Manufacturers of branded biologic drugs are likely to be the same ones making biosimilar drugs, at least initially, Actavis CEO Claudio Albrecht said. After a regulatory path for biosimilars has been well-established, large generic-drug makers could dominate the market, he said.
The major developers of branded drugs have emerged as unexpected competitors for generics makers such as Actavis, being taken over by Watson Pharmaceuticals Inc, as innovators discover a market for themselves in these so-called biosimilars.
The generic drugs industry, where Watson says it will rank third by sales after the tie-up, is for now enjoying rapid growth as best sellers such as Sanofi SA’s Lovenox or Pfizer Inc’s Lipitor go off patent.
But fewer top-selling conventional chemical drugs will lose patent protection after 2014 and Actavis CEO Claudio Albrecht sees the pharma industry turning its attention to biosimilar versions of complex biotech drugs.
There are still considerable challenges to overcome, though, as the benefits and side effects of biosimilars can differ slightly from the products on which they were modeled so regulators and physicians so far do not view them as interchangeable with the originals.
“Biosimilars will have to be advertised and explained. That would be something relatively new to the generics industry,” Albrecht told Reuters. “We will have to learn again to generate prescriptions.”
Major developers of branded drugs already have a sales force in touch with doctors and also have more expertise in developing and manufacturing biotech drugs, said Albrecht, regardless of whether they are originals or copies.
They also have more experience in dealing with regulators for drug approvals, where there are no hard-and-fast rules for biosimilars yet, said the CEO, who will leave Actavis once the merger with Watson is completed next month.
Traditional pharma innovators like Pfizer, Amgen Inc, Merck & Co Inc and Biogen Idec Inc are already working to produce rival versions of biotech drugs made by competitors.
But once a standard regulatory path to the market is in place in about five to 10 years, cutting production and logistics costs will become the driver of the industry, and large generics companies like Teva Pharmaceutical Industries Inc, Mylan Inc and Watson will regain the upper hand, according to Albrecht.
Originators, in turn, were ill-placed to compete on price, he said. “It’s like a club and ruining each other’s prices is not really what they want to do.”
The industry is awaiting guidance from the U.S. Food and Drug Administration on approval of biosimilar drugs, but European regulators have already cleared cheaper copies of some biotech medicines.
Editor’s note: It is clear the Actavis’ CEO is mainly targeting US market with his words in this Reuters news story. There are several markets in Europe and also around the world, which already got used to biosimilars. And from our point of view, in the year 2012, it is a bit late to say that “biosimilars will have to be advertised and explained.”
This is what the biosimilars industry is doing since several years around the world and will keep on doing in the US once the FDA approvals will come one after another.