Market Report Source

Overview

Introduction
Significant barriers to entry into the biosimilars market exist. High up-front investment and the need for specific expertise favor big players. Understanding of the marketplace is critical for success acceptance by key stakeholders is crucial for market uptake of biosimilars and achieving preferential reimbursement status through constant review of the pricing strategy is desirable.

Scope of this report

• In-depth analysis of factors influencing market uptake of biosimilars
• Analysis of the pricing and reimbursement environment for biosimilars
• Detailed analysis of barriers to entry and strategies for success in the biosimilar market
• Overview of strategies for originators’ market share protection

Research and analysis highlights
Lack of automatic substitution with biosimilars means that intense promotion strategies need to be employed. Market uptake of biosimilars is highly dependent on acceptance by all key stakeholders especially physicians. All stakeholders need to be informed about biosimilars and various channels can be used.

Payers’ reaction to biosimilars is not known, but it is expected they will embrace them after a lag period. Standard incentives used to encourage generics use may not be applicable to biosimilars distributed in hospitals and alternative approaches need to be used.

Barriers to entry remain high: high development and marketing costs compounded with the need for specialist expertise favor big players with strong financial backing and experience in branded generics industry. However smaller specialist players are well positioned to enter this market through co-development and co-marketing agreements.

Key reasons to read this report

• Identify key stakeholders than need to be targeted in order to achieve high uptake of biosimilars
• Understand the pricing and reimbursement environment of biosimilars, barriers to entry and key strategies for success in the biosimilars market
• Gain insight into strategies employed by innovative pharmaceutical and biotechnology companies in order to maintain their market share

Table of Contents

CHAPTER 1 EXECUTIVE SUMMARY

Scope of the report

Key findings

Key definitions

CHAPTER 2 INTRODUCTION TO THE BIOSIMILARS MARKET

Drivers and resistors of growth in the biosimilars market

Drivers of biosimilars market growth

Biologics market growth

Advances in analytical techniques used to characterize biologics

Cost-containment pressures are driving the need for biosimilars

Resistors of biosimilars market growth

Lack of a regulatory pathway in the US

Opposition from the innovators

Cost and complexity of development

Europe as a testing ground

Five biosimilars have been approved in Europe so far

Outcome of US legislation – market exclusivity and difficulty

CHAPTER 3 FACTORS INFLUENCING MARKET UPTAKE OF BIOSIMILARS

Uptake is critical for market success

Patient switching is harder than with small molecule generics

Automatic substitution may be governed by legislation

Multiple stakeholders need to be targeted to ensure high uptake

Pharmacists have a role in the uptake of biosimilars

Patients’ role in uptake

Physician uptake is critical

Informing physicians about biosimilars

CHAPTER 4 PRICING AND REIMBURSEMENT OF BIOSIMILARS

Pricing of biosimilars

Reimbursement of biosimilars

Payers perspective

EU payers are influenced by physicians and pharmacists

Retail biosimilars can lead to modest savings

Standard strategies for promoting generic uptake may not work for biosimilars dispensed in hospitals

US payers may introduce reimbursement incentives

Tiered formularies are used by MCOs and PBMs

MCOs and PBMs are stressing the need for biosimilars

Discounts, rebates and patient co-pay will influence the use of biosimilars

Product class analysis

HGH market is hard to penetrate

Price may be the key factor affecting biosimilar epoetin uptake

Restrictions on epoetin use in the US will impact the overall market size

Launch of first biosimilar epoetin alpha in Europe is imminent

Interferon alpha market is dominated by second-generation products

Interferon beta market is growing but competition from improved products exists

Insulin market is not an attractive target for biosimilars

Granulocyte colony-stimulating factor has attracted many biosimilar companies

Biosimilar Enbrel presents a very lucrative opportunity

Monoclonal antibodies will not be targets for biosimilars in the near future

CHAPTER 5 BIOSIMILARS MARKET ENTRY

Barriers to entry are high but not insurmountable

The development of biosimilars is more complex and costly than that of small molecule generics

Lack of specific expertise

Complex patent protection of biologics is another barrier

High promotional costs

Expensive to exit

Competitive landscape less crowded than for small molecule drug generics

Smaller number of entrants

Early entry brings advantage but is risky

Contract manufacturing organizations will enter the biosimilars market

Big players will remain

Biosimilars manufacturers in the emerging markets

Low cost base is an advantage…

...but gaining regulatory approval is difficult

Confidence is important for acceptance

Case Study: Omnitrope – the story so far

Omnitrope’s EU approval was not smooth

US approval for Omnitrope was granted only after a law suit

Pricing and launch strategy for Omnitrope

Omnitrope’s branding strategy

Omnitrope sales to date

Line extension – liquid Omnitrope formulation

Case Study: Sandoz’s biosimilar epoetin alpha

CHAPTER 6 KEY RECOMMENDATIONS FOR SUCCESS

Making biosimilar products

Acquire biopharmaceutical expertise, facilities or pipelines

Marketing of biosimilar products

Achieving profitability in the biosimilars market

Low-cost manufacturing

Choice of reference product is important

Early entrants are rewarded

Enter strategic partnerships

Positioning of biosimilars – biosimilar or full submission route

Second-generation biosimilars

SWOT analysis of biosimilars manufacturers

CHAPTER 7 ORIGINATORS’ STRATEGIES FOR MARKET SHARE PROTECTION

Communication with decision makers is crucial

Lobbying regulatory bodies

Automatic substitution should not be allowed for biosimilars

Labels should clearly state if a product is a biosimilar

Biosimilars should have different names

Informing physicians and patients about proven safety

Informing payers about quality and cost of service

Patent protection

Pricing strategies

Lifecycle management strategies for biologics

Authorized biosimilars

Licensing agreements with biosimilar manufacturers

Line extension

Innovative delivery systems

Innovation, innovation, innovation

Will branded pharma and biotech enter the biosimilars market?

CHAPTER 8 BIBLIOGRAPHY

Publications and online articles

Conference literature

Datamonitor resources

Suggested reading

GLOSSARY

List of Tables

Table 1: Aspects of biosimilars that influence acceptance by pharmacists

Table 2: Companies taking part in the South London epoetin tender

Table 3: Development and approval processes of biosimilars and small molecule generics

Table 4: Omnitrope sales by country, H2 2006-H1 2007 in USD

List of Figures

Figure 1: Multiple stakeholders need to be targeted

Figure 2: Stakeholder influence on the final dispensing decision depends on the setting

Figure 3: Adoption process is different for hospital and retail biosimilars

Figure 4: Tiered formularies are used in the US

Figure 5: Competencies required for the development and marketing of biosimilars

Figure 6: Barriers to biosimilars market entry

Figure 7: Biosimilars development and marketing is a long and costly process

Figure 8: Key challenges and strategies for success in the biosimilars market

Figure 9: The 4Ps of marketing biosimilars

Figure 10: Characteristics of a successful biosimilars company

Figure 11: SWOT analysis of biosimilars manufacturers