The ‘Biosimilar Action Plan’

20-Jul-2018

Another FDA move designed to chase value based pricing, says GlobalData

The ‘Biosimilar Action Plan’

On Wednesday (18 July) the FDA unveiled the ‘Biosimilar Action Plan’ (BAP), which aims to promote the development and accessibility of biosimilars in the US healthcare market.

Rahael Maladwala, Pharma Analyst at GlobalData, a leading data and analytics company, offers his view on what this means for the price of branded biologic molecules:

The BAP is another FDA initiative that looks to increase competition for biologics and in turn, reduce prices

“We believe that this is another positive step in the chase for value based pricing. The US has long had a problem with the cost of drugs, with the high annual cost of therapy (ACOT), proving to be a burden for healthcare providers and payers; and as such, a move to ‘value based’ pricing, where cost effectiveness is taken into account as well as safety and efficacy, has been in the making for a while. The BAP is another FDA initiative that looks to increase competition for biologics and in turn, reduce prices.”

Biosimilars are biopharmaceutical drugs that have been designed to have active properties. They are similar to branded molecules that have already been licensed. Due to the complexity of these molecules, biosimilars do not have to be exact copies of the original molecule, but within a 20% range of similarity, as well as going through separate clinical studies to prove safety and efficacy comparable to the original molecule.

“While clinical development of biosimilars still works out to be relatively expensive, compared to small molecule generics, it is far cheaper than discovering and developing an original molecule. These savings can translate into a lower priced drug, which encourages the original drug maker to lower their prices, to remain competitive. The situation that the FDA hopes to replicate is Mylan’s Copaxone biosimilar approval; this is less than half the price of the original molecule, and might force Teva to lower their price.

“The BAP looks to help facilitate the development and approval of biosimilars in America; it will use the expertise from the FDA to promote biosimilar competition by reducing tactics used to stifle follow-on product approval. Ultimately, the FDA want to encourage competition for biologic molecules, in the hope that it leads to more cost effective pricing; reducing the burden on the state. If all goes as planned, expect to see an influx of biosimilar approvals over the coming years.”

Sign up for your free email newsletter

Companies

Featured Companies

Related Content

Eli Lilly’s acquisition of Loxo Oncology will result in quick return of investment
Eli Lilly’s acquisition of Loxo Oncology will result in quick return of investment
BMS' acquisition of Celgene could position the company amongst top five most profitable pharma giants
BMS' acquisition of Celgene could position the company amongst top five most profitable pharma giants
Drug pricing and reimbursement concerns will remain the leading impediment to industry growth in 2019
Drug pricing and reimbursement concerns will remain the leading impediment to industry growth in 2019
R&D returns fall to lowest level in 9 years, says Deloitte and GlobalData
R&D returns fall to lowest level in 9 years, says Deloitte and GlobalData
Drug development in neuroimmunology to witness strong growth in the 8MM
Drug development in neuroimmunology to witness strong growth in the 8MM
Immuno-oncology drug development and personalised medicine will continue to reshape the pharma industry in 2019
Immuno-oncology drug development and personalised medicine will continue to reshape the pharma industry in 2019
GSK and Pfizer deal shows shift in strategy shift to create the leader in over-the-counter products
GSK and Pfizer deal shows shift in strategy shift to create the leader in over-the-counter products
Big Data and AI to transform healthcare by driving innovation, growing revenues and increasing operational efficiencies
Big Data and AI to transform healthcare by driving innovation, growing revenues and increasing operational efficiencies
Bayer receives European approval for haemophilia drug Jivi ... but has stiff competition ahead
Bayer receives European approval for haemophilia drug Jivi ... but has stiff competition ahead
Second failure of AstraZeneca’s Imfinzi + tremelimumab combination significant setback says GlobalData
Second failure of AstraZeneca’s Imfinzi + tremelimumab combination significant setback says GlobalData
Commercial opportunities for emerging infectious diseases vaccine developers
Commercial opportunities for emerging infectious diseases vaccine developers
Global atopic dermatitis market set to reach $18.3 billion by 2027
Global atopic dermatitis market set to reach $18.3 billion by 2027
Pfizer’s palbociclib is the top breast cancer drug used in clinical trials initiated in 2018
Pfizer’s palbociclib is the top breast cancer drug used in clinical trials initiated in 2018
Pharma companies may miss crucial EU drug packaging deadline with a no-deal Brexit
Pharma companies may miss crucial EU drug packaging deadline with a no-deal Brexit
Global chronic lymphocytic leukemia market set to reach $9.2bn by 2027
Global chronic lymphocytic leukemia market set to reach $9.2bn by 2027
Commercial prospects for immuno-oncology development across oncology indications in untapped cancer types or in combinations
Commercial prospects for immuno-oncology development across oncology indications in untapped cancer types or in combinations