As prices drop, Big Pharma will exit the biosimilar space over the next five to 10 years, says industry expert Sarfaraz Niazi. Amgen, Novartis and Pfizer refute the claim, saying they are in the sector for the long-term.
Blockbuster biologic originator companies are, by definition, Big Pharma firms and the target of biosimilar developers. Roche and AbbVie, two of the firms most susceptible to biosimilar erosion, have vocalized the need for a stringent regulatory framework – including calls for appropriate data, individualized labels, and unique identification for all biotherapeutics – while attempting to bat off competition by reformulating products and beefing up both their pipelines and IP.
But at the other end of the Big Pharma spectrum, there are several firms that dominate the biosimilar European and US markets, namely Novartis, Pfizer and Amgen, which all claim to have some of the largest biosimilar pipelines in the industry.
Novartis – through its Sandoz division – has been marketing biosimilars for over a decade in Europe, and was the first to launch a biosimilar in the US after Zarxio, its version of Neupogen (filgrastim), received approval in 2015.
Pfizer, which was the first to launch a version of J&J’s Remicade (infliximab) in the US, has four US approvals. The firm expanded its biosimilar pipeline through the $17 billion ( €14.9 billion) acquisition of Hospira in 2015.
Amgen, despite suffering revenue loss from an influx of first-wave biosimilars and trying to defend against versions of its bestselling biologic Enbrel (etanercept), has 10 biosimilars in its portfolio that includes US approved versions of AbbVie’s Humira and Roche’s Avastin.
Just a little bit of history repeating
But Big Pharma’s interest in biosimilars is soon to end, according to Sarfaraz Niazi, a pharmaceutical sciences and biotechnology expert with over 30 years of industry experience.
In 2014, Niazi wrote the Handbook of Biogeneric Therapeutic Proteins, a book that predicted Big Pharma will exit the biosimilars space once specialized developers appear on the scene.
“This is history repeating from the generics era,” he said. “There are so many ways to cut the cost of development and cost of manufacture but because of their mindset and design, Big Pharma cannot do this. They can certainly change both but that requires a monumental shift.”
Niazi, who founded biosimilar developer Karyo Biologics earlier this year, told BioProcess Insider that back in the 1980s many large pharma planned to enter the generic market. “However, as the prices tanked, they all pulled out.”
So far, the big companies are seeing much bigger profits in biosimilars than sustainable, Niazi argued. “I have projected that once the prices fall to below 60% of the current prices, it will no longer be feasible for the Amgens and Pfizers to stay in this market for long.”
And this will be accelerated when companies from India and perhaps China bring in products with substantially lowered cost, he continued. “Every monoclonal antibody regardless of its use costs about $150-200 per gram. This price will drop by another 50% once the Indian and Chinese companies start getting approvals; at this stage, the prescribers will become redundant and payers will take over.”
There are already signs of Big Pharma exiting the space, he continued, citing Merck KGaA’s exit from the space in 2017 when it divested its biosimilars business to Fresenius for an upfront payment of €170 million ($195 million).
And last month the other Merck – Merck & Co. (known as MSD outside North America – dropped its Lantus (insulin glargine) biosimilar program after assessing the anticipated pricing and cost of production of the product.
Meanwhile in the past few days, Sandoz, on the back of a US Food and Drug Administration (FDA) complete response letter (CRL) demanding more data, has pulled the plug on its rituximab program in the US.
“It will take at least five and perhaps 10 years before the real impact of dropping prices is felt, given that the approval of biosimilars is not fast enough, but it is coming,” Niazi warned.
The market therefore will be taken over by specialized biosimilar firms such as Samsung Bioepis and Coherus, both of which are already competing in the space. Samsung Bioepis, joint venture between Biogen and Samsung BioLogics has a Remicade (infliximab) biosimilar competing in the US and several others in Europe, while Coherus this week saw its version of Amgen’s Neulasta (pegfilgrastim) approved in the US.
And the traditional generic pharma firms are also lining up to make their mark. Teva, which has seen success with first wave biosimilars in Europe, is poised to enter the US market with the Celltrion developed Rituxan (rituximab) biosimilar CT-P10. Mylan, meanwhile, already has a Neulasta biosimilar approved in the US and claims to have 20 biosimilars and insulin analogs in its portfolio.
Big Pharma Responds
When Merck & Co. pulled its insulin glargine product it told this publication that it remained committed to biosimilars. Similarly, Sandoz, Pfizer and Amgen dismissed the idea of any looming exit from the space when contacted by BioProcess Insider.
“Pfizer is committed to biosimilars as an important treatment option for patients,” spokesperson Thomas Biegi said. “We are working hard on bringing our biosimilars to market and will continue our efforts to ensure patients around the world have access.”
Amgen’s Kelley Davenport added: “While we can’t comment on our strategy, with 10 biosimilars in our portfolio, Amgen remains committed to its biosimilars program.”
And Sandoz spokesperson Chris Lewis said his firm is both a “global pioneer and leader” in biosimilars and remains committed to the sector. However, he acknowledged that this is a challenging space and “only a handful of players will succeed globally in the mid to long term.”