Ratings agency Fitch has issued a report claiming that the acceptance of biosimilars will be stronger in the USA than in Europe, “although uptake may be fairly slow at first”.
The claim is based on what Fitch believes is “a relatively efficient traditional drug market” in the USA which is “characterised by rapid branded-to-generic conversions leading to estimated generic penetration rates in excess of 80%”. It argues that third-party payors and the pharmacy benefit managers that serve them “are generally well incentivised to reduce costs and therefore instrumental in driving generic conversions”.
Against this backdrop, biosimilar substitution “will likely offer an even more compelling opportunity for these players on a drug-by-drug basis to reduce drug spending [and] payors will be aggressive in achieving these potential cost savings”. Fitch adds that “acceptance will be driven by the unique role that payors and PBM serve in driving rapid brand-to-generic conversions. However, we note that physician involvement will be key, possibly limiting the rate at which biosimilars capture market shares”.
The first biosimilars were launched more than seven years ago in Europe but the report states that “anecdotal and empirical evidence suggests that the uptake of these drugs is growing, but remains relatively tepid so far”. Several factors contributing to this trend “generally includes the novelty of biosimilars and the associated scientific limitations, combined with many of the same factors that have led to historically lower generic acceptance on the part of European doctors, pharmacists, and patients”.
Fitch concludes by saying it is possible biosimilars’ lower prices could drive incremental drug volumes and “some market participants indicate that this phenomenon has been observed in key European markets following biosimilar launches”. Increased volumes would likely “further enhance the profitability of biosimilars, especially for specialty distributors as it would allow them to leverage their economies of scale and highly fixed-cost structures”.
