This from the PharmTech blog. I want to focus on cooments by the first speaker in the post, Neil Mahoney, President & CEO of Global Pharma Alliance. His talk indicated that it would be much more difficult to produce a biosimilar than for a generic small molecule - which is clearly true -- but he also cited a cost of $100-$200 M to develop a follow on biologic. Wow!
I think that figure has to be looked at with skepticism and if true would only apply to a US market. But we have a GLOBAL pharma industry now. Estimates from Dr. Reddy's lab indicate that a western company could expect to spend $50-$100 M to develop a biosimilar (half the figure cited above) -- but also than an Indian company could expect to do this for only $10-$20 M. Additionally, India can be expected to offer the products at 25-40% less.
Dr. Mahoney also trots out data that says the initial biosimilars lanched in Europe did not exactly take the market by storn in terms of share -- also true. But to suggest that this trend will hold up going forward is folly I think. The first round of biosimilars were drugs like EPO which were not nearly as costly to use as the next round of mAbs to treat things like RA or cancer. Given the current health crisis, and government austerity programs, I cannot doubt that there will be incentives in place to encourage development and approval of biosimilars throughout the world -- yes -- even in the US. Moreover, as more of the mainline pharma companies like Pfizer, Merck, Novartis (Sandoz) etc start pushing biosimilars, I expect the adoption rates to increase and the price erosion to accelerate.
While biosimilars will require more investment and skill than small molecule generics, I don't think that is insurmountable. Economics and healthcare policy will drive their existence. It is only a matter of time in miy mind and that time will be quicker than a lot of naysayers believe. I think any thought to the contrary is wishful thinking and amounts to "whistling past the graveyard".
Posted by Bruce Lehr Mar 16th 2012.