Past patent cliff, biosimilars to be focus

Earlier this year, the IMS Institute for Healthcare Informatics, the research wing of the healthcare industry analysis firm IMS Health, dropped a bombshell when it showed that U.S. spending on drugs fell in 2012, the first time that had happened in 55 years. But according to IMS’ latest figures, it was not the start of a trend.

The company’s latest report, released last month, shows that spending on drugs in the United States will once again rise in 2014. The drop in 2012 was the result of patent expiries on such drugs as Pfizer’s cholesterol medication Lipitor (atorvastatin calcium) and Sanofi’s blood-thinning drug Plavix (clopidogrel bisulfate), but the wave of patent expiries known as the patent cliff has mostly passed.

With many primary-care therapeutic categories now available as generics, drug companies have been investing heavily in the development of specialty drugs for such difficult-to-treat conditions as cancers, autoimmune disorders and chronic viral infections. According to IMS’ latest report, new drug launches will be “dominated” by specialty, especially cancer drugs. Specialty spending also is expected to increase rapidly, from $148 billion last year to $193 billion in 2017.

Concurrently, follow-on versions of biotech specialty drugs are expected to become a bigger part of the market as well. According to a report last month by Dallas-based research company MarketsandMarkets, the global market for biosimilars will hit $2 billion before the end of the decade. IMS estimates they will remain a relatively small share of the overall market for biologics for many years to come. With an expected biologic market value of $221 billion in 2017, biosimilars and non-original biologics — follow-on biologics that are approved through the same pathway as branded biotech drugs rather than through an abbreviated regulatory approval pathway — will account for 2% to 5% of that market. But that’s still much bigger than the 1.4% share of the $169 billion biologic market they had in 2012. By contrast, in 2011, generic pharmaceutical drugs accounted for 27% of total drug spending, according to the Generic Pharmaceutical Association.

Though the Patient Protection and Affordable Care Act of 2010 contained a provision for an abbreviated regulatory approval pathway for biosimilars, the Food and Drug Administration has yet to finalize regulations. Companies looking to market biosimilars must get them approved through the same pathway as branded biologics. For example, last year Teva received FDA approval for tbo-filgrastim, a biosimilar version of Amgen’s Neupogen for neutropenia, a condition that affects chemotherapy patients.