'Blockbuster Biosimilar'-will that happen?
- $200bn+ worldwide revenue of Biologics in 2016
- 42 innovator biologics drugs were blockbusters ($1bn+) in 2016
- $20bn-much anticipated mark,the biggest biotech product can do in near future
It was in September 1984, when Hatch-Waxman Act was signed into a law in US, which in turn created the regulatory framework and a conducive ecosystem. This milestone event spurted the growth of generic industry for next couple of decades which in return saved $1.67trillion in just last decade and $253billion savings to taxpayer’s money in US in just one year (2016). So much has changed in past three decades, regulations have been tested many times, updated and interpreted in different ways on many occasions. Over this period generic Industry became more competent in all aspects of business be it science, marketing or legal, as well as more aggressive in challenging innovator patents. In the meanwhile, when the Pharma industry itself was going through changes from chemistry based small molecules to biotech based large molecules, it was obvious for generic players to find a way to come up with more complex follow on versions of these products.
Repeating the history, 2010 was the year when regulators opened the door for Biosimilars to Biologics in US and paved way for affordable versions of biologics by giving the guidelines to the industry. In the meanwhile, the Pharma world saw the blockbuster title being taken by numerous drugs in past 20 years and a few unprecedented ones such as Lipitor which almost touched an unheard of $8bn mark in US alone in 2011. However, this never gave an idea to the analysts covering Pharma industry, that the term ‘Blockbuster’ can be someday a possibility for a generic drug too, because generics of even the numero-uno Lipitor could not touch the magical $1bn mark.
However, it seems that ‘Blockbuster Biosimilar’ would not remain an oxymoron in near future, for two reasons both related to the same drug called- Humira from AbbVie : 1. Humira crossed $10bn mark in US sales in 2016, growing 24% YoY (details here) and 2. Abbvie was able to settle a deal with Amgen delaying the launch of Humira Biosimilar in US until 2023 [in case you missed it here is the link]
Both of these reasons, coupled with the widely accepted entry barrier and lesser price erosion in Biosimilars compared to traditional generics, indicates that generic entrants may look at a target market size of around $14-15bn of US revenue of Humira. If one assumes that after recent settlement between Amgen & Abbvie, other than Amgen and Boehringer Ingelheim, potentially two more players shall be ready for the launch by 2023. With the biggest Biosimilar entrant enjoying a conservative 20% market share with a deep discount of 40% (although unlikely), should end up racking over a billion dollar from US alone. By then, ex-US market would have seen a good 3-4 years of run with Biosimilar players (starting Oct’18 in EU), and further multiple launches in semi-regulated emerging markets – which shall translate into an opportunity worth maximum of 50% of 2018’s number by 2022, and it is unlikely that any single player will have more than 10% market share of that generic pie out of total addressable market(ex-US) due to tough competition from local EM players.
All of this put together, makes a strong case where any player who has approvals in US, EU (at present Amgen, BI) shall have a great opportunity to win the tag of blockbuster Biosimilar during initial years of launch. Amidst all of this, one executive who must be really between a rock and a hard place is Boehringer Ingelheim’s top honcho, who is sitting with an approved blockbuster product and has a question of not launching it soon and let go the earnings, or settling the case at any cost, or may be take the plunge.
Out of many questions about litigation,biosimilar's uptake,pricing and so on , an interesting question remains unanswered in this scenario, that if this becomes a blockbuster, “will this be the only Blockbuster Biosimilar in the history of generic Pharma world” …..and the clue to the answer lies with two upcoming kids from BMS and Roche (one each)…….anybody wants to guess ?