The report, authored by healthcare economist Alex Brill, CEO of Matrix Global Advisors, cautions that pending regulatory decisions and actions by individual states could stifle the US biosimilars market and reduce potential savings for payers and consumers.

Mr Brill warns that adverse regulatory decisions and market risks not only may impede biosimilar market share, but may stop biosimilars makers entering the market altogether for many products. He gives as examples of ways in which biosimilars are possibly being hindered in the US the fact that:

• The Food and Drug Administration has yet to offer guidance on key aspects of the regulatory pathway, including naming conventions and clinical testing requirements for biosimilar [1]
• Legislation being considered in states to govern biosimilar substitution may negatively impact biosimilar uptake [2]
• Private and public healthcare plans’ coverage of biosimilars will influence use, as will prescriber and patient perceptions of biosimilars

Mr Brill estimates that a biosimilars will only become viable for biologicals with average annual sales greater than US$898 million. This he says is the point at which sales of the biosimilar will offset the cost of developing and bringing it to market.

However, if biosimilars experience a smaller market share due to unfavourable regulatory barriers, Mr Brill estimates that they will only become viable for biologicals with average annual sales greater than US$1.3 billion. Whereas in a third, more favourable scenario, where lower R & D costs are considered, he concludes that the breakeven point drops to sales greater than US$627 million.

To conclude, the report finds that even under the most favourable scenario, manufacturers are only likely to invest in biosimilars for the biggest selling biologicals; meaning that biosimilars for biologicals with a smaller sales market may never reach consumers.

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References
1.   GaBI Online - Generics and Biosimilars Initiative. US guidelines for biosimilars [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2015 Mar 13]. Available from: www.gabionline.net/Guidelines/US-guidelines-for-biosimilars 
2.   Derbyshire M. US state legislation on biosimilars substitution. Generics and Biosimilars Initiative Journal (GaBI Journal). 2013;2(3):155-6. doi:10.5639/gabij.2013.0203.040

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