Do Biosimilars Represent a Threat to Big Pharma?
As the industry looks to find more effective ways to manage the rising burden of genetic, autoimmune, rare diseases, and cancers, the next 10 years could be significant for companies with an interest in biologics drug products. The sector – estimated to have been worth $460 bn in 2022 – is expected to grow significantly due to rising demand in emerging markets across Asia and Latin America. As the industry aims to enhance value for patients and healthcare providers, biosimilars have featured as cost-effective alternatives to branded medications.
Biologics vs Biosimilars
A biologic is a complex molecule or mixture of molecules that are derived from a living organism or produced in a living system such as a microorganism. A biologic can be classified as biosimilar to a branded product once it receives FDA, EMA or local approval – such as that outlined by Biologics Price Competition and Innovation Act (BPCIA) in the U.S. – and needs to demonstrate it has no clinical differences and the same effectiveness as an originator product.
As we’ll discuss, the biosimilar developer needs to balance speed-to-market with maintaining a high quality of clinical evidence, and ensure maximum uptake of biosimilar products to realize a return on investment, which includes ensuring physicians and patients are comfortable with the biosimilar product.
Will Biosimilars Replace Branded Biologics?
As you might expect, the rise of biosimilars presents a potential problem for Big Pharma, who rely on the strong revenue over the life of their branded products; the impact of which is discussed in a recent IQVIA report that predicts revenue losses for originator products being substituted by biosimilars will rise from $111 bn to $192 bn by the end of 2028.
This point has been recently demonstrated with Johnson & Johnson (J&J) & Janssen’s immunology drug, Stelara. The drug achieved $7 bn worth of sales in 2023, but significantly, this was also the year it lost exclusivity on one of its key patents.
One company hoping to take some of Stelara’s market share is Biocon Biologics, who filed an Inter Partes Review (IPR) in August 2023 to challenge all 34 claims of Stelara’s original patent. Instead of pursuing litigation, J&J/Janssen instead chose to enter an undisclosed commercial partnership with Biocon, which, should the FDA approve it, will allow Biocon’s Bmab 1200 biosimilar to be launched after February 2025 with a dismissal of the patent litigation.
It seems J&J’s share price has suffered because of the news, with their announcement that first quarter results showed flattish sales, slightly down on Wall Street’s predictions. J&J’s CFO, Joe Wolk, seemed to downplay the claims, highlighting that the results were due to contracting renegotiations with healthcare providers and pharmacy benefit managers (PBMs) in anticipation of the drug's loss of exclusivity in the U.S. next year.
But it’s not all bad news for J&J. The licensing agreement that will come into force has delayed entry of Biocon’s biosimilar until next year, with analysts predicting Stelara will continue to generate revenue for longer than initially expected.
The challenge of biosimilars is clearly significant, but does the introduction of a biosimilar always predict tumbling sales of the originator product? Maybe not, based on performance of AbbVie’s own biologic blockbuster arthritis drug - Humira (adalimumab).
Since losing exclusivity in January 2023, several biosimilars to Humira have entered the market. Notably, only two of those, Boehringer Ingelheim’s biosimilar Cyltezo (adalimumab-adbm) and Alvotech and Teva’s, Simlandi (adalimumab-ryvk), received interchangeable status - authorizing that they could be substituted for the branded product without the need to change a prescription.
So, with plenty of competition and two competitor products interchangeable, you’d think sales of Humira would have suffered significantly, right? No. Humira still controls 96% of the market and competitors have not yet disrupted its market dominance, despite being offered with significant price cuts.
Based on IQVIA data, the Biosimilars Council cited the significant role played by PBMs in the dispensing process. PBMs could generate up to $6bn in savings for the U.S. healthcare system if they transitioned all Humira to biosimilar alternatives. It took until the start of this month for CVS Health to announce it would drop Humira for cheaper biosimilars, which might encourage other leading distributors to do the same.
It seems that there will be two key drivers when it comes to the uptake and success of biosimilar drug products.
First, biosimilar manufacturers will have to work hard to break the stranglehold of strong brand recognition and the long-held ties between Big Pharma and the distributors that sell their drugs. Effective marketing and sales campaigns that reach clinicians and patients are likely to be beneficial in doing so, but come with a significant cost.
Second, partnerships and licensing agreements may be a beneficial tactic for both parties. Like J&J’s partnership with Biocon Biologics, an agreement may allow Big Pharma to closely monitor competitor activities and forecast their own future sales, and biosimilar developers can enjoy greater access to technology and distribution, without the fear of legal infringements.
