Wednesday, November 7, 2012

Biosimilars: A Threat to Amgen

The leading pharmaceutical and biotech companies seem to be overwhelmed by the problem of biosimilars. One of those giants is Amgen that stands on the precipice of losing its lucrative monopoly.
For 23 years Amgen has sold its drug –Epo to increase red blood cell levels in patients with severe anemia.  Today, this drug faces severe competition from biosimilars in its European market. Biosimilars are generic versions of complex biological medicines. Biosimilars are not available in the U.S. until the Patents on the drugs expire, this provides Amgen’s Epo and its other drugs with a monopoly that it does not have in Europe and other parts of the world where biosimilars are alloed to be marketed before the patent expires.

Neupogen and Neulasta
The Biosimilars’ problem is not only restricted to Epo. Neupogen and Neulasta are drugs manufactured by Amgen to treat neutropenia, a condition in which the body makes too few white blood cells. The Patents on these expire in 2015. This protection has ensured a consistent rise of sales in the U.S for the last three years. However, this is not true for the rest of the world. Amgen’s worldwide sales of Neulasta/Neupogen for 2011 were $5.2 billion. This is a 15% drop from 2010 which itself was a drop from 2009. Amgen’s Neupogen is still the bestselling Neutropenia drug worldwide but, the other biosimilar companies are racing to catch up.
In Europe Zarziomade by Sandoz, the generic subsidiary of Novartis and Nivestim made by Hospira are both biosimilars for treating Neutropenia. Sandoz's goal is to create the no.1 franchise for treating Neutropenia. It is currently running a study to compare the effectiveness of Amgen’s Neupogen and its own drug. Other companies that have biosimilars for Neutropenia in the pipeline include, Merck, Apotex, Reliance Life Sciences and Biocon.

Amgen’s Reactionary Strategy
Amgen’s strategy going forward is to create biosimilars to its competitiors’ products. It has partnered with two market biosimilar to market a biosimilar version of Roche’s blockbuster breast cancer and gastric cancer drug Herceptin. This seems to be a reactionary strategy by Amgen to compensate for its lost market share. The growing, global biosimilar market is touted to be somewhere between $11 -$25 billion by 2020. This will benefit the end users by reducing the cost of healthcare. The healthcare savings for 8 European countries is  estimated to be EUR 11.8 billion ($14.5 billion) and EUR 33.4 billion ($41.0 billion )  by 2020.

Questions: Do you think it’s a good idea for Amgen to get into the biosimilars market? Are there any alternate strategies that Amgen could adopt to overcome the threats posed by Biosimilars?


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