Biosimilars: Market Insights and Growth Factors

By Sean McGowan; Rick Lozano

How to ensure the promise of biosimilars becomes a reality.

Biosimilars present a breakthrough opportunity to reduce healthcare costs and provide patients with greater access to more affordable treatments. Adoption of these products has the potential to improve adherence and lead to better health outcomes. But these benefits hinge on healthy competition and market growth.

Here, we examine the state of the biosimilars market and its trajectory. We'll explore why biosimilar commercialization has been slow to date, along with a few factors that could influence future growth and how manufacturers can ensure their therapies thrive.

A biosimilars market snapshot

While the biosimilars market has been slow to mature, there is evidence that it will continue to steadily expand. Since the first FDA approval in 2013, there have been 23 biosimilar approvals to date, but only nine launches. The market experienced a boom in 2018 and 2019, with 14 FDA approvals, but market share in the U.S. still remains minimal, representing under two percent of overall biologic spending. However, according to a 2019 IQVIA report, "biosimilar share of the accessible market has generally been rising, and now averages 31%."

Factors that have stunted biosimilar growth include limited distribution models, litigation, the legislative landscape and misperceptions about efficacy and safety.  But even though biosimilars haven't yet made a significant dent in originator market share, opportunity abounds as providers become more familiar with these products and the payer environment evolves. In fact, savvy manufacturers can turn hurdles into opportunities with the right channel strategy, reimbursement support and provider education.

The biologics landscape is changing

Despite the slow initial growth of biosimilars, the biologic market is poised for increased competition. Over the next five years, many originator brands will lose patent exclusivity. This trend is expected to generate $78 billion in savings over the same period, and as much as $150 billion by 2026. Manufacturers have a significant opportunity to deliver on the promise of biosimilars with smart commercialization strategies.

Factors that will contribute to increased market share

As the biologics market evolves, manufacturers should consider a number of factors that will likely result in increased market share for biosimilars:

  1. Eight new biosimilars are expected to launch before the end of 2020. This potentially doubles the number of biosimilar therapies available to patients, increasing competition in the market. Consider, for example, the potential market size — and the number of potential competitors — for current innovator products.
  2. Unlike innovator products, which are only available via specialty distribution, many new biosimilars will be available across all distribution channels, including full-line, wholesale distribution. For manufacturers, expanded access to biosimilars at some sites of care represents a potentially untapped market in the hospital and health system space. Innovators, on the other hand, will need to reassess channel strategies to enable access in those markets.
  3. Payers and pharmacy benefit managers (PBMs) are continuing to evolve their coverage strategies. This can be both good news and bad news for biosimilar manufacturers. One national payer, for example, has required that patients "fail" on a biosimilar before covering the originator product. Another national payer favors an originator product over a biosimilar on its formulary.
  4. The FDA has issued its long-awaited guidance on biosimilar interchangeability. As expressed in the FDA Guidance Document, biosimilars may be substituted for originator biologic therapies without the intervention or sign-off of the prescribing healthcare provider. This clears a path for increased biosimilar development, access and competition—ultimately, creating a level playing field for biosimilars.

Key strategies to ensure market success

As manufacturers prepare commercialization strategies, a number of approaches can help their products thrive.

Provider education and support will be critical for overcoming initial adoption barriers. Ask yourself: Does your provider population understand the benefits of your product? Do they need advanced education? Do they need reimbursement support?

Channel strategy will be a differentiator as new biosimilars come to market. Ensure your product is available wherever patients are presenting for treatment. Does your  distribution partner have relationships into the specialties you want to reach?

Finally, heed legislative developments and evolving payer strategies that could impact product uptake. For example, manufacturers should consider the potential access and affordability challenges facing patients and design right-sized patient support services.

Biosimilar products present a unique opportunity for manufacturers to address accessibility and affordability issues that both patients and their healthcare providers  face today—but only if the market thrives. The right product commercialization strategy, combined with the right approach to payers and providers and the right support from policy makers, is the right formula for market growth.

About the Authors

Sean McGowan

Senior Director, Biosimilars
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Rick Lozano

Vice President of Biosimilars and Integrated Business Development
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