F&S analyst Mr Sumanth Kambhammettu says that patent expiries of some top-selling biopharmaceuticals have resulted in a massive market opportunity. He argues that drug classes such as erythropoietins, insulin and analogues, granulocyte colony-stimulating factors, human growth hormones and interferons, which have all lost patent protection, had a collective market size of over US$34 billion (Euros 24.27 billion) in 2007. These expensive biopharmaceuticals are used primarily for diseases like cancer and diabetes so patent expiries and “an increasing emphasis on cost containment are motivating governments to switch to affordable alternatives”, the report states. Thus, “there exists tremendous growth opportunity for biosimilar manufacturers”.

However, the F&S study acknowledges that “the development of biosimilars is riddled with complexities, ranging from R&D and manufacturing to marketing”. Their development is expensive and the current average cost of bringing a biosimilar to market is around US$100-$200 million (Euros 71-142 million), in addition to a development period ranging from eight to ten years.

Marketing presents another challenge, says the report “as, typically, there is initial resistance from the physician community”. The most significant challenge, however, “will be in proving similarity with the reference product as per the EMEA’s standards," notes Mr Kambhammettu.

Pricing will be a key factor to recover the high level of investment that is required to develop and manufacture biosimilars. In addition, marketing strategies will have to be very different from generic drugs. “While pricing a biosimilar, manufacturers must assess various factors such as the nature of the market, product class, level of competition and reimbursement structure,” advises Mr Kambhammettu. “As current biosimilars are marketed in the hospital sector, manufacturers must focus their marketing efforts on specialists to increase the probability of success. Moreover, they must make efforts towards advancing physician awareness by disseminating data pertaining to long-term safety and efficacy of biosimilars.”