Biosimilars: opportunities and challenges in the EU, U.S. and Russia

Editor’s note: As part of its ongoing coverage of the biosimilar pathway and marketplace, BioWorld hosted a series of webinars with officials from leading biopharma companies to discuss their experiences in developing biosimilars for the EU, Russian and U.S. markets. These webinars, combined with questions raised by the audience and subsequent interviews with other companies in the biosimilars space, have been developed into a report by the author, Mari Serebrov, BioWorld’s regulatory editor: “Biosimilars: Opportunities and Challenges in the EU, U.S. and Russia.” The following is an excerpt.

Policymakers and the biopharma industry have been talking up the opportunity of biosimilars for more than a decade. Today, the opportunities loom larger than ever, with about $100 billion worth of biologics, including the all-time bestseller Humira, set to lose crucial patent protection in Europe and the U.S. over the next few years. In the U.S. alone, more than 70 biologics are expected to be off patent by 2021.

Much of the excitement about biosimilars is the potential savings they could offer, but the reality of those savings differs from market to market. In the U.S., for instance, only three biosimilars have launched – Sandoz Inc.’s Zarxio, referencing Neupogen (filgrastim, Amgen Inc.), and two biosimilars referencing Janssen Biotech Inc.’s Remicade (infliximab). Zarxio and Inflectra, the first Remicade biosimilar approved in the U.S., offered a 15 percent discount from the innovators’ list prices, which have increased over the years in advance of competition. So even with the discount, the biosimilars cost more than what the reference biologic did just a few years ago. As a result, Inflectra, partnered by Celltrion Healthcare Inc. and Pfizer Inc., eroded Remicade’s U.S. sales by only 5 percent after more than six months on the market.

“Many of us have been disappointed by the economic savings we’ve seen from biosimilars so far,” Scott Gottlieb acknowledged at a recent U.S. Senate confirmation hearing on his nomination as FDA commissioner. His disappointment was shared by Sen. Michael Enzi (R-Wyo.), who noted the slow pace at which U.S. biosimilars are being developed.

That disappointment may ebb as more biosimilars hit the market. Samsung Bioepis Co. Ltd. and Merck & Co. Inc. launched Renflexis in July as the second FDA-approved Remicade biosimilar at a list price 35 percent below that of the reference biologic. That discount could give both Remicade and Inflectra a run for the money. See Life Sciences Connect, Second Remicade biosimilar offers glimpse of competitive U.S. market future.

As of Aug. 1, the FDA had approved five biosimilars, but innovator patents are delaying the market entry of two of them – Amgen’s Amjevita, a biosimilar to Humira (adalimumab, Abbvie Inc.), and Sandoz Inc.’s Erelzi, a biosimilar to Enbrel (etanercept, Amgen). Two other drugs that have been approved elsewhere as biosimilars – Sandoz’s Omnitrope (somatropin) and Eli Lily and Co.’s Basaglar (insulin glargine) – came to market in the U.S. as 505(b)(2) drugs because of a quirk in the U.S. regulatory scheme. They, too, are offering about a 15 percent discount.

The biosimilar marketplace is more encouraging in the EU, which was the first to establish an official pathway for the follow-on biologics. With 28 biosimilars authorized as of May 31, most of which are on the market, the EU is seeing discounts of about 30 percent, with even steeper price reductions in some countries with competitive tender bidding or where multiple biosimilars are available for the same reference biologic.

In Russia, the price of the first biosimilar targeting a specific biologic is 20 percent to 30 percent lower than what the innovator has been selling for, said Ivan Romanov, vice president of R&D and international business development at CJSC Biocad, of St. Petersburg, Russia. That discount generally will remain stable until a second biosimilar comes to the market. Further competition is expected to lead to discounts of up to 80 percent from the initial price of the reference product.

Direct savings are not the only opportunity biosimilars present. Besides offering a discounted price, they can serve as a price control on the innovator, as well as the entire class of drugs. In the EU, the increased competition from biosimilars is driving down the price of entire product classes, providing greater access for patients. Similar trends have been experienced in Russia and other emerging markets, where pricing too often has made innovator biologics a luxury few patients could afford.

With biosimilars becoming commonplace in the EU and starting to get a toehold in the U.S., several companies are looking to expand their pipelines, and their bottom line, by adding biosimilars to their offerings. Meanwhile, a few early arrivals to the field are exiting, choosing to focus instead on innovation. Their decisions are often shaped by development and marketing challenges erected by the innovators, other biosimilars, regulators and payers.

For a complete, in-depth look at the global biosimilars landscape, download the full BioWorld biosimilars report from Clarivate Analytics.