To launch or not to launch? The Biosimilar dilemma.

Much news has been written about the advent of Biosimilars and their financial impact on the cost of healthcare. Biosimilars are biologics that have a version of the active ingredient that is an already-approved medicinal product. The approval of biosimilars is made by the Food & Drug Administration (FDA) in the United States and by the European Medicines Agency (EMA) in the E.U. based on what is already known about the active ingredients. A biosimilar product is a biological product, as opposed to being a chemical product (e.g., a single-compound, small-molecule drug). Examples of biological products include:

• Blood Components
• Cell-Signaling Proteins
• Gene Therapeutics
• Monoclonal Antibodies
• Tissues
• Vaccines

Biosimilar vs. Generic

A biosimilar is not the same and cannot be put into the same category as a generic drug. A generic compound (i.e., a chemical product) is an identical compound to that which the FDA or EMA approved. Effectively it is a simple, non-branded version of a product that already exists.

Generic production of FDA- or EMA-approved medicine is possible when the patent for the original, branded product expires. nn With a biosimilar product, it has the active ingredients in the reference product but is not an exact duplicate as found in a generic version. As such, a biosimilar product has no clinically meaningful difference when compared to an existed, approved FDA reference product. nn The biosimilar product may have a different physical structure when compared to the reference product. It may contain different clinically inactive components. However, in molecular and biological terms, the active ingredients are essentially the same for a biosimilar product when compared to the reference biologic product.

The History of FDA Regulation of Biosimilar Products

In America, Congress passed the Biologics Price Competition and Innovation Act (BPCIA) in 2009. The BPCIA created shortened licensing procedures with less need for clinical trials for a biological medicine that is similar enough to be interchangeable with an already-approved biological product. Good candidates for new approvals are products that have minor differences from clinically-tested products and are extremely similar to the original biological, reference product. The first FDA-approved biosimilar product in the United States was Zarxio, approved in 2015. Zarxio® (filgrastim-sndz) is a biosimilar match with Neupogen® (filgrastim). This medicine reduces infections that are a side effect of taking chemotherapy. Since 2015, there are 25 FDA-approved biosimilar products with over 50 more currently in development. Important is the potential of these products having a meaningful financial impact on the cost of medicines. Estimates made by the Rand Corporation states that that savings from price competition coming from biosimilar products may be up to $54 billion from the ten years from 2017 to 2026.

Strategies to Launch a New Biosimilar Product

There are many hurdles to overcome for the successful launch of a biosimilar product. Regulatory approvals are manageable by following the FDA and EMA guidelines. Nevertheless, being approved does not necessarily translate into a successful launch. The success goal is widespread acceptance for use of a new biosimilar product in both the healthcare setting (i.e., hospitals, clinics, physician offices) as well as the attainment of payer reimbursement. nn An existing pharmaceutical company (i.e., the Innovator) is not going to accept the loss of market position to a biosimilar competitor without putting up a significant fight. Furthermore, as a new market entrant, it takes significant educational efforts in conjunction with a long-term, comprehensive, multi-channel marketing, distribution, and reimbursement strategy for market penetration.

Companies selling established reference products do not need to rely on clinical data to support the perception that their products are superior to biosimilars. There is physician experience, patient experience, and force of habit when prescriptions are provided. nn Think of the market differentiation between a standard cup of coffee and how coffee is perceived when purchased at Starbuck’s and you will get a clearer understanding of the market barricades for a new biosimilar product. How would you present a new Starbuck’s coffee-similar product?nn How to market a new biosimilar product and deciding what type of heath networks are the target of the marketing campaign matters significantly. Payers, health care systems, networks, and hospitals are able to drive the conversion to a biosimilar product by providing education for patients and clinicians.

Caution

While the opportunity for biosimilar products is significant, the potential risk to the biosimilar manufacturer is the race to the bottom in terms of pricing. We have seen product shortages, while driven by a variety of causes, also driven by taking the profit out of a given product or product category. Let’s not allow the biosimilar category to be impacted by this phenomenon. Effectively when too many competitors drive the prices so low, that everyone leaves a product category. Might this impact the potential $54B savings by creating product shortages that actually drives up cost? Caution should abound and only time will tell.