Merck KGaA pushes biosimilars
pharmafile | February 12, 2014 | News story | Research and Development, Sales and Marketing | Dr Reddy's, Merck KGaA, biosimilars, dr reddys, generics
Merck KGaA is to take big strides into the world of biosimilars, according to the German company’s chairman Karl-Ludwig Kley.
In an interview with the UK’s Financial Times, he said Merck had “all the capabilities to compete in biosimilars” and suggested that governments’ desire to lower drug costs will lead to significant growth in this class by “the second half of this decade”.
Ana Nicholls, healthcare analyst at The Economist Intelligence Unit, said Merck can “count on encouragement from the German government, which is particularly keen to encourage generic usage”.
Kley believes biosimilar copies of established biologic drugs are attractive since they will bring in a higher margin than simpler generics would.
“Given the lower levels of competition in the biosimilars market, the copies tend to be priced at just 20-30% below the original drugs, compared with around 90% below for traditional generics,” Nicholls agreed.
The Darmstadt-based group signed deals last year to work on biosimilars with Brazilian firm Bionovis and India’s Dr Reddy’s Laboratories.
Yet while biosimilars have been predicted to be a major growth market, complexities in their development and manufacture – as well as uncertain regulatory routes in some markets, such as the US (which has yet to approve any biosimilars) – have meant they remain a somewhat risky venture.
“Europe established a regulatory pathway for biosimilars back in 2005, but though there have been several approvals since then, the market has failed to live up to expectations,” Nicholls points out.
Last year escalating costs led Teva and contract manufacturing organisation Lonza to abandon a joint venture set up in 2009 to develop, manufacture and market biosimilars – and Merck itself pulled out of a similar deal with Enbrel in 2012.
But they remain an enticing prospect for pharma companies: Roche has just taken legal action in India to restrict the marketing activity of Biocon and Mylan, which have produced their own biosimilar version of breast cancer brand Herceptin.
Kley told the Financial Times: “We do not think the market will be as crowded as in generics because it is harder and more costly to achieve the required quality.”
Adam Hill
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