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We recently participated in the Financial Times US Healthcare and Life Sciences Conference on June 6, 2012 in New York City. Below are some of the points that were discussed during the biosimilars panel that Wes Wilkes, our Executive Director of Global Strategy, participated in during the panelBiosimilars: Coming of Age?
Biosimilars are here. Most of the conversation today is how the regulatory pathways will shape the landscape in the US, EU, and the rest of the world. What we are helping most of our clients with today is looking past the regulatory approvals and focusing on the uptake and competition post-regulatory approval.
The uptake in developed markets will ultimately provide significant savings and access to a new population of patients. But new entrants may be underestimating the loyalties that exist with reference product manufacturers, and the trepidation that may exist for providers and patients to switch to the biogenerics, specifically those that treat more chronic conditions.
We are not talking the same price disparities we see with generics in the small molecule space. In some markets we may be talking less than 30% in price savings, not to mention the price elasticity reference product manufacturers are willing to explore as the basement price for many of the big products is still unknown. Pair that with the brand loyalty, trust and safety that have been built up over the last decade — and we have a much different game on our hands.
Some of the newer entrants can learn from the mistakes made in the past in the small molecule space, especially in how they will compete and differentiate themselves in a highly competitive environment.We see the future successors differentiating themselves on:
1) The corporate/manufacturer brand
2) The manufacturing process
3) The technologies and delivery devices
However, we see most of the efforts to date being placed in the reverse order. Of course the technology and delivery device is an obvious differentiator, but we are encouraging our clients to consider the uptake barriers that do and will exist post-approval.
One of the greatest barriers is concern over safety and quality controls. Yes, the price will be a driver of choice, but the hurdle of a relatively “unknown” player with different manufacturing technologies may not be enough to overcome the price disparity.
Starting now to lay the foundation of the corporate and manufacturer equities will be key to post-approval commercial success. Providers and payers will have an increased scrutiny on this space especially in the more chronic conditions. We feel that focusing only on the differences in delivery and dosing may be a bit myopic in a category where brand loyalty, trust and respect will be key.