Why Allergan is right and wrong about biosimilars
Róbert Wessman
"My Mission is to Improve People’s Lives" Róbert Wessman has founded industry-leading pharmaceutical companies. Founder/Chairman of Alvogen, Founder/Chairman Adalvo, Founder /CEO/Chairman of Alvotech & Chairman of Lotus
Allergan has been detailing its plans to pullback from the biosimilars market, suggesting that it’ll end up mirroring the generics market where some healthy early returns quickly fell away. Here’s the thing: Allergan has some valid concerns.
The biosimilars market will end up settling down into something that resembles the generics-drugs market, where a handful of companies dominate the space. For those that feel like they are not going to be able to compete, now is the time to fall away, as Allergan has suggested it will.
Speaking with Bloomberg, Brent Saunders, CEO of Allergan PLC, highlighted how the U.S. biosimilar market is fraught with uncertainty, with the FDA still undecided on how to regulate the drugs, while there’s a lot of patent and other litigation outstanding. It’s certainly hard to argue with that.
With biosimilars commanding lofty R&D, legal, and manufacturing costs, this puts those firms with big research, marketing and legal budgets at a significant advantage. They know it, too, with the likes of Samsung Biologics Co. Ltd having piled into the biosimilars market.
You need the full value-chain…
However, we knew what we were getting into. We know there’s a good chance that later entrants to the market will come in and slash prices to compete. That’s why you need to have full value chain, be able to develop fingerprint-like biogenerics (not biosimilars), and be on time at markets formation.
As we see it, product developed in a patent-free zone, produced at competitive cost, to the highest product quality possible, which are interchangeable in the US market, will be the winners going forward.
We are now starting to see many of the smaller players, who lack many of those capabilities, falling away. At the same time, big players like Merck and Allergan also seem to be leaving the scene.
Allergan is right to take a step back if it feels like it doesn’t have the right ingredients to compete. However, it is wrong to suggest that firms should just leave without attempting to develop the right ingredients to be able to flourish.
Handful of winners…
Remember that the genericization of biopharmaceuticals has only just started and that this ever-growing class of pharmaceutical products already today has a marked value of some 300B. Those handful of winners who have the right strategy and courage on execution are set to be rewarded handsomely.
GI, GU Cancer Lead Roche France (Squad Lead)
7 年Very interesting thoughts. Biosimilars adoption in European countries was driven by voluntarist policies at the national level, along with a great effort from the EMA to adapt the regulatory pathway for these drugs. It would be interesting to see how such policies could be implemented in the US. I suggest reading the following article as well: https://www.dhirubhai.net/pulse/european-biosimilar-market-tremendous-opportunity-access-b%C3%A9vierre/
Versatile life sciences leader | Technical | Commercial | Collaborative | Strategic. Anything posted here represents my views not those of my employer.
7 年The term patent-free is interesting. Is this real? Is Iceland patent-free?
Scientific Affairs Lead at -ODC Life Sciences- Biotechnology / Medical & Regulatory Affairs / Rare Diseases
8 年Handful of winners…? I guess so!
Managing Partner @ Lacerta Bio, specializing in consulting services for pharma business development. Also CEO @ Connexin Therapeutics Ltd., discovering & developing small molecules which protect and preserve vision.
8 年The idea that the biosimilars market will resemble the conventional generics market has been batted around for a decade now. We think this is not the case at all, largely because of what Robert is saying. It’s one thing to set up and validate a facility to crank out generic sildenafil and sell it on the open market, but it’s another matter to set up an entire manufacturing value chain to sell generic rituximab. Amgen is right that there will be relatively few competitors per biosimilar, but that is because there will be relatively few companies with the skills, capabilities, and resources to develop, manufacture, and distribute biosimilars. Flipping this around, will we wind up seeing mini-cartels in biogenerics, thereby seeing minimal price reductions and cost savings versus brands? Will prescribers be convinced that biosimilars are “the same” and hence prescribable? Will payers see a 5% cost difference and judge that it is not worth the risk? We’re at the early stages in the evolution of a new market. It’s too early to say for certain how this will all pan out. But it is clear that our industry and government needs to press forward with clarifying approval laws so that companies can move forward into this market.