Focus on Biosimilars
The Big Business
of Biosimilars
Uptake of biosimilars to the market
– and the potential savings – will
depend on physician education
and confidence.
To gain approval from the U.S. Food and Drug
Administration (FDA), a biosimilar must be proven
to have highly similar pharmacologic, safety, and
efficacy profiles to an already approved biologic
product. The hope is that biosimilars will carry a
very different price tag, though.
“This is a very important opportunity for the
health system to save billions in a way that maintains
the highest standards of care for patients and their
loved ones,” said Caleb Alexander, MD, co-director
of the Johns Hopkins Center for Drug Safety and
Effectiveness in Baltimore, Maryland. “There are
exciting opportunities ahead for patients, providers,
and the health system to get better value for their
health-care dollar.”
To speed approval, the Affordable Care Act
included an abbreviated licensure pathway for
biosimilars through the Biologics Price Competition
and Innovation (BPCI) Act of 2009. According to
the FDA, the goal was analogous to that of the Drug
Price Competition and Patent Term Restoration Act
of 1984 (Hatch-Waxman Act), which encouraged
generic competition for drugs, but provided incen-
tives for new drug innovation. 1
ASH Clinical News spoke with Dr. Alexander and
other experts about how biosimilars might affect the
pharmaceutical marketplace.
The Economics of Biosimilars
Unlike conventional medications, which are made
through a synthetic chemical process, biologics are
derived from nature and cannot be cloned. “Biosim-
ilars are considered highly similar but not an exact
copy,” said Joseph P. Fuhr Jr., PhD, adjunct profes-
sor of pharmaceutical and health-care business
at the University of the Sciences in Philadelphia.
“Biologics are generally liquids made in batches, and
those batches can vary from one to the next.”
There also is a vast economic difference between
traditional pharmaceuticals and biologic products.
The average daily cost of a conventional, chemi-
cal drug in the U.S. is $2. At $45 per day, biologics
cost approximately 20 times that amount. 2 In 2016,
Roche, the manufacturer of bevacizumab, reported a
group revenue of about $25 billion, driven largely by
three of its biologic cancer drugs: rituximab, trastu-
zumab, and bevacizumab. 3 If a biosimilar to any of
those products acquired even a small share of the
market, it would stand
to earn a large sum.
“Pharmaceutical
manufacturers consider
several factors when
deciding whether
to enter the market,
including the risks and
costs of entry and the
expected return,” Dr.
Alexander said. “But
for a $6 billion drug
like bevacizumab, for
which the first cancer
biosimilar was ap-
—CALEB ALEXANDER, MD
proved, I would expect
“This is a very important
opportunity for the health
system to save billions in a
way that maintains the highest
standards of care for patients
and their loved ones.”
124
ASH Clinical News
to see other biosimilars down the pipeline soon.”
Biosimilar manufacturers are not the only ones
who stand to benefit from the introduction of more
biosimilars to the marketplace. In theory, consumers
win when there is increased competition.
“We have limited experience in the U.S. with
biosimilars,” said Dr. Alexander. “We don’t know
exactly how they will be priced and how they will
ultimately affect the economics of the pharmaceuti-
cal marketplace.” However, basic laws of economics
suggest that biosimilars will affect the pricing of
their reference drugs, he added.
Biosimilars Pricing
Observations from the chemical drugs market, of
which generic drugs make up 84 percent, suggest
that health-care savings tend to accrue over time,
according to Carlos Sattler, MD, vice president and
head of clinical development and medical affairs at
Sandoz, a division of Novartis that specializes in the
development of biosimilars.
“During the first six months after a manufac-
turer loses exclusivity of its branded product, the
market typically has three players maximum: the
generic producer who was first to file for marketing
authorization, the authorized generic manufactur-
er, and the originator,” he explained. “Following the
exclusivity period, we typically see a dozen or more
competitors entering the market, which causes
rapid price erosion.
“The situation is different for more complex
generics, where there are fewer players,” Dr. Sattler
said. “The decline in originator sales tends to occur
over a longer period. We expect a similar dynamic
with biosimilars in the U.S.”
Sandoz is the manufactu