Generic drug suppliers weigh in on predictable, unpredictable category impact
In 2025, the number of generic drug manufacturers gaining FDA approvals and launching biosimilars and GLP-1 drugs should significantly increase, along with those companies developing generics in other promising areas. But some factors are beyond suppliers’ control, including possible tariff increases, pending legislation and global warfare. Ongoing price erosion and supply chain problems could also pose challenges.
For generics suppliers, relatively new categories like biosimilars and GLP-1’s generate attractive profits, high demand and less competition than some traditional generics. The GLP-1 market is the hottest new space, with sales totaling $49.3 billion. Market size is expected to hit $157.5 billion by 2035, growing at a CAGR of 11.1 percent, indicated Roots Analysis. GLP-1 reception agonists are mainly used in type II diabetes treatment. Some help to treat obesity and cardiovascular disease.
“GLP-1s are all the buzz right now, branded products like Ozempic and Wegovy [both from Novo Nordisk],” said Milan Kalawadia, CEO, Dr. Reddy’s. “Initially launched for diabetes, they started to show benefits for weight loss. GLP-1s provide tremendous value from a generic standpoint. They’re the next blockbuster category for generics.”
[Read more: Biosimilar Council comments on IQVIA report on biosimilar void]
In June, Teva Pharmaceuticals announced its launch of an authorized generic of Victoza, an injectable drug known as liraglutide. Then in December, Hikma received FDA approval for an abbreviated new drug application and launched liraglutide, the first FDA approved generic version of Victoza, said Dr. Hafrun Fridriksdottir, who was named president of Hikma’s generics division in April. Hikma’s liraglutide, its first retail injectable product, is an adjunct to diet and exercise to improve glycemic control in those with type 2 diabetes.
“This is the latest example of our actions to expand our portfolio in growing therapeutic areas like diabetes and to provide customers and patients with affordable access to a reliable supply of high-quality essential medicines,” said Dr. Bill Larkins, president of injectables, Hikma. According to IQVIA, U.S. sales of liraglutide injection, 6 mg/mL, were approximately $1.3 billion in the 12 months ending October 2024.
In November, Amneal received FDA approval for exenatide, its first generic injectable glucagon-like peptide-1 (GLP-1) agonist. This DHE autoinjector can provide lasting pain relief from serious headaches, allowing patients to self-administer at home.
Dr. Reddy’s is also setting the stage to have a significant presence in GLP-1s. “It’s a space Dr. Reddy’s is focused on,” said Kalawadia. “We’re not making definitive statements, but we’re working aggressively to be a major player, which requires meticulous execution.”
[Read more: AAM displeased with Medicare Drug Price Negotiation list]
Biosimilars
Biosimilars have also made inroads among generic suppliers. But development is lengthy and expensive. McKinsey estimates that it costs $100 to $300 million to develop a biosimilar and that it takes between six to nine years to go from analytical characterization to regulatory approval.
Rewards, however, can be high. The U.S. biosimilars market grew at a CAGR of 21% from 2019 to 2023, with sales rising from $4.5 to $9.3 billion, Alira Health said. Key drivers include regulatory advancements and updated FDA guidance on biosimilar interchangeability. Biosimilars are expected to surpass $64 billion by 2028, buoyed by patent expirations, more biosimilar approvals and more generic suppliers.
Amneal said it has five biosimilars in the pipeline. Three others are already available for treating cancer: Releuko (filgrastim-ayow) and Fylnetra (pegfilgrastim-pbbk), both developed in collaboration with Kashiv Biosciences, LLC, and Alymsys (bevacizumab-maly), created under a partnership with mAbxience. By working with partners, Amneal controls costs and guarantees supplies.
Late last year, the FDA approved Celltrion’s Steqeyma (ustekinumab-stba). The biosimilar “mimics” Johnson & Johnson’s Stelara (ustekinumab) for subcutaneous injection or intravenous infusion in adults and children with plaque psoriasis and psoriatic arthritis, as well as adults with Crohn’s disease and ulcerative colitis. Celltrion also offers Zymfentra (infliximab-dyyb), another immunology-focused biologic.
Several weeks ago, Fresenius signed a licensing agreement with South Korea’s SamChunDang Pharm. Under the agreement, Fresenius Kabi will exclusively commercialize SCD’s aflibercept biosimilar candidate in the United States and several Latin American countries. Aflibercept is used to treat various ophthalmic disorders, including wet age-related macular degeneration.
And earlier this year, Evernorth Health Services announced it will offer a Stelara biosimilar available for $0 out-of-pocket for eligible patients of its specialty pharmacy, Accredo. The interchangeable biosimilar will be produced for Evernorth’s affiliate private label distributor, Quallent Pharmaceuticals. It will be available for most patients through Quallent’s copay assistance program and is expected to save patients about $4,000 annually. The biosimilar price will be more than 80% lower than the list price of Stelara. Stelara is used to treat moderate to severe plaque psoriasis.
Dr. Reddy’s is focusing on biosimilars in immunology and oncology, with several drugs under development, including Denosumab, for treatment of postmenopausal women with osteoporosis and for preventing skeletal-related events in people with bone metastases from solid tumors. It is also developing Abatacept, for treating adults with moderately to severe active rheumatoid arthritis.
“Much ground work is being done to establish the United States front end while we focus on execution of delivering finished goods,” he added. “We’ve been in biologics for 25 years, primarily in emerging markets. We’re currently building our commercial organization in the United States, scaling up with dedicated manufacturing facilities and a category-specific sales and management team. We’re continuing to build awareness of Dr. Reddy’s in this space since FDA regulatory clarity emerged three or four years ago.”
United States and World Events
The U.S. political climate and world events could also impact the generics industry in 2025. Unfortunately, suppliers have no control. In some cases, they can only choose how to react by preparing alternative resources.
“There’s lots of activities happening globally,” said Kalawadia. “We’re closely watching [possible] geopolitical risks, what’s happening worldwide, the various wars and how the new administration imposes potential tariffs. Supply chain is another area we’ll continue monitoring. Shipping routes have been disrupted and costs associated with shipping have increased. We’re working to secure our supply chain, ensuring we have required inventory for customers.”
As a U.S.-based manufacturer and distributor, Hikma has fewer concerns. But Fridriksdottir does worry about drug shortages and believes “stronger government partnership” could alleviate them. “One example is the widely used ADHD medicine lisdexamfetamine, which has been in short supply for over two years,” she said. “Generic manufacturers like Hikma could quickly help solve shortages if provided adequate quota of Advanced Pharmaceutical Ingredients by the U.S. Drug Enforcement Administration.”
Still, Hikma had a successful 2024 and is bullish on 2025. “We have many reasons for optimism,” said Fridriksdottir. “We have great people, a growing portfolio, world-class manufacturing and a quality record. Many medicines we make are essential to the U.S. health care system.”
- LEGISLATIVE IMPACT
For better or for worse, several newly passed and proposed bills and FDA legislation could have a significant impact on the future of the generic drug segment. A big challenge, though, is that there is often a disconnect between reality and how policy makers perceive the industry.
“Many members of Congress know about the generics industry, but many aren’t aware of our challenges or how to help us help Americans,” said Dr. Hafrun Fridriksdottir, president of Hikma’s generics division. “Generic manufacturers are different from Big Pharma—we provide 90% of medicines for less than 20 percent of all dollars spent. We need regulations and policies that favor generics approvals, manufacturing and adoption. In 10 years, generics and biosimilars have saved patients and U.S. healthcare $2.9 trillion.”
Listed below is some potentially important legislation:
S. 2305 - Biosimilar Red Tape Elimination Act (introduced 7/13/2023)
The bill establishes a presumption that an approved biosimilar is interchangeable with the reference product without the need for additional evidence from the manufacturer. It removes the applicable exclusivity periods for a first interchangeable biosimilar (i.e., a product that is the first interchangeable biosimilar to be approved with respect to the reference product).
S. 2780 & HR 5429- Medication Affordability and Patent Integrity Act (introduced 9/13/2023)
This Act would require the sponsor of any application, including any drug or biologic application, to certify to both the FDA and PTO that information submitted to each agency is consistent with information submitted to the other. This clarification will help address gaming of the patent system by brand drug manufacturers.
According to the bills’ sponsors, drug manufacturers are supposedly “able to unfairly extend the exclusivity period for a drug by submitting partial information for their initial patent, in order to help secure subsequent patents down the road” due to “incomplete coordination” between the FDA and PTO. Proposed legislation aims to “lower prescription drug costs by closing [such] oversight gaps.”
S. 150-Affordable Prescriptions for Patients Act of 2023 (passed 07/11/2024)
S. 150 streamlines patent litigation and accelerates patient access to affordable biosimilars by capping the number of patents that brand-name pharmaceutical companies can assert in Biologics Price Competition and Innovation Act patent litigation. By limiting the number of patents that can be asserted, the legislation would prevent brand manufacturers from moving the goalposts and keeping lower-cost medications out of patients’ hands.
FDA-The Drug Supply Chain Security Act (DSCSA) (signed into law 2013)
The DSCSA became law in 2013. Its primary goal is to prevent counterfeit drugs from entering the pharmaceutical supply chain. It requires manufacturers, wholesalers, re-packager, and dispensers to implement serialization and traceability measures in stages over a 10-year period, culminating in comprehensive system-wide changes and drug manufacturer compliance by November 2024.
