Pharma Marketing: Impact of Biosimilars
One consistent challenge we have seen in our twenty years of B2B marketing for the pharmaceutical business is improving medication adherence—that is, ensuring patients are taking their medications as prescribed. One of the largest barriers to adherence is cost; generic versions of brand name drugs help make those medications more affordable. But for drugs categorized as biologics, “generic” is anything but.
An advisory panel for the Food and Drug Administration recently recommended the approval of EP2006, a drug that reduces infection rates among patients receiving chemotherapy by increasing white blood cell counts. EP2006 is a biosimilar of the biologic drug Neupogen. If the FDA follows the recommendation, EP2006—manufactured by Novartis—will be the first biosimilar to receive approval in the United States.
What are biologics and biosimilars?
Biologics are medications made of large, complicated molecules from biological sources—living tissue, blood, etc. They are used to treat a variety of conditions, including diabetes, rheumatoid arthritis, multiple sclerosis and cancer. Biosimilars are drugs that are—as the name implies—very similar to existing, approved biologics.
Why should we care?
Biologics are more complex than small-molecule, synthesized medications, often requiring special equipment and processes as well as lengthy research periods and multiple clinical trials. In the end, development can cost up to $250 million before a biologic achieves FDA approval. This expense often gets passed down to the patient (in the case of Neupogen, around $300 per dose), making these potentially life-saving drugs cost prohibitive. While still far more complicated than a small-molecule synthetic, a biosimilar is more affordable to produce than a biologic, as the bulk of the research and development has already been done by the makers of the original biologic.
How much savings are we talking about?
When a synthetic medication goes off patent, competition from multiple generics can reduce the price of the drug by up to 80%. Because biosimilars are still more complex than synthetic generics, their cost reductions will not be as dramatic. Industry experts are predicting savings of 20-30% as biologics manufactured in the U.S. within the past twelve years begin to go off patent, though final percentages will ultimately depend on regulations in development by the FDA.
Biosimilars and pharma marketing
As biosimilars begin to enter the marketplace, makers of biosimilar drugs will need to overcome public perception of generic as “cheap,” as the price difference on biosimilars will not be as impactful as it is with synthesized generics. On the other side of the coin, makers of brand name biologics will need to decide whether to step up their marketing game to maintain their competitive edge.
As marketers of complex products and services, we’re up for either challenge!
