Will biosimilars really have an impact on capacity?
As more companies express their intent to develop biosimilar products, many have speculated on the impact of these initiatives on global manufacturing capacity. Although some believe that biosimilar development will have a noticeable impact on the need for more capacity, our data suggests a much smaller impact. Product numbers, titer and market share are only a few of the factors which we believe play a role in what we see as the minor impact biosimilars will have on the overall demand for biopharmaceutical capacity.
For there to be a major impact on demand for global biopharmaceutical manufacturing capacity, there would have to be a significant increase in the number of biopharmaceutical products – obviously the number of products on the market or in development define the capacity required to produce them. Within our Biopharmaceutical Product Database, the current biopharmaceutical market and pipeline has approximately 800 products, so for biosimilars to increase the capacity demand by 50%, we estimate that 400 biosimilar products would need to be in development. Although we are seeing an increase in the number of biosimilars in development, we are certainly not seeing the number of products that would create that magnitude of an increase. Even taking the 2018 “patent-cliff” into consideration, there are nearly 30 biologics eligible to be translated into biosimilars, inferring at least 12 biosimilars for each eligible product. For the sake of argument, if several biosimilar products were developed for every one of those “patent-cliff” products – would they gain a significant foothold in the market? This has not been the case for initial biosimilar products launched in Europe, including erythropoietin (EPO) and human growth hormone (hGH), where their market share has been relatively small. According to IMS Health, biosimilar EPO has captured nearly 60% in Germany; however biosimilar hGH accounts for only 4% of the market. Why would the US market be significantly different?
While we do not dispute that there are many companies developing biosimilars, the number of biosimilars in development is nowhere near the number necessary to significantly impact the global biopharmaceutical pipeline and in turn significantly impact the capacity demand for manufacturing. Further supporting this minimal impact on manufacturing is the trend of increasing titers. Even if there were a slight increase in titers for biosimilars, this would only lessen the capacity demand – the higher the titer, the less capacity the product requires.
BPTC understands the concern for a potential capacity shortage is real, however we do not believe that a capacity shortage will be caused by biosimilars. Who can possibly forget the shortage of manufacturing capacity that sent shockwaves through the biotech industry – Immunex’s capacity shortage for manufacturing Enbrel which caused a rationing to rheumatoid arthritis patients because of the unexpectedly high demand? A similar event is not likely to occur as a result of an increase in biosimilar development as there are relatively few biosimilar products in development compared to the number of innovator products in development, titers continue to increase and significant market share for biosimilars is questionable. So, will biosimilars really have an impact on global capacity demand? We think not.