EPIRUS Biopharmaceuticals: What Biosimilars Can Learn From The Generics Market

By Anna Rose Welch, Editorial & Community Director, Advancing RNA

Since Zarxio was approved in the U.S. in 2015, pharma has been focused on the growth of the U.S. regulatory pathway and market. For Amit Munshi, CEO of pure-play biosimilar company EPIRUS Biopharmaceuticals, biosimilars are “the news of the day. It’s what everyone wants to talk about.” The approval of the first biosimilar in the U.S. certainly holds great promise for more affordable healthcare and for patients. But when it comes to building a biosimilar business, Munshi says focusing on the evolution of the generics market could hold some important clues for pharma about how the burgeoning biosimilar market will play out.

Biosimilars Vs. Generics: Will History Repeat Itself?

As the biosimilar market takes shape in Europe and in the U.S., one big challenge for the industry is how to define the biosimilar. Biosimilars are cheaper versions of costly brand-name biologics. They are being heralded as the answer to rising healthcare costs, much like small molecule generics were when they first entered the market. But one notable struggle in the industry is to ensure that patients, doctors, and payers are aware of the different, more rigorous pathway to approval for a biosimilar vs. a generic. As such, biosimilars should not be considered “generic” at all.

Because so much emphasis is being placed on differentiating biosimilars from generics, it might seem contradictory to make comparisons between the two markets. However, Munshi sees some valuable lessons for those exploring biosimilar development within the history of the small molecule generics market — especially when it comes to the pacing of market development. Obviously, in the face of rising biologics prices, the demand for more cost-effective treatment options is high. However, Munshi doesn’t expect the biosimilar market to evolve overnight, especially when considering the length of time it took for the generics market to become established.

“Hatch-Waxman was passed in 1984,” says Munshi. “According to the Generic Pharmaceutical Association (GPhA), it wasn’t until about twenty years later, after amendments and dozens of lawsuits establishing legal precedents, before the generic substitution rate reached 50 percent.”

Companies attempting to launch biosimilars in the U.S. have already begun facing legal challenges, beginning with the Amgen v. Sandoz case involving Zarxio. Though many of the questions in that case have been resolved, other questions remain about the Biologics Price Competition and Innovation Act (BPCIA). For instance, should a company that has provided the reference product sponsor with its abbreviated Biologics License Application (aBLA) have its biosimilar delayed from market for 180-days following approval? A district court recently took a crack at this question in Amgen v. Apotex, but that decision is now on appeal.

In fact, Munshi compares biosimilar and generics legislation, suggesting we can gain some clues about how quickly biosimilars will enter the market. For instance, according to the GPhA, in the first year of the Hatch-Waxman Act, the FDA received more than 1,000 applications for new generics. In 1992, nearly ten years later, an additional act was implemented requiring more scientific rigor from generic manufacturers. In other words, despite the fact generics had far more legislative infrastructure, it was still almost 10 years after Hatch-Waxman’s initial passage before there was an act clarifying requirements, and another ten years before a more significant impact from generics was seen, Munshi says. “[Biosimilar legislation] didn’t go as far as Hatch-Waxman,” according to Munshi. “There are still many guidelines and clarifications expected, which has left many questions unanswered.” He doesn’t expect it will take 10 years to answer all these questions. There is both the precedent set from Hatch-Waxman and the fact that biosimilars have been available outside of the U.S. for ten years. As more biosimilars come to the surface, the legal challenges that arise will help establish answers more quickly for some of these lingering questions. However, navigating the legal system will not be a cheap endeavor for those involved.  

Will Biosimilar Pricing Be A “Race To The Bottom”?

The pricing of biosimilars compared to that of traditional generic drugs has been another point of discussion in the industry. So far, many experts throughout the industry are arguing biosimilar pricing will be very different than that of small molecule generics. Several years ago, the Federal Trade Commission (FTC) predicted that biosimilars would only be discounted by 15 to 30 percent of the reference drug’s price — much lower when compared to approximately a 70 percent discount for generic drugs. In fact, in a recent article from Bloomberg BNA, the FTC argued that competition between biosimilars and biologics would resemble brand v. brand competition, rather than brand v. generic competition. Seeing as Zarxio hit the U.S. market with a 15 percent discount, the FTC was right on the mark in its predictions for the market.

Because of the cost and complexity of the biosimilar manufacturing process, Munshi agrees it won’t be a race to the bottom like it was for generics. But he does expect that biosimilar uptake will resemble that of small molecule generics over time. When small molecule generics were first introduced, there was hesitance about the quality and efficacy, much like pharma is encountering today with biosimilars. It took education to ensure doctors, payers, and patients would be more comfortable with generics. And it took experience prescribing and treating patients with generics before generics became a standard treatment option.

Munshi expects this “pattern to repeat itself at a different cadence” for biosimilars. With education, however, doctors will make the switch, especially if based on a record of more and more biosimilars on the market. As biosimilars’ efficacy and safety is observed, the “biosimilar floodgates will start opening slowly.” This is not to say that the markets will be mirror images of each other. As Munshi says, “The biosimilar market might not evolve in the exact same way as small molecule generics, but these experiences with generics give you enough clues as to how this market might evolve over time.”