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Originators and Princeps: How to face Biosimilars and Generics

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Concerning the levers a originators producer can put in place to face the biosimilars competition and maintain his position, benchmarking on biosimilars, generics (13 companies from 2000 to 2015) and the results of our interview allow us to observe 10 levers:

 Price  Prescription
 Patent  Market saturation
 Legal action  New market
 Cooperation  Environmental strategy
 Product  Brand strategy






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Originators and Princeps: How to face Biosimilars and Generics

  1. 1. 1 Originators OR Princeps -------------------- How to face Biosimilars and Generics Joseph Pategou International Strategy and Influence joseph.pategou@skema.edu
  2. 2. 23/05/2016 Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou 2 SUMMARY I. How to face GENERICS II. How to face BIOSIMILARS Conclusion Information about the Author Appendix
  3. 3. 23/05/2016 3 How to face Generics Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou
  4. 4. 23/05/2016 4 Context This wave of patent loss has allowed the development of new generic drugs. A Global analysis finds that the market earned revenues is $123.85 billion in 2010 and will reach $231.00 billion in 2017 at a compound annual growth rate of 9.29 % from 2011-2018. The entry of generics has had huge impact in particular on the price of medecine or the turnover of some pharmaceuticals companies. For example, in Germany the prices of generic drugs are on average 71% lower than those of their originators and in France it’s about 75% to 80%. To face this upheaval of the landscape of the medicine, producers of originators have set up various strategies. For our benchmark we observe action of 11 companies from 2000 to 2015 (See table 14) Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou
  5. 5. 23/05/2016 5 Context Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou Company Product Glaxosmithkline Augmentin, Paxil, Amoxicilline Lilly Prozac Hoechst Cardizem Servier Périndopril Merck & Co Claritin Fournier Lipanthyl Astrazeneca oméprazole Merck-Lipha Glucophage MSD Inegy, Zocor Pfizer Gabapentine Bristoll Myers Squibb Buspirone Teva Simvastatine Table 14: Sample of the benchmark in US and EU
  6. 6. 23/05/2016 6 How to face Generics Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou
  7. 7. 23/05/2016 7 How to face Generics: Price Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou The price reduction of the originators at the level of the price of the generic medicines can allow to keep the advantage acquired by the brand and to preserve a part of his market. This policy is only relevant when demand is price sensitive. The impact of the strategies of companies differs according to market conditions. We thus notice a particular evolution of markets upon the arrival of the generic medicines.  A originators would have many generics when his sales and price are high.  The evolution of the price of the originators depends on the sensitivity of demand to the price of the product.  The falling price of the originators or the production of generic by the producer of originators limits the penetration of generic competitors on the market.
  8. 8. 23/05/2016 8 How to face Generics: Patent Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou Early in the life cycle of the drug, patent protection is the major tool to counter the entry of generic. To increase its protection, the laboratory puts down, after the discovery of the molecule, a whole series of patents: patent on the molecule, on indications etc. The multiplicities of patents, as well as their spreading in time, allow the laboratory to make more complex the identification of the valid patents by the potential producers of generics and to lengthen the period of exclusivity covered by patents. GlaxoSmithKline (GSK), for example, filed four new patents for Augmentin in 2000 in the United States, two years before the expiration of the first patents.
  9. 9. 23/05/2016 9 How to face Generics: Legal Action Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou The legal battles between producers of originators and manufacturers of generics are the most media. The first ones accused the second of violating unexpired patents or dispute the bio-equivalence claimed by generic companies. The action of justice for violation of the patent has for consequence the suspension of the marketing of the generics medicines. It allows big laboratories to win some invaluable weeks of exclusivity on the market. For example: GSK has filed several lawsuits for violation of patents of Paxil in the US and Lilly sued generic makers of Prozac for the same reasons. Source: Les laboratoires pharmaceutiques face à l’arrivée des génériques : quelles stratégies pour quels effets ?- Bulletin d’information en économie de la santé-n° 84 - Octobre 2004
  10. 10. 23/05/2016 10 How to face Generics: Cooperation Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou Some pharmaceutical companies have reached financial agreements with producers of generic to postpone competitors launch on the market. For the European Commission, Servier had work with 5 generics companies (Niche/Unichem, Matrix ( Mylan), Teva, Krka and Lupin.) to slow down the entrance on the market of generic versions of his medicine, marketed under the name of Coversyl, to handle the high blood pressure and the cardiac insufficiency. The European Commission heavily sanctioned the laboratory Servier with a 331 million euro fine to have hindered the launch on the market of generic versions of its product Source: http://www.bloomberg.com/news/articles/2014-07-09/servier-to-teva-fined-582-2- million-on-generic-delays
  11. 11. 23/05/2016 11 How to face Generics: Production Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou Creation of new formulations and new methods of administration possibly patentable. The laboratory intensely promotes these innovations before patent expiry of the original formulation, so that they supplant in the prescriptions or the consumer habits (eg dispersible Prozac, Prozac Weekly) They developed new dosages containing for example less active ingredient for a similar efficiency (Lipanthyl® 160 mg was placed on the market to replace the Lipanthyl® micronized 200 mg). They make associations of a molecule with another one. For example, in Germany Inegy® combines the active ingredients of Zocor ® (simvastatin) and Ezetrol® (ezetimibe). They developed new products, very close to the initial product and could be replaced. For example: In the case of the oméprazole, the isomeric molecule was launched on the market in the United States two years before the arrival of the generic medicines and allowed AstraZeneca to keep about three quarters of the market which he had in this indication.
  12. 12. 23/05/2016 12 How to face Generics: Market Saturation Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou The laboratory can produce itself the generic medicine of one of its originators; like that the company will have many products on the market and would increase its opportunity to sell one product of the portfolio. For example, Merck-Lipha continues to market Glucophage whereas Merck Generics launched on the market a Metformine Merck.
  13. 13. 23/05/2016 13 How to face Generics: Prescription Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou The new European regulations promote this strategy by granting one year additional exclusivity for products that laboratories decided to switch to OTC . Pharmaceutical laboratory make the drug available without a prescription and bet on attachment to the brand. The Claritin (loratadine ) medicine of the laboratory MSD became OTC in the United States in November, 2002. Generic version entered on the market in the end of December, 2002.
  14. 14. 23/05/2016 14 How to face BIOSIMILARS Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou
  15. 15. 23/05/2016 15 Context The EMA has approved 20 biosimilars within the product classes of human growth hormone, granulocyte colony-stimulating factor, erythtropoesis stimulating agent, insulin and tumour necrosis factor (TNF)-inhibitor, for use in the EU . The first biosimilar launch in the EU (Omnitrope/Somatropin) occurred in Germany in 2006. This introduction of the biosimilars on the market has many impacts. For example, biosimilars of filgastrim are used more than the reference product (Neupogen), allowing more patients to benefit at lower costs. The savings achieved through the use of filgrastim biosimilar is estimated at € 318M since 2009. In this part we will study how the laboratory Amgen, producer of Neupogen responds to the arrival of biosimilars. Amgen is an American company world leader in medical biotechnology industry. It has over 18 000 employees for a turnover of $ 20 billion in 2014 and his headquarter is in California. Amgen has 14 products on different type’s diseases and Neupogen is one of them. The first commercialization of Neupogen in Europe was in 1991 with the collaboration of Roche . In 2008, this blockbuster represented 1,4 billion dollars and according to Symphony Health Solutions, Neupogen had approximately $1,2 billion in sales in calendar year 2014. The time of total exclusivity enjoyed by Amgen for the Neupogen depend on the country Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou
  16. 16. 23/05/2016 16 How to face Biosimilars: Prescription Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou
  17. 17. 23/05/2016 17 How to face Biosimilars: Price Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou When the filgrastim biosimilars enter into the market they provide an average discount of 10.8% in 2008 and 35.0% in 2009. Amgen needs to adapt his price to face this situation. We clearly see that we have a difference in terms of price between biosimilar and originators. Amgen has tried to adapt his price to remain competitive, but we still have differences. (See graph 23). The price of the two types of drugs decrease over time, biosimilar and originators follow each other. Source: http://www.codage.ext.cnamts.fr/codif/bdm_it//fiche/index_fic_medisoc.php?p_code_cip=3400935395214&p_site=ameli http://www.codage.ext.cnamts.fr/codif/bdm_it//fiche/index_fic_medisoc.php?p_code_cip=3400935395214&p_site=ameli
  18. 18. 23/05/2016 18 How to face Biosimilars: Patent Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou Over time Amgen has developed 5 indications for his product (incremental patenting).
  19. 19. 23/05/2016 19 How to face Biosimilars: Legal Action Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou Novartis' Sandoz is the first drug maker to win U.S. approval of a biosimilar product. But the United States court of appeals for the federal circuit gave an injunction against Sandoz, preventing that company from marketing, selling, offering for sale, or importing into the United States its FDA-approved ZARXIO® biosimilar product until the court resolves the appeal . This give more time to Amgen to sell his product. Amgen based his action on the fact that the pre-litigation information-exchange provisions of the Biologics Price Competition and Innovation Act of 2009 (BPCIA) are mandatory and for Sandoz this is optional. The BPCIA states that a biosimilar applicant "shall provide" a copy of its FDA application and manufacturing information to the Reference Product Sponsor (RPS) here, Amgen. The statute further states that in the event that a biosimilar applicant fails to provide its application and manufacturing information, the RPS may file a declaratory judgment action against the applicant .
  20. 20. 23/05/2016 20 How to face Biosimilars: Cooperation Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou The company’s CEO Kevin Sharer stated in January 2011 that in order to drive growth, the company was going to consider entering the biosimilars sector but “in a controlled way,” (Beasley, 2011). In December 2011, Amgen announced it had signed a deal with Watson to develop and commercialize a number of oncology biosimilar monoclonal antibodies (MAbs) . Under the agreement, Amgen will be primarily responsible for developing, manufacturing and initially commercializing the products, while Watson will put in up to $400m in co-development costs and will share product development risks. Biosimilars from the collaboration are expected to be sold jointly by both companies. Amgen has secured a clause which prevents the collaboration from making biosimilar versions of its drugs including Enbrel (etancercept), Aranesp (darbepoetin alfa) and Epogen (epoetin alfa). This deal gives the opportunity to Amgen to enter the biosimilars arena, to develop his know how and to know more how his can protect his product, Neupogen.
  21. 21. 23/05/2016 21 How to face Biosimilars: Production Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou Neulasta (pegfilgrastim) can be considered as a new version of Neupogen. They are both made of a natural protein known as granulocyte-colony stimulating factor (or "G-CSF"). Pegfilgrastim (Neulasta) has a polyethylene glycol, "PEG," unit added to it, which makes the molecule larger, so that it stays in your system longer than filgrastim (Neupogen). Two forms of G-CSF are approved for use in pediatric cancer patients. The needs for fewer injections with Neulasta (pegfilgrastim) improve quality of life for pediatric oncology patients and their families .
  22. 22. 23/05/2016 22 How to face Biosimilars: New Market Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou Amgen bought the rights of Neupogen and Neulasta in more than 100 emerging markets where the drugs were sold by Roche . Amgen believes it can drive growth of Neupogen (filgrastim) and Neulasta (pegfilgrastim) more effectively in the Roche territories, which cover the world's emerging economies including Eastern Europe, Latin America, Asia, the Middle East and Africa. For Robert Bradway the chief executive of Amgen "This agreement will enable Amgen to reach more patients around the world with two of its innovative medicines." All this 6 levers help Amgen to maintain a high level of sell for his product Neupogen: 1.2 billion in 2014 dollars.
  23. 23. 23/05/2016 23 How to face Biosimilars: New Market Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou Amgen bought the rights of Neupogen and Neulasta in more than 100 emerging markets where the drugs were sold by Roche . Amgen believes it can drive growth of Neupogen (filgrastim) and Neulasta (pegfilgrastim) more effectively in the Roche territories, which cover the world's emerging economies including Eastern Europe, Latin America, Asia, the Middle East and Africa. For Robert Bradway the chief executive of Amgen "This agreement will enable Amgen to reach more patients around the world with two of its innovative medicines." All this 6 levers help Amgen to maintain a high level of sell for his product Neupogen: 1.2 billion in 2014 dollars.
  24. 24. 23/05/2016 24 How to face Biosimilars: Environmental Strategy 3 Actions:  Promote the obligation of the four-letter code (BQ) at the end of the name of Biosimilars  Promote for the Biosimilar a different Summary of Product Characteristics (SmPC) from the Generics and Originators  Promote the substitution of Biosimilars by physicians All this will contribute to highlight that biosimilars unlike generics are not identical to originators, but different products BQ: Biological QualifierSource: Interview Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou
  25. 25. 2 Actions:  Create more adhesion of patients and healthcare professionals to their drugs (adhesion to the brand)  Bring more services to patients and healthcare professionals on their drugs (For example monitoring)  Example: Amgen’s Evaluation of personalized patient counseling for Enbrel  Phase IV trial with 300 patients with RA  Patient adherence and persistence to therapy in chronic disease  Justify a premium price for Enbrel over Biosimilars 23/05/2016 25 How to face Biosimilars: Brand Strategy Source: InterviewRA: Rheumatoid Arthritis Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou
  26. 26. Price Patent Legal Action Cooperation Product Prescription Market Saturation New Market Environmental Strategy Brand Strategy 23/05/2016 26 Conclusion 10 Levers 1 4 3 2 8 7 6 5 10 9 Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou
  27. 27. 23/05/2016 27 Conclusion Regulatory issues on the development of Biosimilars – Joseph Pategou Source: Interview  No Single but Combination of Strategy  No Global but Glocal Strategy
  28. 28. 23/05/2016 28 Information about the author I am fascinated by healthcare and the experience of many companies to develop new types of drug with the aim of saving lives around the world. Main topics of passion in the healthcare: - Strategy - Digital - Innovation - Biosimilars If you want to know more, please contact me: joseph.pategou@skema.edu M. Joseph Pategou Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou
  29. 29. 23/05/2016 29 THANK YOU FOR YOUR ATTENTION Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou
  30. 30. 23/05/2016 30 APPENDIX Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou
  31. 31. 23/05/2016 31 COMPARISON OF DIFFERENCE AND COMMON POINTS BETWEEN BIOSIMILARS AND GENERICS-STRUCTURE KEY POINTS BIOSIMILARS Generics Nature Drug extracted from a biological environment Chemical drug Molecular size Up to 270,000 Da 100 to 200 Da Development Comparative studies Bioequivalence studies Duration of development 5-7 years(500 patients) 2-3 years (20-50 patients) Cost of the development 200-300 million dollars 2-4 million dollars Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou
  32. 32. 23/05/2016 32 REFERENCE 1. http://www.sante.gouv.fr/qu-est-ce-qu-un-generique.html 2. Where the opportunities are and what role will they play? EGA Lisbon 2011-IMS 3. http://www.ema.europa.eu/ema/index.jsp?curl=pages/special_topics/document_listing/document_listing_000318.jsp 4. http://www.gabionline.net/Biosimilars/General/Biosimilars-approved-in-Europe 5. http://www.gabionline.net/Biosimilars/General/Biosimilars-approved-in-Europe 6. Shaping the biosimilars opportunity-december 2011 7. http://www.sante.gouv.fr/qu-est-ce-qu-un-generique.html 8. Rapport 2012 sur les médicaments génériques-Mutualité Française 9. EMA Procedural advice for users of the centralized procedure for generic/hybrid applications 10. Lessons learned from the review of the labelling of 5 centrally authorised pandemic vaccines- 10 February 2014 EMA 11. Rapport 2012 sur les médicaments génériques- Mutualité Française 12. http://gabionline.net/Biosimilars/General/Germany-wants-to-increase-biosimilars-penetration 13. http://ec.europa.eu/health/authorisation-procedures_en.htm 14. Guideline on the investigation of bioequivalence- London, 20 January 2010- European Medicines Agency 15. http://www.australianprescriber.com/magazine/26/4/article/712.pdf 16. Directive 2001/83/EC, as amended by Directive 2003/63/EC and Directive 2004/27/EC 17. Biosimilars Marketing Authorisation status as of January 2013: 22 Marketing Authorisation Applications 18. http://www.ema.europa.eu/ema/index.jsp?curl=pages/special_topics/document_listing/document_listing_000318.jsp 19. Individual case safety report: Article 28 of Commission Implementing Regulation (EU) No 520/2012 of 19 June 2012 20. Biological Qualifier An INN Proposal-July 2014- World Health Organization, Geneva 21. http://www.gabionline.net/Biosimilars/Research/Improved-labelling-sought-for-biosimilar-acceptance 22. EC consensus paper 2013- What you need to know about Biosimilar Medicines 23. European Commission consensus paper 2013 : What you need to know about biosimilar medicines 24. http://gabionline.net/Biosimilars/General/Germany-wants-to-increase-biosimilars-penetration 25. http://gabionline.net/Biosimilars/Research/Extrapolation-for-biosimilars 26. Directive 2001/83/CE du parlement européen et du Conseil du 6 novembre 2001 instituant un code communautaire relatif aux médicaments à usage humain 27. Where the opportunities are and what role will they play? EGA Lisbon 2011-IMS 28. http://healthcare.blogs.ihs.com/2012/01/06/generic-drug-price-trends-france-germany-italy-spain-uk/ Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou
  33. 33. 23/05/2016 33 REFERENCE Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou
  34. 34. 23/05/2016 34 REFERENCE Originators and Princeps - How to face Biosimilars and Generics – Joseph Pategou

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