Biosimilars once promised a brave new world of competition and significantly lower prices for aging biologic drugs. But it hasn’t quite happened as planned.
In his quarterly look at the performance and outlook of biosimilars, Bernstein analyst Ronny Gal said that while it may not appear obvious on the surface, biosims have been a moderating force on drug prices. Looking forward, the market is set for a growth phase thanks to some high-profile copycat launches.
“The winner here is the customers, who saved an estimated $8.8 billion” annualized, Gal wrote to clients. “It is time to put to bed the argument that biosimilars do not provide enough system savings—a better question is ‘Who keeps the savings?’”
While the U.S. biosims market was slow to take off, over the last three quarters, it has reached about $4 billion annualized, Gal wrote. Throughout the market, volume gains have been offset by sharper pricing declines. What once was an overall reduction in prices of around 10% has become a 20% drop, Gal says.
“This has been the result of ongoing launches of late entrants, forcing early entrant prices down and enhanced competition from innovators, who are all now discounting in competition,” Gal wrote.
One example is Pfizer's first-to-market Remicade biosimilar Inflectra. At launch, Pfizer rolled out Inflectra with a 15% discount to the Johnson & Johnson brand. Merck later launched its version at a 35% discount, escalating the competition.
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Still, sales figures show that J&J's brand is still the dominant force on the market. Remicade generated $3.7 billion last year, compared with $659 million for Inflectra. Merck didn't break out Renflexis or biosimilar sales for 2020.
Separate from that market battle, Mylan in 2018 launched its biosim of Amgen's Neulasta at a 33% discount, again showcasing the steep discounts offered by some biosims.
Looking forward, Bernstein sees modest growth ahead in the U.S. biosims market with the launches of biosimilars for Roche’s macular degeneration drug Lucentis late this year and AbbVie’s versatile immunology superstar Humira in 2023. While Gal expects overall biosimilar market gains to be tempered as older drugs fade, he figures there's another "decade of growth" ahead.
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Regarding a few of the big players in biosimilars, Bernstein sees short-term gains ahead for Pfizer with its versions of Johnson & Johnson’s Remicade and Roche’s Avastin. Amgen will sag in the short term but will be ready to take advantage in 2023 with a biosimilar for Humira. Bernstein believes stagnant Viatris needs a change of strategy. As for Teva, much will depend on its partnership with Alvotech, Gal wrote.