Tuesday, October 19, 2010

4 building blocks for a biosimilars strategy

Pharmaceutical Executive called biosimilars “this decade’s most disruptive technology.”

Biosimilars are the pharmaceutical industry’s segment that will finally seize momentum over the next few years, paced by the growing dominance of biologic drugs as top industry revenue producers and the scheduled launch of a few high profile biosimilars in 2014.

Here’s the basic forecast from Decision Resources data crunchers: by 2016, seven of the 10 top selling brands will be biologics, opening up new pathways in the biosimilars space, and resulting in biosimilars accounting for roughly a quarter of the total biologics market in 2019, or $14 billion annually. Another factor likely to accelerate prospects for biosimilars is that nearly all the revenue growth in biologics through 2019 will be driven by therapies already on the market.

Major healthcare companies are making biologic and biosimilar development a priority. Merck & Co., which recently merged with Schering-Plough, has made biosimilars the focus of MerckBioVentures, a division created in December 2008. Following the company's recent portfolio prioritization, Merck has five novel biologics and two biosimilar candidates in clinical development.

Moving forward, experts indicate that biotech firms will continue to face a challenging funding environment. Companies best poised for success are those that will increase financial and R&D efficiency and find creative models for funding and partnering.

To better position themselves against generic manufacturers, pharmaceutical and biotechnology companies are investing in their own biosimilar research. Expected to reach a market value of $10 billion by 2017, there is great interest in the development and manufacturing of these products. As a result, Novartis and Merck have established biosimilar development divisions. However, legislation regarding regulatory pathways and patent infringement could impact investment in this area.

The editors of Pharmaceutical Executive believe that what still makes it hard to assess prospects for biosimilars is the challenge of defining the terms of engagement. “The concept itself is open to interpretation, which leads to definitional problems,” they write. “In addition to biosimilars, which are essentially generic versions of branded off-patent biologics, there are biobetters, which are conceived to differ from the originator in formulation or delivery mode with the overall aim of obtaining an improved pharmacokinetic profile. This leads in turn to a lack of clarity in figuring where the real opportunities are and defining a strategy to exploit them.”

Here are four building blocks for a biosimilars strategy presented at a recent conference:
  1. Biosimilars are a classic “disruptive technology” that will change the competitive landscape in unforeseen ways.
  2. The biggest companies may be having second thoughts about entering the biosimilars space.
  3. Pricing and market access remain unsettling questions for strategists.
  4. Key policy issues must be resolved before the sector can truly obtain its market potential.
Click here to read the details of these four building blocks. 

And to help marketers study the landscape, a PharmaLive Special Report has been published entitled, “Biotech/Biopharma/Biosimilar Review and Outlook 2010.”  Click here to learn more.

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