GBI Research, the leading business intelligence provider, has released its latest report, “Biosimilars Approval Pathways in the US and Europe – Development and Approval of Biosimilar mAbs May Face Tough Regulatory Environment” that provides key data, information and analysis of the major trends and issues affecting the global biosimilar market. The report provides a comprehensive insight into the biosimilar market. It offers geography-wise as well as category-wise market forecasts for biosimilars and provides the drivers and restraints affecting the biosimilars market. The report also talks about the business environment and the key success factors in the global biosimilar industry. The report also describes the regulatory environment in the US, top five European markets and Japan with respect to biosimilars. At the end, the report looks into the competitive landscape of the biosimilar industry by offering profiles of key players in the industry and the analysis of major deals that took place in the industry.
The report is based on proprietary databases, primary and secondary research and in-house analysis by GBI Research’s team of industry experts to provide a comprehensive view of the manufacturing of solid dosage forms.
Global Biosimilar Market is Poised to Witness a Strong Growth
The global market for biosimilars is valued at $243.8m in 2009 and is expected to increase to $4,697m in 2016 at a compound annual growth rate (CAGR) of 52.6%. The market will be driven by increasing pressure on governments to control rising healthcare expenditures and establishment of abbreviated regulatory approval pathway for biosimilars in the US besides patent expiry for major biologic drugs. The market is expected to gather momentum after the launch of biosimilar monoclonal antibodies.
Escalating Healthcare Expenditures Increase the Need for Low Cost Biosimilars
GBI Research analysis finds that reduction of healthcare expenditures is on top of the agenda for governments and so initiatives on introducing regulations governing biosimilars seems to be of prime importance in developing nations. Since biologics are among the highest priced therapies in the world, controlling expenses due to high priced biologics is one of the key focus points and it has increased the expectations of a regulatory pathway among the biosimilars industry participants.
Biologics Price Competition and Innovation Act, 2009 Opens the Gates for Approval of Biosimilars in the US.
Biologics Price Competition and Innovation Act (BPCIA), signed into law by US President Barack Obama in March 2010, establishes a regulatory pathway for approval of biosimilars in the US. The act empowers the FDA to develop standards to evaluate and approve biosimilars in the US. The act also grants FDA the authority to develop comprehensive guidelines for approval of biosimilar products or product classes. The act grants a market exclusivity of 12 years and data exclusivity of four years to innovator biologic drugs. Market exclusivity of 12 years is considered to be favorable to the innovator biologics.
The act also puts forward a resolution process for biosimilar related patent disputes. The process of patent resolution is very complex and is not very favorable to the biosimilar manufacturers. This patent resolution process is being considered as a major hurdle to the growth of biosimilars in the US.
Lack of Interchangeability Between Biosimilars and Reference Products and Absence of Automatic Substitution of Biologics Slows Down Uptake of Biosimilars
GBI Research finds that one of the main challenges facing the biosimilars market is the intrinsic difficulty in replicating the efficacy profile of the original product. Biosimilars have similar therapeutic properties but they are not the same and hence the issue of interchangeability is a major hurdle for the rapid growth of the biosimilars market. Unlike generic versions of chemical drugs, biosimilars require preclinical and clinical studies to evaluate and comparison of efficacy and safety, if the biosimilars manufacturer claims interchangeability. Manufacturers of branded biologics are opposed to the idea of automatic substitution at the pharmacy due to differing characteristics of biosimilars and original drugs. Europe has made significant progress in establishing a pathway for biosimilars and has set an example which no doubt other regions will follow. In Europe, all medicines are given an 11 year data protection period and the choice of interchangeability or substitution is left to the member states. However, GBI Research analysis finds that substitution for biologics is not a guaranteed possibility in the future. Hence, rapid uptake of biosimilars akin to generics of conventional drugs is not possible due to lower price differential, lack of substitution and negative perception about generics in markets which have traditionally been consuming branded products.
High Costs of Development and Manufacturing Coupled with the Need for Technical Expertise in Biologics Act as Entry Barriers for Smaller Players and Favors Larger Players
GBI Research’s analysis suggests that the high costs of development and manufacturing favors the success of large pharmaceutical companies with technical expertise, sales force strength and financial strength. Consequently, smaller players are not able to compete on financial grounds as well as production capacity. The biosimilars market is unlike the market for chemical drugs’ generics counterpart where the development and manufacturing costs are comparatively much lower. The expected price reduction for a biosimilar is not more than 10% to 30% than that of the original biological. This marked difference between the biosimilars and traditional generic drugs, where the price reduction is more than 70%, is because biosimilars, unlike traditional generic drugs, require preclinical studies and clinical studies to prove bioequivalence and safety.
The cost of constructing a biopharmaceutical manufacturing facility is nearly $40m to $300m and the manufacturing process is very complex and needs technical personnel with expertise in biopharmaceutical manufacturing. Sales and marketing of biopharmaceutical drugs also needs experienced sales force, which the smaller biosimilars companies lack. While companies with financial muscle can afford these high costs and spend an average development time of six to eight years, smaller manufacturers are discouraged from entering the biosimilars market.
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