Biosimilars are biopharmaceutical drugs that are highly similar to Food and Drug Administration (FDA) approved biological drugs, known as reference product biologics. Biosimilars provide effective therapeutic treatments for various diseases at a lower cost as compared to their reference biologics. The growing prevalence of chronic diseases and rising healthcare expenditure are fueling the demand for affordable biosimilars globally.
Market Opportunity:
Lowering Healthcare Costs
One of the major market opportunities for biosimilars is their potential to lower healthcare costs significantly. Biosimilars have the ability to reduce the cost of biologic drugs by 30-50% as compared to their reference biologics. This offers considerable savings to healthcare systems and enables improved access to life-saving biologic drugs for patients. As per estimates, biosimilars can potentially reduce healthcare spending on biologics by over $54 billion by 2024 in the U.S. alone. Their cost-saving ability makes biosimilars an important option for healthcare payers and providers globally. Increased adoption of biosimilars would allow shifting of significant healthcare resources to other areas of need and widen access to treatments.
Porter’s Analysis
Threat of new entrants: The biosimilars market requires high R&D investment and regulatory approvals which reduces the threat of new entrants. However, patent expiries of some blockbuster biologics provide opportunities.
Bargaining power of buyers: The bargaining power of buyers is moderate as the industry has several buyers in the form of hospitals, pharmacies, and patients. Buyers can negotiate on price and demand value-added services.
Bargaining power of suppliers: A few dominant players control the supply of biologics and biosimilars which gives them strong bargaining power over buyers. However, market entry of new players may balance the power.
Threat of new substitutes: Threat of substitutes is low as biosimilars have few alternatives in their therapeutic categories. However, focus on specialty areas could increase competitive pressure.
Competitive rivalry: The market sees intense competition among large players due to high R&D and patent challenges. Firms differentiate based on molecule competition and regional expansion.
SWOT Analysis
Strengths: Biosimilars offer cost savings compared to biologics. Developing regions provide high growth opportunities.
Weaknesses: Regulations and IP protections delay market entry. Manufacturing complexity increases costs.
Opportunities: Patent expiries of major biologics until 2023 create scope. Emerging Asia-Pacific and Latin American markets to drive volumes.
Threats: Pricing pressures due to reference biologic makers. Intense competition and need to invest in innovations.
Key Takeaways
Global Biosimilars Market Size is expected to witness high growth led by the United States, Germany, United Kingdom and Japan.
Europe dominates with over 50% market share led by Germany, France, and the UK. Availability of reimbursement, increasing patient acceptance, and regulatory incentives drive the European market. The Asian market is fastest growing due to expansion strategies of global players and growing healthcare investments in China, India, and South Korea.
Key players operating in the biosimilars market are Sandoz International, Biocon, Pfizer, Amgen, Celltrion, Samsung Bioepis, and Dr. Reddy’s. Players focus on expanding their product portfolios and global footprints through collaborations and acquisitions.
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