Typically, it takes between seven and 10 years for biosimilar medicines to be developed – this is because they are complex molecules to develop and manufacture and there are there are intricate and costly regulatory requirements to meet before products can be commercialised.
Given the long lead time, it seems likely that, at least in some of the examples IQVIA highlighted, there will be no biosimilar rival to biologics available on the market when those originator products reach LoE.
IQVIA has estimated that the biosimilars void could cost a minimum of circa €15 billion in lost savings for payers, which it says is approximately 25% of the total loss of exclusivity opportunity, by 2032.
IQVIA said: “With fewer entrants into the market, competition between the originators and biosimilar medicines could resemble competition between brand-name medicines, with fewer products, and a reduction in price discounts. Failure to address the barriers to the challenges of biosimilar development is likely to increase the financial burden of European healthcare systems while reducing their impact to improve patient access.”
Regulatory and procurement barriers
There is no single solution that will help address the biosimilars void. The issues that we highlighted in the aftermath of the Festival of Biologics last year remain valid.
For example, while a paper issued by the European Medicines Agency (EMA) in November 2023 that suggested that a relaxation of regulatory requirements around expensive comparative efficacy trials is under consideration, there has been no formal change in policy to-date.
The EMA, like many other regulators – including the US Food and Drugs Administration – requires comprehensive scientific comparative efficacy studies to be carried out by biosimilar manufacturers to evidence ‘biosimilarity’ between their product and the originator biologic their product is based on, so as to obtain a marketing authorisation of their own. This entails conducting expensive and time-consuming clinical trials with patients.
The EMA is out-of-step with the UK’s Medicines and Healthcare Regulatory Authority (MHRA) in respect of its approach to comparative efficacy trials, with the MHRA having updated its guidance in 2021 to state that a comparative efficacy trial may not be necessary in most cases if sound scientific rationale supports this approach. That move allows biosimilar manufacturers to rely more heavily on comparative analytical and functional data as well as what is known from clinical experience and quality attributes of the originator biologics product, to meet their regulatory requirements.
The EMA consulted on plans to adopt a more tailored approach to the need for clinical efficacy trials earlier this year. That consultation closed on 30 April 2024 and Out-Law has asked the EMA for an update on the initiative.
In addition to regulatory barriers, there also remain challenges with the procurement models in some European markets – a ‘winner takes all’ procurement is popular in some countries but, for manufacturers, this can affect their appetite to invest in developing new biosimilars – they need sufficient guarantees that there will be enough take-up of their products to justify the investment needed for development, and a procurement model that offers only one product manufacturer a route to a country’s market is viewed negatively in this respect by some within industry. That again was reflected in discussions at the Festival of Biologics this year.
Engaging with payers over product pipelines and budgets
One of the other challenges to bringing biosimilars to market is the short-term nature of budgeting by payers.
In UK terms, it is common for members of the business team within biosimilar manufacturers to be in regular contact with NHS representatives over pricing and reimbursement and to gauge what future tenders will be coming up.
Currently, pipelines are being discussed by payers only up to a couple of years ahead. While this is sufficient notice for those who might develop generic medicines to compete with small molecule originator products, a much longer-term view needs to be taken in respect of the need for biosimilar medicines given their much longer lead times for development.
The challenge for the biosimilars industry is to convince payers – and government policymakers who sit behind them – to shift to long-term budgeting so that they can move away from adopting transitory positions that offer insufficient certainty for biosimilars development.
Getting to that position would represent a step-change in approach by payers and help them achieve longer term savings in the procurement of medicines – and follow through on supportive rhetoric and policies – like the stated ambition for the NHS in England to enable 80% penetration of biosimilars into product markets.
Opportunities for biosimilar manufacturers
While there are challenges in making out a business case for biosimilar products, those in the market could see the potential biosimilars void as an opportunity. According to IQVIA data, there are 27% of the “high-sales” biologic candidates without biosimilars in development. Given the economic success of a biosimilar will depend in part on the calculation of how much competition the product will face, these medicines provide a unique opening.
For those biologics in the “low-sales” bracket, if companies can lobby for regulators to remove the expensive comparative efficacy trials and deepen their discussions with payers to look at a longer horizon scan for products, these may become viable candidates for production.
It is imperative that industry is able to develop these competitor molecules, in order to bring savings to struggling healthcare systems and ultimately to enable wider access to these life-changing products.
