Earlier this week we learned that Pfizer will return to Biocon rights to biosimilar versions of various insulin derivatives:
As of March 12, 2012, all rights licensed to Pfizer will revert to Biocon, and all insulin distributed under the brand name UniviaTM and GlarviaTM will be commercially available from Biocon Ltd. only, and will be exclusively manufactured, supplied, marketed and supported by Biocon.
Pfizer spokespeople continue to point out that the company is developing a broad portfolio of biosimilar opportunities in oncology, pain, and other areas. The media are also reporting that Pfizer’s rationale for returning rights to Biocon was based on shifting priorities within Pfizer, and not as a reflection of the Biocon assets themselves.
Some of the analyst comments are bordering on the ridiculous, suggesting that Pfizer suddenly realized that the insulin market is “competitive” and “dominated by Novo Nordisk, Sanofi, and Lilly…” as if the sharp folks at Pfizer are suddenly shocked to find there is gambling taking place in the casino.
Does this signal the beginning of the end for biosimilars, as some have suggested? We certainly don’t think so, and for some fairly obvious reasons:
> Branded biologics are expensive. This simple statement is enough to drive payers towards less-expensive alternatives, be they biosimilars or alternative therapies. The force of this simple sentence alone will drive research, development, and commercialization of biosimilars for the foreseeable future.
> While the US hems and haws on a biosimilar regulatory process, Europe has led the way. In our own biosimilars projects, we’re finding that national regulatory bodies who normally follow the FDA lead are now following the EMEA lead on biosimilars. From a government payer perspective, this makes a lot of sense. By “borrowing” the European regulatory process, a country can reduce its own healthcare costs and expand access to these important therapeutics. This, in turn, is creating interesting opportunities for companies who develop and manufacture high-quality biosimilars that are comparable to their European counterparts.
> Over time, API manufacturers will shift or expand from small molecules to biosimilars, creating competitive pressures that will drive prices down even further. Right now, biosimilars are more akin to branded generics or reformulated 505(b)(2) products. But as API manufacturing costs continue to decline, biosimilars will become the next big market for traditional API manufacturers who compete on high quality, scale, JIT delivery, and related competitive vectors.
So we’re not in the least worried about either company. Biocon’s biosimilars assets remain attractive for the right company. They will find another partner. Pfizer will continue to develop and expand their own biosimilars programs. We can’t help but wonder if they will develop an “authorized generic” for Enbrel, for example? Who knows. But regardless of this near-term setback, biosimilars are here to stay.