Biosimilar developers are targeting blockbuster “Big Pharma” biologic originator companies. Roche and AbbVie, two companies most susceptible to biosimilar erosion, have vocalized a need for stringent regulatory frameworks — calling for appropriate data, individualized labels, and unique identification for all biotherapeutics — while attempting to rebuff competition by reformulating their products and beefing up both their pipelines and intellectual property (IP). Meanwhile, several other Big Pharma companies are dominating European and US biosimilar markets: namely, Novartis, Pfizer, and Amgen, which claim some of the largest biosimilar pipelines in the industry.

Through its Sandoz division, Novartis has been marketing biosimilars in Europe for over a decade. It was first to launch a US biosimilar when its version of Neupogen (filgrastim), received approval in 2015. Pfizer has had four US approvals, including the first biosimilar version of J&J’s Remicade (infliximab). The company expanded its biosimilar pipeline in 2015 through a $17 billion ( €14.9 billion) acquisition of Hospira. And despite suffering revenue loss from an influx of first-wave biosimilars while trying to defend against versions of bestselling biologic Enbrel (etanercept), Amgen has 10 biosimilars in a portfolio that includes US-approved versions of AbbVie’s Humira (adalimumab) and Roche’s Avastin (bevacizumab).

History Repeating: Even so, Big Pharma’s interest in biosimilars may be soon to end, according to Sarfaraz Niazi, a pharmaceutical sciences and biotechnology expert with over 30 years of industry experience who founded biosimilar developer Karyo Biologics earlier this year. In his 2014 book Handbook of Biogeneric Therapeutic Proteins, he predicted that exit would occur once specialized biosimilar developers have appeared on the scene.

“This is history repeating from the generics era,” he said. “There are so many ways to cut the cost of development and manufacture, but because of their mindset and design, Big Pharma cannot do this. They can change both, but that requires a monumental shift.”

Niazi told BioProcess Insider that back in the 1980s, many large pharmaceutical companies planned to enter the generics market. “However, as the prices tanked, they all pulled out.” So far, the big companies are seeing much bigger profits from biosimilars than are sustainable, Niazi argued. “Once prices fall to below 60% of the current prices, it will no longer be feasible for the Amgens and Pfizers to stay in this market for long.”

He says their exit will accelerate when other companies from overseas bring forth products at substantially lowered costs. “Every MAb, regardless of its use, costs about $150–200/g. This price will drop by another 50% once the Indian and Chinese companies start getting approvals; at this stage, prescribers will become redundant and payers will take over.”

Biosimilar Exit? When asked for examples, Niazi cited Merck KGaA’s 2017 divestiture of its biosimilars business to Fresenius for an upfront payment of €170 million ($195 million). Last month “the other Merck” — Merck & Co. (known as MSD outside North America — dropped its Lantus (insulin glargine) biosimilar program after assessing its pricing and costs of production. And recently Sandoz, after a US Food and Drug Administration (FDA) complete response letter (CRL) demanding more data, has pulled the plug on its US rituximab program.

“It will take at least five and perhaps 10 years before the real impact of dropping prices is felt,” Niazi warned, “given that the approval of biosimilars is not fast enough, but it is coming.” He predicts that specialized biosimilar companies such as Samsung Bioepis and Coherus, both of which are already competing in the space, will take over as Big Pharma backs out. A joint venture between Biogen and Samsung BioLogics, Bioepis has a Remicade (infliximab) biosimilar competing in the United States and several other such products in Europe. And Coherus recently won US approval for its version of Amgen’s Neulasta (pegfilgrastim).

Meanwhile, the traditional generic drug companies also are lining up to take their place: Teva, which has seen success with first-wave biosimilars in Europe, is poised to enter the US market with a Celltrion-developed Rituxan (rituximab) biosimilar. Mylan already has a Neulasta biosimilar approved in the United States and boasts another 20 biosimilars and insulin analogs in its portfolio.

Economy of scale at Sandoz

Big Pharma Responds: When Merck & Co. pulled its insulin glargine product, it told BioProcess Insider that it remained committed to biosimilars. Sandoz, Pfizer, and Amgen also have dismissed the idea of any looming exit from the space.

“Pfizer is committed to biosimilars as an important treatment option for patients,” spokesperson Thomas Biegi said. “We are working hard on bringing our biosimilars to market and will continue our efforts to ensure that patients around the world have access.”

Amgen’s Kelley Davenport added: “While we can’t comment on our strategy, with 10 biosimilars in our portfolio, Amgen remains committed to its biosimilars program.”

Sandoz spokesperson Chris Lewis said his company is a “global pioneer and leader” in biosimilars and remains committed to the sector. However, he acknowledged that this is a challenging space in which “only a handful of players will succeed globally in the mid to long term.”