication
C ontract for rebates with branded use
Update value dossier and highlight risks that could offset
follow-on biologic discounts
Intellectual Property
P ursue extensive patent protection for early-stage
technologies
Carefully guard trade secrets that could differentiate
branded product from follow-on in the future
7
ever, payer pressure may erode this loyalty with
time, once safety and efficacy have been proven
and financial incentives established. Further, the
marketing machinery from familiar drug companies
pursuing biosimilar markets may sway consumers to put more trust in their products. Without an
abbreviated approval process in place, Teva recently
filed a BLA for its biosimilar version of Amgen’s
Neupogen®. Clearly, biosimilars are poised to be
a legitimate player in the US and global markets,
and biotechnology companies will need to plan
product lifecycle strategies that adjust to the new
landscape.
How to Prepare
The earliest biologics on the market are those under
the most immediate threat. Companies marketing
those products must systematically identify actions
they can take to brace for the increase of followon biologic competitors (Table 5). Although some
markets may be difficult for biosimilars to penetrate
initially, updates to brand strategies will require
thorough assessments of the competitive landscape, in-depth scenario planning, and new revenue
forecasts that incorporate the emerging threats.
Traditional lifecycle management tools can be
employed in response to follow-on biologics, including pricing, product improvements, and authorized
biosimilars. Biotechnology companies will need to
explore pricing and contracting strategies that could
minimize loss of market share while maximizing
sales. New technologies to improve manufacturing
and cut costs can be explored to help with pricing,
although pursuing new processes will not always be
worth the investment of equipment and bioequivalence studies.
Organizations can also work to improve or expand
the product line, either through second generation
products with enhanced formulation or by development of a novel delivery system. One potential
roadblock to this strategy is the threat of “biobetter”
follow-on biologics that may also pursue a competitive advantage. Alternatively, a company may also
help create an authorized biosimilar by licensing
their technology to the manufacturer, thereby maintaining revenue that will help offset some of the
lost market share. “Reverse payment settlements”
to follow-on biologic companies that delay market
entry may not be a viable option, as their legality
remains questionable and the House of Representatives included language (Rush amendment) in its
health reform bill to ban the practice.
Bracing for Biosimilars
Payer engagement will be critical to prepare for
market entry of follow-on biologics. Product strategies related to the payer-specific value proposition
and contracting will need to be revisited. The value
proposition will need to be updated to fully inform
payers of potential differences between biosimilars
and their branded products. Cost effectiveness of
the branded product will need to be highlighted,
including details regarding proven health outcome
benefits of the drug. Prices for the branded product
will need to be justified with data demonstrating
proven results. Rebate contracting for use of the
branded product will also need to be carefully
examined. Key payer accounts with broad market
reach and influence for the indication should be
approached for contracting in order to help maintain
market share.
In order to make informed treatment decisions,
healthcare professionals will be searching for means
to gain a thorough understanding of the issues
surrounding use of biosimilars rather than branded
biologics. Medical Affairs teams will have the opportunity to educate physicians and key opinion leaders
on the underlying scientific differences with follow-on
biologics that could potentially alter safety and efficacy. Traditional marketing campaigns can also be
launched detailing the many years that the drug has
effectively treated many patients. These programs
should focus on the differentiation of the branded
product from the biosimilar.
For products in early stage development, the threat
of biosimilars is long-term. However, biotechnology
companies should be planning strategically now
through use of intellectual property protection. Not
only should patents be pursued for composition of
matter, method of use, formulation, and methods of
manufacture, but trade secrets regarding manufacturing procedures that could potentially help
differentiate the innovator product from a biosimilar
should also be carefully guarded.
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8
Conclusion
Follow-on biologics are on their way to the US. With
the momentum for healthcare reform, it is only a
matter of time until the legislation to support an
abbreviated regulatory pathway is passed. As
demonstrated in Europe, biosimilars will not have
a straightforward path to immediate market success. However, with experienced pharmaceutical
companies jumping into the game, competition will
soon be a reality. Now is the time for biotechnology
companies to develop strategies to prepare for the
coming wave of biosimilars in order to maintain the
commercial successes of their branded products.
For questions or comments, contact:
Fahti Khosrow-Shahi at
[email protected]
Telephone: (919) 844-7100
Toll Free: (888) 297-2001
www.campbellalliance.com