Biosimilars in North America

ABSTRACT

The United States (US) is the world leader in the development of biopharmaceutical products. These new drugs, numbering about 200, are now losing patent protection and imitators are entering the market of comparable drugs, called biosimilars. According to a popular belief, these producers of biosimilars (erroneously called copycats) are everywhere, except in the United States. In North America, on both sides of the US border, the increase in the number of biosimilar producers is evident. In addition, although the US federal government tries to erect barriers against the entry of foreign-made biosimilars in the country, many states are lobbying the federal government and allowing the use of biosimilars. And biosimilars represent a very convenient ladder for emergent and industrial countries to learn the enigmatic routines of the pharmaceutical industry. Where this segment of the industry will be located is another matter.     

Heterogeneity in learning processes and the evolution of dynamic managerial capabilities as a response of emergence of biosimilar market: evidence from the Indian pharmaceutical industry

ABSTRACT

This paper examines heterogeneity in the response of Indian firms to the emergence of a new segment in the pharmaceutical generics market – biosimilars. The necessary diversity of the knowledge base and regulatory requirements underlying biosmilar products have created significant technological capability and market access challenges for Indian firms. This is but the latest development which adds to an existing catalogue of challenges including the decline of the traditional generics markets, regulatory hurdles in advanced country markets and failures in managing new drug development. Using case studies of three Indian firms we show that dynamic managerial capability is a key driver of heterogeneity in learning processes involved in acquisition of technological capabilities for biosimilars and market access strategies. It further highlights the important role of pre-existing capabilities in enabling and constraining the development of new biosimilar capabilities.     

Biosimilars in Germany: the emergence of a new industry in the light of the varieties of capitalism approach

ABSTRACT

Although lagging behind the USA in biologics, German firms are forging ahead in the emerging field of biosimilars. This development confirms earlier explanations of the differences in these industries given by the Varieties of Capitalism approach. With the recent differentiation in biopharmaceuticals, again, the differences in the institutional environment on both sides of the Atlantic are responsible for different dynamics. However, this time German companies are in the better position: the industry refers to a tradition of engineering capabilities in chemicals and pharmaceuticals. Additionally, European regulation introduced the world’s first regulatory framework, which moreover is designed in a progressive way concerning market admission.     

Economic impact of industry-sponsored clinical trials of pharmaceutical products in Austria

Abstract

Aims: Modern pharmaceutical product development is a long and complex process associated with significant investments by pharmaceutical companies. The innovative pharmaceutical industry accounts for the vast majority of expenditures in clinical trials of potential new pharmaceuticals and therefore generates economic activity within a country. The aim was to assess the far-reaching economic impact of industry-sponsored clinical-trials (ISCTs) of pharmaceutical products for the healthcare system and the national economy.

Materials and methods: The study approach was based on three analytical steps. First, a survey among 15 pharmaceutical companies in Austria was conducted to evaluate the annual number of ISCTs subdivided according to trial phase, therapeutic areas and associated employees. Second, the monetary value of treatments performed in ISCTs was calculated based on a sample of clinical-trial protocols. Finally, the macroeconomic impact, measured in terms of value-added and jobs created by the conducted ISCTs, was calculated using Input–Output analysis by applying an extended Leontief-model.

Results: The study demonstrated that €116.22 million spent in ISCTs generated a total value added of €144 million, €74 million direct, in 2018. Each year a medical treatment value of €100 million was financed through 463 ISCTs, with an average value of medical treatment of €37,068 per recruited patient. This represents a significant 0.3% of annual current health-expenditures. In summary, each Euro invested by the pharmaceutical industry in ISCTs generates €1.95 for the Austrian economy. ISCTs also created and secured employment in the extent of 2,021 full-time-equivalents, thus resulting in an employment multiplier of 1.66.

Conclusions: In conclusion, conducting clinical-trials by pharmaceutical industry—beside its importance in its own domain—results in tangible benefits and a positive macroeconomic impact that contribute to the sustainability of the Austrian healthcare system by complementing its limited resources. Furthermore, it is a non-negligible factor in locational and industrial policy.     

Demand uncertainty and foreign trade in the UK tobacco industry

The concern about the potential health harzards of various tobacco products in the UK has led many tobacco companies to exploit markets in underdeveloped countries. These markets are relatively safe since the health risks of tobacco are not yet fully known. The possibility, therefore, arises that domestic producers might exploit certain markets to provide a form of profit insurance, exporting surpluses when domestic demand is unexpectedly low. This study concentrates on the UK cigarette industry. However, similar analysis could be performed for any uncertain market where a certain alternative exists that can be exploited at relatively low cost.     

The effects of patent-law changes on innovation: The case of India's pharmaceutical industry

Recent patent-law changes in India's pharmaceutical industry provide opportunities to study changes of institutional and regulatory environments on innovation and social welfare in low-income markets. From 1972 to 2004 under its process-patent regime, India's pharmaceutical industry grew to become the world's fourth largest. Indian companies were becoming globally competitive in generics and clinical testing, and moving into product R&D. Researchers have debated the effects of India's new product-patent laws' effects on these trends. The authors cover the domestic characteristics and global competitiveness of India's pharmaceutical industry. They contrast data (from 2001 to 2004) on patents in India's process-patent regime with preliminary data (from 2005 to 2008) on patents in the country's new product-patent regime. They argue that Indian pharmaceutical companies have changed their decision-making in response to changed patent laws by moving from process to product research. However, the preliminary results indicate that these changes may have hurt domestic innovation. They conclude with strategic implications for the Indian pharmaceutical industry and highlight the need for research and public policy to establish optimal social returns from product-patent regimes.     

The Indian Challenge: The Evolution of a Successful New Global Strategy in the Pharmaceutical Industry

UK and European public policy has sought to encourage young biotechnology firms adopt American-inspired strategies. The venture-backed start-up associated with Silicon Valley and Route 128 in Boston, has been the preferred model. These policies have had limited success thus far. Indian companies are evolving indigenous business models that are achieving success within the pharmaceutical industry. Some Indian pharmaceutical firms, established initially as low cost suppliers, are investing in building innovative capabilities. This paper analyses the strategies and trajectories of a number of Indian pharmaceutical companies that are expanding successfully in Western markets. It assesses the local and international contextual factors that have underpinned the strategies and discusses relevant conceptual frameworks.     

A cost-effectiveness analysis comparing the originator follitropin alfa to its biosimilars in patients undergoing a medically assisted reproduction program from a French perspective

Objective: To assess the cost-effectiveness (CE) of the originator follitropin-α (Gonal-F) in patients undergoing a medically assisted reproduction (MAR) program in comparison to its biosimilars Bemfola and Ovaleap in a French context.

Methods: A CE model was developed for France with a National Health Service (NHS) perspective. Clinical, safety, and dosage data were derived from pivotal clinical trials that compared Gonal-F to Ovaleap and Bemfola. Costs pertaining to drugs, hospitalizations, specialist visits, and examinations were retrieved from the French Programme de Médicalisation des Systèmes d'Information (PMSI) hospital database, literature review, and French clinical experts using 2017?Euro tariffs. In order to test the robustness of results, deterministic one-way sensitivity analyses were carried out on the main variables to assess the impact of treatment cost, probability of birth, ovarian hyperstimulation syndrome (OHSS) rates, and dosage.

Results: The average incremental cost per live birth with OHSS and without OHSS was €259.56 and €278.39, respectively, for Gonal-F compared to the pooled biosimilars (i.e. Ovaleap and Bemfola). GONAL-F had an incremental efficacy of 0.06 over the pooled biosimilars. The incremental cost-effectiveness ratio for Gonal-F with OHSS ranged from €3,274.80 to €4,877.76 compared to the pooled biosimilars, owing to the additional live births reported with Gonal-F. Sensitivity analyses also supported results from the base case analyses, with Gonal-F being cost-effective or the dominant strategy in most cases.

Conclusion: Gonal-F seems to be a cost-effective strategy compared to its biosimilars Ovaleap and Bemfola, irrespective of the incidence of OHSS events, but further data are needed to confirm these results.     

Differential Effects of Rail Deregulation on US Grain Producers

The efficiency benefits of US rail industry deregulation have been widely documented. This research provides new insight regarding the accrual of benefits within the US grain industry. A study of rail grain rates from 1980 to 2000 finds railroads decreased rates for all grain shippers. The greatest gain in benefits was to producers in the most competitive market environments. Regions and products with less competitive transportation markets will become increasingly disadvantaged if the trend continues. Rail rates are a key determinant in grain market viability and producer profitability in these rail dominated markets.     

Network of Collaborations for Innovation: The Case of Biotechnology*

The 'life science' revolution related to the development of biotechnology affects many different markets. In the pharmaceutical business new drugs are continuously developed, tested, and submitted to governmental institutions for the required approval. In the agricultural business the so-called 'green revolution' is well under way with many new products designed in order to appeal to farmers or to consumers. The increasing pace of introduction of new biotech products—particularly drugs and agrochemical (Ag) foods—leads firms to look for collaborations in the different phases of the introduction process. Basing on an empirical study conducted on a sample of 27 organisations involved in the process of introduction of biotech products, the paper aims at comparing and contrasting the nature and the processes involved in inter-institutional collaborations occurring at various stages of new product development and commercialisation of new biotech products (particularly drugs and Ag foods).     

中国上市公司资本结构与企业价值的相关性研究：来自中国医药制药业A股上市公司的经验数据

合理的资本结构有利于公司行为的规范以及公司价值的提高,有利于实现股东财富最大化的财务目标。以中国医药制造业上市公司为例,通过对资本结构与企业价值的关系的实证研究,得出如下结论：中国医药制造行业的负债水平相对较低,而短期负债所占比重太大;资本结构与企业价值之间并不存在显著的相关关系。最后提出建议：医药制造业上市公司应该增加债务融资,尤其应该增加长期债务比重。     

Network of Collaborations for Innovation: The Case of Biotechnology

The ‘life science’ revolution related to the development of biotechnology affects many different markets. In the pharmaceutical business new drugs are continuously developed, tested, and submitted to governmental institutions for the required approval. In the agricultural business the so-called ‘green revolution’ is well under way with many new products designed in order to appeal to farmers or to consumers. The increasing pace of introduction of new biotech products—particularly drugs and agrochemical (Ag) foods—leads firms to look for collaborations in the different phases of the introduction process. Basing on an empirical study conducted on a sample of 27 organisations involved in the process of introduction of biotech products, the paper aims at comparing and contrasting the nature and the processes involved in inter-institutional collaborations occurring at various stages of new product development and commercialisation of new biotech products (particularly drugs and Ag foods).     

How technological innovation affects the structure of an industry: entrepreneurship evolution in the biotechnology and pharmaceutical industry since 1980

Challenges faced by the biotechnology and pharmaceutical industry, including reduced R&D productivity and the expiration of drugs that are high in demand, are recently being addressed through technological innovation. Such innovations are highly likely to change the structure and functioning of the industry. Since 2000, biotechnology and pharmaceutical companies have actively made strategic alliance, and technological innovations have changed the source of innovation from R&D to entrepreneurship within the industry. In this study, we identify the evolution of entrepreneurship and discuss the changes caused by technological advancements since 1980 by analysing patterns of exporting and acquiring technology data from Medtrack. Over difference period, biopharmaceutical firms have gained new knowledge and improved technology, and have implemented this newly acquired knowledge and innovation to introduce drugs to the market.     

Explaining the Generation and Performance of Intersector Technology Cooperation: A Survey of the Literature

Pharmaceutical companies are facing several major interrelated challenges, the most strategic being the decline in R&;D productivity resulting in empty product pipelines to replace products nearing patent expiry. A common response has been mergers and acquisition of competitors and biotechnology firms, but rather than resolving the problems, this has created new ones. While biotechnology promises to reshape the pharmaceutical industry, it too faces challenges: the industry as a whole is unprofitable and there is uncertainty regarding market acceptance of its products. This paper examines the current issues in the two industries, and describes a scenario process resulting in the development of a set of scenarios depicting four possible future paths along which the pharmaceutical industry may develop over the next 15 years.     

Translating European regulatory approval into healthcare uptake for biosimilars: the second translational gap

ABSTRACT

With 15 biosimilar molecules in 9 different molecular classes and currently marketed under 23 distinct brands, the European pathway for regulatory approval of biosimilars has been demonstrably tried and tested. The gap that now remains is the translation from regulatory assessment and approval to incorporation of biosimilars within our healthcare systems in Europe. Despite many efforts by regulators to reach out to clinicians, there remains a translational gap for biosimilars which need to be incorporated in healthcare pathways and understood by clinicians and patients. Only by bridging this gap will biosimilars fully play their role in healthcare for Europe.     

Markets and the non‐monotonic relation between productivity and establishment size

Abstract A model of monopolistic competition is presented in which the relation between the productivity and input size of producers is non‐monotonic and bell‐shaped. The model predicts that markets matter and the average size of the producers is directly scaled by the size of the market. An indirect effect increases the cutoff productivity, making the bell narrower in larger markets or when the transportation cost falls. Empirical evidence from the concrete industry and a few other 4‐digit industries supports the model’s predictions. The bell‐shaped relation has especially important implications on how size distributions are formed across localized versus globalized market industries.     

Pricing dynamics and product quality: the case of antidepressant drugs

The rising prices of pharmaceuticals have generated considerable, and often acrimonious, debate. Yet, there is little conceptual work or empirical evidence on pharmaceutical pricing strategies or on the time paths of these prices. This study provides a conceptual framework describing the interplay between quality and product differentiation in determining the preferred pricing strategy. We hypothesize that higher quality products will engage in price skimming strategies in markets where products are sufficiently differentiated, but will choose a market penetration strategy in markets that are less differentiated. We apply an empirical analysis to brand name antidepressants during the years 1999–2002, a market where differences in quality are modest. A nationally representative data set on drug utilization and expenditures is combined with a physician survey on the quality attributes of drugs to examine the effect of drug quality on pharmaceutical pricing strategies. Results indicate that higher quality antidepressants engage in a market penetration strategy, charging initially lower prices that rise over time. At approximately 6–7 years post-entry, prices of the antidepressant drugs examined converge. Prices of higher quality antidepressants continue to increase thereafter, eventually becoming the highest priced drugs in the therapeutic class. These findings are consistent with a market in which product differentiation is modest and consumers learn which drug works best for them through experience.     

Institutional Change and the Problems of Restructuring the Russian Fishing Industry

This article discusses how the transition from a planned towards a market-based economy has affected the Russian fishing industry. It is based on a series of studies of the Northwest Russian fishing industry, where evidence from its past role and functioning is contrasted with the current situation. The conceptual perspective drawn on is institutional theory, with a focus on higher-order institutions. One of the main findings is that the fishing companies stand out as the only surviving party in the game. The losers are the land-based fish processing industry, the mother ship and transport fleet, and the support structures, which depend on the activities generated by the prime production (fishing). It is argued that the new institutional arrangements necessarily force a new adaptation among the fishing companies, and suggested that some of the changes of the higher-order institutions have been less successful than initially assumed, as there still are several adverse elements in the Russian institutional arrangements that hinder further transition toward a marketbased economy.