The Biopharmaceutical market is broadly divided in three Geographical clusters. All three have different characteristics in terms of potential, regulatory pathways, growth and uptake of Biosimilars.
a. USA is the Potential leading market for Biosimilars.
b. Biosimilar uptake is negligible in USA
c. CAGR (2005 -10) is 9%
d. There is Less clarity on regulatory pathways
2. Advanced Economies ( Europe, UK and Canada)
a. There is established frame work of regulatory pathways
b. Slow uptake of Biosimilars in these markets
c. Uptake of Biosimilars is not homogenous in all countries
d. CAGR (2005 -10) is 13-14
3. Pharmerging Markets (Brazil, China, Korea, India and Vietnam)
a. Loose regulatory pathways
b. Fast growing Biologics market
c. Uptake of Biosimilars is better than US and Advanced economies
d. The growth is the highest
Most of the immediate value creation will be from Pharmerging markets. In long term US will be the main driving worth $11 billion to US $25 in 2020 representing 4% and 10% of the total biologic market. The overall penetration of Biosimilars within the off patent biologic market is forecast to reach up to 50% by 2020, assuming a price discount of 20-30%.
Entry Barrier / Challenges
Biosimilar market is Lucrative but there are entry barriers. Some of the entry barriers have been created by existing Bio Pharmaceutical companies.
1. Manufacturer of Biologicals have started working on 2nd generation products where patents are applicable. There is motivation for clinician to use 2nd generation products as they offer better efficacy, convenience and pricing etc.
2. The investment required in developing Biosimilar facility is significantly higher than the generic drugs. It takes longer time to get the returns in case of Biologicals
3. USA is the most potential market for Biologicals and the regulatory pathways are not very clear.
4. The uptake of Biosimilars is slow and uptake is not homogenous in Europe.
5. The manufacturer of branded products use patient assistance plan. They have differential pricing for patients as per the need and requirement. They have good infrastructure and well trained team. The clinicians using these kinds of products are generally not very low in number. This creates very competitive scenario. Moreover there are safety concerns for Biosimilars at least on short term bases.
6. The manufacturers of branded products have created differentiation by using new delivery devices. There are fewer companies manufacturing these delivery devices and many of them have exclusive arrangement.
Advantage India (Biosimilars)
Worldwide, Biosimilars have expanded the market. There is advantage in setting up manufacturing plant in India
1. Low Cost
• 40 – 50% of Development cost
• 30 – 40% of Manufacturing cost
• 10 – 20% of Salaries
……….. Compared to US / EU
• International standards in Infrastructure & Mfg.
• Understanding of Biosimil