Isu Abxis • Established in 2000 As a Subsidiary of Isu Chemical Co
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A Special Thanks To Today’s Sponsor: Ropes & Gray, LLP The Evolving Biosimilars Landscape: Is the US Ready for the Opportunities and Challenges? New York Pharma Forum Robert Rouse, Senior Principal Paul Villa, Senior Principal May 13, 2015 Content • The Opportunity • The European Experience • The US Challenges • Conclusions The Evolving Biosimilar Landscape: Opportunities & Challenges 2 May 13, 2015 Pharmaceutical spending continues upward with an estimated 3-6% global CAGR through 2020 Major Markets Spending and Growth on Pharmaceuticals 2010-2020 China 1000 30% Opportunity 900 Japan 25% 800 EU5 700 20% 600 15% USA 500 10% USA growth 400 300 5% EU5 growth SPENDING US$BN US$BN SPENDING 200 0% US$% CONST GROWTH Japan growth 100 0 -5% China growth 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Forecast USA, EU5, Japan, China constant dollar growth Source: IMS Market Prognosis Apr 2015; (*) at ex-manufacturer price levels, not including rebates and discounts The Evolving Biosimilar Landscape: Opportunities & Challenges 3 May 13, 2015 Biologics growth continues to outstrip total pharma, showing a steep increase on 2013 Such a trend is putting additional financial pressure on healthcare budgets Global Market Trends Biologics – 2014 Share of sales Sales and Growth Opportunity 250 12% 21% 51% 10% 200 6% 8% 10% 150 12% 6% EU5 Japan Pharmerging ROW US 100 4% Growth, LCUS$ Sales, Sales, US$ billions 50 Biologics – Share of 5 yr growth 2% 15% 0 0% 55% 6% 2008 2009 2010 2011 2012 2013 2014 Biologics Sales Biologics growth 14% Small molecule growth 11% Source: MIDAS IMS Health, MAT Q3 2014, Rx; Brazil and Mexico Non Retail Sales are included; Share of growth in LC$ The Evolving Biosimilar Landscape: Opportunities & Challenges 4 May 13, 2015 Biologics increasingly feature as key therapies Payers see their costs increasing Global top 10 products 2009-14 Opportunity 2009 2010 2011 2012 2013 2014 1 LIPITOR LIPITOR LIPITOR SERETIDE HUMIRA HUMIRA 2 PLAVIX PLAVIX PLAVIX CRESTOR SERETIDE LANTUS 3 NEXIUM SERETIDE SERETIDE HUMIRA CRESTOR ABILIFY 4 SERETIDE NEXIUM NEXIUM NEXIUM ENBREL SERETIDE 5 SEROQUEL SEROQUEL CRESTOR LIPITOR NEXIUM ENBREL 6 ENBREL CRESTOR SEROQUEL ENBREL ABILIFY CRESTOR 7 REMICADE ENBREL HUMIRA REMICADE REMICADE REMICADE 8 ZYPREXA REMICADE ENBREL PLAVIX LANTUS NEXIUM 9 CRESTOR HUMIRA REMICADE ABILIFY CYMBALTA SOVALDI 10 SINGULAIR ZYPREXA ZYPREXA LANTUS MABTHERA MABTHERA Small molecule products Biologic products Source: IMS Health, MIDAS, MAT Sep 2014 The Evolving Biosimilar Landscape: Opportunities & Challenges 5 May 13, 2015 It’s the loss of exclusivity that drives biosimilar interest All these products will lose patent protection by 2020 (except Enbrel in the US) Global Sales (MAT 06/2014), US$ billion EU expiry date US expiry date Opportunity 10.8 Adalimumab (Humira) 2018 2016 9.2 Insulin Glargine (Lantus) 2015 2016 8.3 Etanercept (Enbrel) 2015 2028 (extended) 7.9 Infliximab (Remicade) 2015 2018 6.4 Rituximab (Mabthera) Expired 2018 6.3 Insulin Aspart (Novomix, Novorapid) Expired Expired 5.9 Bevacizumab (Avastin) 2019 2019 5.5 Interferon Beta-1A (Avonex, Rebif) 2015 2016 Expired 2019 5.3 Total Trastuzumab (Herceptin) 4.6 ~ US$ 79 Glatiramer Acetate (Copaxone) 2017 2015 billion 4.5 Pegfilgrastim (Neulasta) 2015 2015 4.5 Ranibizumab (Lucentis) 2016 2016 0 5 10 15 Not considered existing biosimilars such as Epoetin Alfa expired in EU, but still patent protected in the US Source: IMS MIDAS, 06/2014, Rx bound, IMS Patent focus The Evolving Biosimilar Landscape: Opportunities & Challenges 6 May 13, 2015 Globally, an upside potential up of $25bn in 2020 presumes a developed US market Biosimilars market evolution, 2011 - 2020 2015 2020 Share of biologics Opportunity $1.9bn – $2.6bn $11bn – $25bn market - 2020 30 • Slow uptake in the US due to • Key upside drivers represented 25 new legislation enabling by the US biosimilar market: innovators to delay the US holding ~54% market value 25 10% approval process of new by 2020 biosimilars 20 • Europe to hold ~25% market • Uptake in Europe accelerates value by 2020, if US fails to 20 8% 15 due to more mature take off Europe increases in framework accounting for importance 35-41% market value by 10 2015 11 4% • Emerging countries (Asia 5 specifically) ramping up Biosimilar Biosimilar market size, $LCbn - 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Lower Bound Base Case Upper Bound Source: IMS analysis on MIDAS data, Extrapolation of MIDAS data, Price cut set at 40-50%, uptake curves based on analogues and evidence from marketed biosimilars The Evolving Biosimilar Landscape: Opportunities & Challenges 7 May 13, 2015 Content • The Opportunity • The European Experience • The US Challenges • Conclusions The Evolving Biosimilar Landscape: Opportunities & Challenges 8 May 13, 2015 At the end of 2014, nine distinct biosimilar products were being marketed in the European Union Generic/ Decision Trade name Company Decision Common name date(s) Somatropin Omnitrope® Sandoz 12-Apr-06 Approved Opportunity ® Binocrit Sandoz Epoetin alfa Epoetin alfa Hexal® Hexal 28-Aug-07 Approved Abseamed® Medice Retacrit® Hospira Epoetin zeta 18-Dec-07 Approved Silapo® Stada Tevagrastim® Teva EU Experience EU Filgrastim Ratiograstim® Ratiopharm 18-Sep-08 Approved Biograstim ® CT Arzneimittel Zarzio® Sandoz Filgrastim 6-Feb-09 Approved Filgrastim Hexal® Hexal Filgrastim Nivestim® Hospira 10-Jun-10 Approved Filgrastim Grastofil® Apotex 18-Oct 13 Approved Inflectra® Celltrion Infliximab 10-Sep-13 Approved Remsima® Hospira Follitropin alpha Ovaleap® Teva 27-Sep-13 Approved Eli Lilly/BI biosimilar insulin glargine of Sanofi “Lantus” product has received marketing authorization but cannot launch until expected 5/2015 patent expiry Source: European Public Assessment Reports. Published on EMA Website The Evolving Biosimilar Landscape: Opportunities & Challenges 9 May 13, 2015 Penetration of biosimilars across different therapy areas has been variable for a number of reasons Stakeholder landscape – payer-driven vs. multiple influencers – and treatment cycle are the key determinants Filgrastim uptake Somatropin uptake 2007-2013, yearly 2007-2013, yearly Opportunity Commodity market Differentiated market 100% 100% 80% 80% 60% 60% 40% 40% EU Experience EU 20% 20% 0% 0% % Uptake, DDD Uptake, % DDD Uptake, % 2007 2008 2009 2010 2011 2012 2013 T0 T1 T2 T3 T4 T5 T6 FRANCE GERMANY ITALY FRANCE GERMANY ITALY SPAIN UK SPAIN UK Payer-driven market access (e.g. Tender, step- Complex stakeholder landscape with higher wise algorithms) physician influence Price-driven competition Competition based on multiple marketing levers Acute treatment and/or frequent cycling among Chronic treatment and/or long therapeutic therapies cycles Source: IMS MIDAS year 2013. (*) Uptake is defined as penetration of accessible market. This includes reference and non reference prods The Evolving Biosimilar Landscape: Opportunities & Challenges 10 May 13, 2015 What really drives biosimilars uptake? Sets the market environment Best evidence Payer for other stakeholders learnings Environment Maximum biosimilar uptake could be achieved if a national single Opportunity sourced tender for coverage of the entire therapy area is implemented EU Experience EU Drivers? Price Clinical/Device Differential Innovation Moving patients to the next Doesn't always correlate to standard of care biosimilar uptake Second generation products have in Actions taken by manufacturers in some cases had significant impact: specific markets are observed as - Sometimes by strategic pricing having an impact on biosimilar - Sometimes by recognized value or uptake and affecting the competitive improved outcomes environment Source : IMS Health insight The Evolving Biosimilar Landscape: Opportunities & Challenges 11 May 13, 2015 To what extent has usage shifted to 2nd generation products? EPO: Uptake of 2nd Generation in the Total Market (% of treatment days 2013) • For EPO’s, patent protected Opportunity 100% 96% 2nd generation products are 90% available 80% • Denmark has low uptake of 70% 63% 59% EPO biosimilars as the 60% market shifted to 2nd EU Experience EU 50% 45% generation 42% Successful originator 40% 31% strategy 30% 20% 17% • Differently in Italy and Poland, market remained on 10% first generation EPO 0% Originators are Poland Italy Spain Germany France UK Denmark successfully competing with pricing strategy The Evolving Biosimilar Landscape: Opportunities & Challenges 12 May 13, 2015 Infliximab biosimilar has shown strong uptake in tender markets but much more moderated in others Infliximab Monthly uptake Infliximab Monthly uptake Normalised uptake Cumulative uptake (last 3 months)* 80% 70% Dec’14-Feb’15 60% POLAND 46% 50% Tender markets NORWAY 36% 40% HUNGARY 20% Uptake, TD Uptake, 30% CROATIA 19% 20% CZECH 11% 10% FINLAND 9% 0% ROMANIA 9% T5 T0 T1 T2 T3 T4 T6 T7 T8 T9 T11 T12 T13 T14 T15 T16 T17 T10 SLOVAKIA 4% CROATIA CZECH FINLAND IRELAND 3% HUNGARY IRELAND NORWAY POLAND ROMANIA SLOVAKIA Will Infliximab biosimilar be used instead of the originator? Will it impact the usage of other anti-TNFs such as Humira and Enbrel? Will MABs be used more widely? Source: IMS MIDAS monthly Feb 2015. Penetration calculated in treatment days (TD); *Bulgaria and Latvia excluded because only biosimilar manufacturers present; Hungary excluded as biosimilar penetration not captured from Nov 2014 The Evolving Biosimilar Landscape: Opportunities & Challenges 13 May 13, 2015 Content • The Opportunity • The European Experience • The US Challenge • Conclusions The Evolving Biosimilar