1. Demand for biosimilars in emerging markets
Biosimilars are biological products that are similar in structure and function to already approved medications. With a much shorter regulatory pathway and fewer R&D costs, they can be significantly cheaper than the original, brand-name biologic. This makes them a particularly attractive option for low- and lower-middle-income countries seeking pharmaceutical products, says Gupta and Boulais.
As expected, biosimilars are gaining popularity worldwide, with sales expected to more than double to US$15bn by 2025, according to a report from management consulting firm, McKinsey & Company. Roughly US$5-8bn of those sales are expected to come from emerging markets, they noted.
While these biologics are in great demand, producing such drugs presents unique challenges that threaten the manufacturers’ capacity to produce them in a cost-effective manner. The first challenge is competition: The industry is developing biosimilars for just 10 to 15 biologics. As a result, companies that do not reach the market first will struggle to gain any share of the profits. Biosimilar manufacturers also face additional pressure from the producers of the original biologics, which are streamlining their workflows and reducing the cost of their own products, making them even harder to undercut.
The main barrier to success is the cost of goods sold, highlight Gupta and Boulais. "Biosimilar developers must spend time and money proving their molecule’s biosimilarity to their corresponding reference products to achieve approval. And although their ultimate goal might be to sell to emerging markets, they must also achieve approval in the US and EU. This adds to the cost of developing a biologic. The most effective way to make biosimilars worth the investment is to reduce the cost of production," said the Sartorius team.