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What’s the boggle with biologics?

If there is one fact that even the most casual observer of the pharma industry is aware of, it is that biologics are the leading growth engine of global medicines spending. Revenues from biologics increased by 70% during 2011–16 to reach $232bn, accounting for roughly 20–22% of total pharmaceutical spending [1].

Spending on biologics is also expected to continue to grow even when the impact of biosimilars is considered. For example, IQVIA has estimated that by 2023, US biologics spending will have reached $320bn, up from $165bn in 2017 [2].

The high costs associated with biologics have caused significant inequities in patient access. For instance, the high cost of insulin in the US is forcing patients with diabetes to ration their insulin, sometimes with devastating consequences [3]. Examples of poor patient access to biologics also exist in Europe. For example, substantial inequalities in the access to biologics for patients with Crohn’s disease have been found to exist in several European markets, including the affluent markets of France and Germany [4]. Similar access issues have been found in the treatment of patients with psoriasis [5] and rheumatoid arthritis [6].

Biosimilars offer governments and healthcare payers part of the solution to the ever-growing costs of treating patients with biologics. And the numbers speak for themselves. In Europe, for example, Medicines for Europe has estimated that since the introduction of the first biosimilar – Omnitrope (somatropin; Sandoz) – in 2006, biosimilars have generated savings of approximately €1.5bn ($1.7bn) in the five major EU markets of France, Germany, Italy, Spain, and the UK [7].

Future savings could be significantly higher. For example, in the US, early estimates from Express Scripts forecasted that using only two biosimilars – biosimilar filgrastim and biosimilar infliximab – could save the US health system $23bn by 2024 [8]. Should biosimilars for 11 of the highest-selling biologics be approved, including biosimilar versions of Herceptin (trastuzumab; Roche), Humira (adalimumab; AbbVie), and Avastin (bevacizumab; Roche), Express Scripts predicted these savings could reach $250bn over the same period.

Suffice to say there is significant commercial opportunity for biosimilar developers, supported by a desire across the globe to lower the costs of treating patients with biologics via the use of biosimilars. But what do biosimilar companies need to do in order to effectively commercialize their biosimilar brands?

What follows are some “rules of the road” for biosimilar developers focused on the key developed markets of Europe and the US. For more detailed insights, please refer to Datamonitor Healthcare’s recently published report, Biosimilar Commercial Strategies and Tactics.

Rule 1: always seek to understand what you’re going up against

A critical element of any biosimilar commercialization strategy is a deep understanding of the actual and potential barriers to biosimilar adoption, and ways to mitigate these barriers. Many barriers exist, including logistical, regulatory, commercial, competitive, and legal barriers, to name only a small handful. Commercial issues have become one of the most significant types of barrier in the US and have the potential to influence competitive dynamics today and in the future. For example, former US Food and Drug Administration (FDA) commissioner Scott Gottlieb has stated that “commercial impediments” could be responsible for slow market uptake of biosimilars in the US, citing rebates surrounding legacy products as one of the main commercial barriers that biosimilar companies face [9]. Informational barriers also present themselves as key barriers to the successful commercialization of biosimilars. When attendees at Medicines for Europe’s 17th annual Biosimilar Medicines Conference, held in Amsterdam in March 2019, were asked unprompted to identify what the biggest barrier to biosimilar competition is today, the single biggest issue identified was misinformation [10]. Biosimilar developers must be able to navigate the commercial nuances that exist across each key market, and deal with other important barriers like misinformation, if their commercial strategies are to be successful.

Rule 2: make sure multiple stakeholder groups are involved in defining your commercial strategy, and do it early
The strategic vision for any biosimilar needs to be defined as early as possible, and it is critical that the views and insights of multiple stakeholders are included. This includes technical, clinical, regulatory, and legal teams, as well as commercially focused stakeholders. These insights and views are crucial to assessing the prospective biosimilar’s position from all perspectives, such as the intellectual property position, the extent of clinical studies required for regulatory approval, specific needs of customers, and the quality and supply of the final product when launched. And while the timing of commercial strategy development will vary from company to company, commercial planning must begin as soon as possible. Depending on the company type, this could be in early-stage clinical development for fully integrated companies (eg Amgen, Pfizer, etc), or as soon as licensing deals have been signed (eg for distributors such as Mundipharma).

Rule 3: base tactical decisions on what’s worked in the past, but always make sure you consider current and future relevance
As Chinese military strategist Sun Tzu wrote in The Art of War, “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat” [11]. Having a strategy is one thing, but if you do not have tactics things can unravel quickly. Fundamentally, the mix of developmental and commercial tactics that companies decide to implement as part of a biosimilar brand’s commercialization strategy needs to be customized to the type of product being developed, its target indication, patient type, and the country in which the product is to be sold. Companies must also consider relevance; what has worked in the past might not be suitable for the current (and future) situation. Like the clinical development of a biosimilar, there can be no “one-size-fits-all” commercial strategy. It is also important to note that while commercial tactics tend to be quicker, cheaper, and more responsive to market change compared to developmental tactics, the overall aim of both approaches is the same: to drive differentiation in the eyes of end users, such as patients, physicians, and payers, so that the company’s brand is used preferentially ahead of other options [12].

Rule 4: continue to educate, even when you don’t think you need to
Since the dawn of the biosimilars industry there has been a steady supply of key stakeholder educational materials, including materials for physicians, payers, and patients [13] [14] [15]. Notwithstanding all this available material, certain stakeholder groups are calling for more. For example, oncologists in Europe have demanded more education on the use of biosimilars [16]. Other physician groups are also likely to seek clear, informative, and engaging educational materials as new biosimilars come to market. For example, companies like Formycon will need to provide educational materials to ophthalmologists to support the introduction of its biosimilar versions of Lucentis (ranibizumab; Roche/Novartis) and Eylea (aflibercept; Sanofi/Regeneron), both of which are expected to be launched in Europe and the US over the next few years. The message is clear; biosimilars companies must educate all key stakeholder groups on biosimilars and continue to do so as part of a long-term investment in driving up biosimilar adoption rates.

Rule 5: put sustainability at the heart of all you do

When Orion Pharma offered its infliximab biosimilar to the Norwegian Health Service at a discount of close to 70% compared to Janssen’s Remicade, it created a new set of expectations in terms of biosimilar pricing [17]. Big discounts became the new norm, and if companies were not prepared to live up to that they came up against barriers quickly. Before this happened, discounts of between 20–40% were expected, such was the belief that no company could make any profit by offering generic-like discounts. Serious questions are now being asked about the impact of massive discounting from biosimilar manufacturers on the longer-term sustainability of the biosimilars market. While deep discounting has supported robust biosimilar adoption rates, many are now concerned that if this continues, competition in the future will be limited to only a select few companies that have the financial power to remain. Perhaps ironically, it is national payers, regulators, and policymakers, not biosimilars companies themselves, which hold much of the power to influence the longer-term sustainability of the biosimilars market. Future-focused procurement strategies are now being seen in some key European markets (eg for Humira biosimilars in the UK), so it is now over to the biosimilar companies themselves to support this longer-term perspective and help shape the next wave of biosimilars for future generations.

Conclusion
The commercial landscape for biosimilars is constantly evolving. More emphasis is now being placed on sustainability than winning at all costs and any price. And with this comes a need for biosimilar companies to adopt commercial strategies that are flexible, agile, and future-focused.

References
[1]    IQVIA (2017) Disruption and maturity: The next phase of biologics. Available from: https://www.iqvia.com/-/media/iqvia/pdfs/nemea/uk/disruption_and_maturity_the_next_phase_of_biologics.pdf [Accessed 24 May 2019].
[2]    IQVIA (2019) The Global Use of Medicine in 2019 and Outlook to 2023. Available from: https://www.iqvia.com/-/media/iqvia/pdfs/institute-reports/the-global-use-of-medicine-in-2019-and-outlook-to-2023.pdf [Accessed 24 May 2019].
[3]    BBC (2019) The human cost of insulin in America. Available from: https://www.bbc.co.uk/news/world-us-canada-47491964 [Accessed 24 May 2019].
[4]    Péntek, M., Lakatos, P. L., Oorsprong, T., Gulácsi, L., Pavlova, M., Groot, W., ... & Group, C. S. D. R. (2017). Access to biologicals in Crohn’s disease in ten European countries. World Journal of Gastroenterology, 23(34), 6294.
[5]    Naldi, L., Cazzaniga, S., Di Mercurio, M., Grossi, E., Addis, A., & Psocare study centres. (2017). Inequalities in access to biological treatments for psoriasis: results from the Italian Psocare registry. British Journal of Dermatology, 176(5), 1331-1338.
[6]    Kaló, Z., Vokó, Z., Östör, A., Clifton-Brown, E., Vasilescu, R., Battersby, A., & Gibson, E. (2017). Patient access to reimbursed biological disease-modifying antirheumatic drugs in the European region. Journal of Market Access & Health Policy, 5(1), 1345580.
[7]    Medicines for Europe (2017) Medicines for Europe Country Specific Market Access Policies. Available from: https://www.medicinesforeurope.com/wp-content/uploads/2018/05/20180524-Medicines-for-Europe-recommendations_V1.0.pdf [Accessed 24 May 2019].
[8]    Express Scripts (2014) Infographic: Two Biosimilars to Save $22.7 Billion. Available from: http://lab.express-scripts.com/lab/insights/drug-options/infographic-two-biosimilars-to-save-227-billion [Accessed 24 May 2019].
[9]    The Center for Biosimilars (2019) FDA's Scott Gottlieb, MD, Highlights Biosimilars Initiatives in J.P. Morgan Keynote Address. Available from: https://www.centerforbiosimilars.com/conferences/jp-morgan-2019/fdas-scott-gottlieb-md-highlights-biosimilars-initiatives-in-jp-morgan-keynote-address [Accessed 24 May 2019].
[10]    Center for Biosimilars (2019) Center for Biosimilars tweet on 28 March. Available from: https://twitter.com/BiosimCenter/status/1111202833263525888 [Accessed 24 May 2019]
[11]    Tzu, S. (2012). Sun Tzu Art of War. Vij Books India Pvt Ltd.
[12]    Ellery, T., & Hansen, N. (2012). Pharmaceutical lifecycle management: making the most of each and every brand. John Wiley & Sons.
[13]    Biosimilars Council (2019) Council resources on biosimilars. Available from: https://biosimilarscouncil.org/resources/ [Accessed 24 May 2019].
[14]    EMA (2018) Improving understanding of biosimilars in the EU. Available from: https://www.ema.europa.eu/en/news/improving-understanding-biosimilars-eu [Accessed 24 May 2019].
[15]    FDA (2019) Patient and Prescriber Outreach Materials on Biosimilars. Available from: https://www.fda.gov/drugs/developmentapprovalprocess/howdrugsaredevelopedandapproved/approvalapplications/therapeuticbiologicapplications/biosimilars/ucm580435.htm [Accessed 24 May 2019].
[16]    ESMO (2018) Oncologists demand more education on the use of biosimilars: ESMO takes action. Available from: https://www.esmo.org/Press-Office/Press-Releases/oncologists-education-biosimilars [Accessed 24 May 2019].
[17]    Biopharma Reporter (2015) Biosimilar discounts and switching will wipe out J&J’s Remicade in Norway, says regulator. Available from: https://www.biopharma-reporter.com/Article/2015/10/16/Biosimilar-discounts-will-wipe-out-Janssen-s-Remicade-sales-in-Norway [Accessed 24 May 2019].

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