CAN BIOSIMILARS GENERATE PROFITS?
The development costs of a biosimilar product that meets the requirements of a strongly regulated market have been estimated
by those developing such products to be $75–250 million and by the Federal Trade Commission to be $100–200 million (7,8).
When considering the global registration of a biosimilar, one variable still to be assessed in these estimates is whether
clinical trials will be required in each regulatory market. At present, the EMA has requested testing against a locally approved,
European-labeled reference product and there are signs that FDA will require testing against a US-approved and labeled reference
product. Duplication of the pivotal clinical trials is thus a possibility. In the US, the extent of data required to prove
that a product is "interchangeable" is undefined, but it can be expected to be significantly greater than the requirements
for a claim of "highly similar" to the reference product. With this high entry cost, a biosimilar will only be a viable prospect
when the potential sales of that product exceed $250 million per year (9).
Data from European experience with biosimilars can be examined to investigate the probable returns on the level of investment
needed to bring a biosimilar to market. In Europe, a biosimilar is approved through the central process common to all member
states, then each country decides whether the product may be substituted for the reference product and at what level that
substitution may occur. Table II provides data for biosimilar market penetration in Europe, by country, in the second quarter
of 2009. At this time, biosimilar human growth hormones (HGH) had been approved for three years, biosimilar epoetins (EPO)
for two years, and biosimilar filgrastims (G-CSF) for less than nine months.
Table II: Market share value for biosimilars in Europe (10). HGF is human growth hormone, EPO is epoetin, and G-CSF is granulocyte
colony stimulating factor.
The relatively high penetration of G-CSF in a short period of time suggests that increased familiarity with biosimilars in
the European market is improving uptake, but it could also reflect differing substitution concerns. What is noticeable is
that the originator product maintains a significant market share in the face of biosimilar competition. There is no evidence
of the dramatic erosion of sales seen in the patent cliffs of small-molecule originators.
The second part of the picture for biosimilar sales is the number of entrants to the market and the period over which they
launch products. With no equivalent of the Waxman–Hatch 180-day exclusivity period for the first generic competitor, the European
experience has been that several biosimilar products enter the market at the same time. While this has in part been influenced
by the timing of the development of the European biosimilar guidelines, the situation is likely to be mimicked in the US as
guidelines are issued or market exclusivity or patent periods expire. Figure 2 shows the situation in Germany following the
approval of the EPO biosimilars Binocrit and Mircera on Sept. 28, 2007, and Silapo and Retacrit on Dec. 18, 2007. Although
overall sales value for biosimilar EPO products has increased since 2008, the split between the manufacturers has been maintained.
Figure 2: Epoetin (EPO) sales in Germany following approval of the first biosimilars (data, ref. 11).
Based on a European market of approximately $600 million for EPO, extrapolation of these figures would likely give a biosimilar
uptake of $185 million, with the single biggest seller obtaining European sales of $100 million. These figures are theoretical;
for an example of real sales figures, Sandoz, which has been the leader in the biosimlar business since launching Omnitrope
(HGH) in Europe in 2006 and in the US in 2007, achieved combined global sales of the biosimilars Omnitrope, Binocrit (EPO),
and Zarzio (G-CSF) of $185 million in 2010 (12).
The key factor in these calculations is the uptake per country, which is governed by the substitution policy. Including the
potential US market, which is approximately 1.5 times that of Europe, achieving a sales target of $250 million per year for
a biosimilar will only be possible if a product is granted interchangeable status with the originator in the US market. The
requirements for interchangeable status have yet to be set but they can be expected to be very challenging.