Introduction and Market Scenario
Despite the debate over whether or not biosimilars be approved to enter the US market, the US senate passed an act in March 2010 to create a pathway for approval of biosimilars in the country, as part of the Biologics Price Competition and Innovation (BPCI) Act of 2009. This led to the opening of the largest biologics market worldwide for entry of generics. The move cannot come at a more appropriate time, as several biologics are scheduled to lose patent protection through the period 2010-2015, providing huge opportunities for biosimilar companies to expand their business. The US biosimilar regulatory pathway, once fully set and established in the near future, is expected to provide a significant impetus to the global biosimilars market.
The European Union, a market presently way ahead of the US when it comes to biosimilars, in 2010, included the much awaited guidelines for biosimilar monoclonal antibodies. With this, Europe is home to a broad array of biosimilars, including epoetin alpha, Granulocyte colony-stimulating factor, and recombinant growth hormone. Monoclonal antibodies (MAbs) are likely to capture a significant share of the biosimilars market globally by the year 2015. With most of the presently available branded products in this product category nearing patent expiries, MAbs offer huge market opportunity for biogeneric manufacturers. Furthermore, as MAbs delivery involves heavy doses, they are seen as high volume products.
Regionally, the US stands out to be the most lucrative market for biosimilars, followed by Europe and Japan. The US is expected to surpass Europe over the analysis period to become the largest biosimilars market.
Patent expiries of major biotechnology drugs constitute one of the key growth drivers for the biosimilars market. Several major biotech drugs such as Roche’s Herceptin and Rituxan, Sanofi’s Lantus, Amgen’s Neulasta are expected to lose patents, starting from the year 2012.
This would translate into tremendous opportunities for biosimilar manufacturers in the coming years. Biosimilar manufacturers would also receive a boost for continuing efforts to curtail healthcare costs worldwide, as they show potential to offer cost savings to insurance companies, government organizations, and patients alike. The number of old and elderly people is likely to increase sharply during the coming years, not only in the US, but also in several other countries.
The global aging population requires biologic drugs for the treatment of chronic and complicated conditions, such as kidney diseases or cancers, providing a major opportunity for manufacturers of biosimilar products.
Despite several positive factors taking shape on the biosimilars front, biosimilar manufacturers continue to face hurdles in their pursuit to launch biosimilars in developed markets such as Europe and the US. One major hurdle for the players is expected to come from the inclusion of 12 year exclusivity period for originator biologicals in the Trans-Pacific Partnership agreement. Additionally, bottlenecks, such as huge manufacturing and commercialization costs, uncertainty of approval as well as safety issues, indicate a scenario where only companies with substantial financial resources, legal expertise and advanced production capabilities would survive the battle.
However, with the US and Europe keen on implementing various specific and effective guidelines, which are expected to emerge as a backbone for the industry, the future for the biosimilars market in short term looks bright in these regions. In addition, biosimilars have been finding increasing penetration in the emerging markets, such as India, China, Latin America and Eastern Europe, all of which have less stringent regulatory framework for biosimilars. Availability of substantial manufacturing capacities and substantial cost savings are the other principal factors driving companies towards emerging markets. Another advantage of the emerging regions is the ease at which biosimilar products can overcome regulatory barriers in these markets.
Segment-wise, biosimilar Erythropoietin (EPO) is expected to remain competitive. Teva, Stada, and Sandoz are major players in the EPO category. The insulin market is expected to remain concentrated, with generic manufacturers such as Biocon and Wockhardt holding a strong market presence. Most of the major Indian companies have generic insulin or insulin analogs as pipeline products. Granulocyte Colony Stimulating Factor (G-CSF), being a capital-efficient product, represents one of the popular product categories among manufacturers. Teva, Sandoz, and Ratiopharm are some of the major companies focusing on G-CSF products.
Major players profiled in the report includes Biocon Ltd., Biopartners GmbH, Cipla Ltd., Dr. Reddy’s Laboratories Ltd., Hospira Inc., Intas Biopharmaceuticals Ltd., Sandoz International GmbH, Shantha Biotechnics Ltd., Teva Pharmaceutical Industries Ltd., Wockhardt Ltd., among others
Market Opportunity (Market Spends) on biosimilars
Although growth in annual spending on medicines is set to reduce, there is still a huge market out there and spending on biosimilars is expected to increase in the coming years.
According to IMS Health, by 2015 spending on biosimilars will exceed US$2 billion annually, or about 1% of total global spending on biologicals. They expect new biosimilars to enter the US market by 2014 and European markets to have additional biosimilar molecules introduced during this period. This is expected to increase spending on biosimilars to over US$311 million.
This growth in biosimilars will be driven mainly by patent expiries coming in the next 5 years, of which there are many. Between 2011 and 2015 a total of US$17 billion worth of sales in the US alone will lose patent protection, presenting a huge opportunity for biosimilar manufacturers to gain market share.
US patent expiries by market volume based on 2007 US retail sales
These three drugs alone are reported to have worldwide sales of more than US$5 billion annually.
Biosimilars use in Europe
A legal framework for approving biosimilars in the EU was established in 2003 and guidelines for an abbreviated registration process were issued in 2006. However, acceptance and use of biosimilars within Europe varies by country.
The European legal framework means that biosimilars can only be approved centrally via EMA and not nationally. EMA, however, does not make any decision on interchangeability of biosimilars for the originator product; this is made at a national level.
EMA approved the first biosimilar for somatropin (Omnitrope) back in 2006. To date the agency has approved 14 biosimilars for use in the EU, within the product classes of human growth hormone (HGH), granulocyte colony-stimulating factor (G-CSF) and erythropoietin.
Countries with high acceptance of biosimilars include Austria, Germany and Sweden. Germany, in fact, has some of the highest market shares in Europe based upon the implementation of quotas for biosimilar prescribing by physicians. UK, on the other hand, while it has relatively low acceptance of HGH and erythropoietin biosimilars, has the highest level of G-CSF use in Europe.
Use of biosimilars in Europe
Country Biosimilar share of originator sales (March 2011) HGH (Q2 2006)*
Erythropoietin (Q3 2007)*
G-CSF (Q3 2008) *
Austria 6% 50% 52% France 20% 11% 42% Germany 12% 65% 45% Greece N/A 67% 53% Italy 12% 7% 18% Poland 7% 62% 38% Romania 34% 58% 77% Spain 15% 16% 24% Sweden 21% 63% 45% UK 4% 9% 80% EU total 13% 18% 38%
*EU approval date; HGH: human growth hormone; G-CSF: granulocyte colony-stimulating factor; N/A: not applicable.
Source: IMS MIDAS//MTA Global Database: March 2011, Monthly Sales, Units
Evolution of biosimilars in the EU Member States
Differences in time period between EMA approval and market entry in EU countries
Biosimilar Market penetration (share Biosimilars vs. Biosimilars + Originator) (2009)