Clinical Regulatory Changes One Of Many Tailwinds For Biosimilars
By Joseph Pategou
Five years ago, the global biosimilar market was valued at $11.8 billion and was expected to grow to $35.7 billion by 2025 at a compound annual growth rate (CAGR) of 24.7%. At the time, Europe led with 54 approved biosimilars, followed by the U.S. with 23, Japan with 18, and Canada with 17, according to a report from the International Generic and Biosimilar Medicines Association.
This forecasted rapid growth was attributed to several key factors. The patent expirations of major biologic products opened the door for biosimilar development, while the launch of new biosimilars and the rising incidence of chronic disorders drove market demand. Additionally, new market participants contributed to the competitive landscape, and private equity investment also became a crucial driver.
Today, the dynamics of biosimilar approvals have shifted significantly. According to the IGBA’s November 2024 report, Singapore now leads globally with 146 approved biosimilars, followed by India with 128 and the European Union with 110. In the Americas, Brazil leads with 65 approvals, trailed closely by Canada with 64 and the United States with 60. In Africa, notable leaders include Egypt with 56 approvals and South Africa with 31.
Despite these shifts, Europe remains the global leader in biosimilar utilization, accounting for over 50% of the global market. Since 2006, 5.8 billion patients have been treated with EU-approved biosimilars. By 2028, biosimilars are expected to represent more than 50% of the off-patent competition in Europe. Furthermore, the economic impact has been substantial: cumulative savings from biosimilar medicines in Europe reached €50 billion between 2006 and 2023, with €10 billion saved in 2023 alone.
While one factor alone cannot and did not contribute to the market shift over the past five years, one significant factor, with the potential to have a long-standing impact on time-to-market and development costs, is regulatory requirements.
Regulatory Developments Transform Biosimilar Development
Significant regulatory shifts have reshaped the biosimilar landscape. In 2024, the FDA proposed guidance to eliminate the requirement for switching studies for biosimilars seeking an interchangeable designation. Additionally, the Centers for Medicare & Medicaid Services (CMS) announced that biosimilars could now be substituted during regular formulary maintenance changes, regardless of their interchangeable status.
In a groundbreaking move, the FDA has shown openness to waiving Phase 3 trial requirements on a case-by-case basis if pharmacokinetic (PK) and pharmacodynamic (PD) data strongly support clinical similarity. While this remains under discussion in the U.S., the U.K. has already discontinued the mandatory requirement for all biosimilars to undergo Phase 3 confirmatory efficacy trials.
These regulatory changes are expected to significantly impact the timeline and cost of developing biosimilars. Currently, biosimilar development costs range between $100 million and $300 million, with timelines spanning seven to eight years. Removing the interchangeability study could reduce costs to $75 million to $250 million and shorten timelines to six and a half to seven and a half years. If both interchangeability and Phase 3 studies are removed, the cost could drop to $50 million to $75 million, with development timelines compressed to five to six years.
To further promote innovation and market competition, the FDA has launched the Biosimilars Action Plan (BAP), aimed at streamlining development pathways for biosimilars and interchangeable products. Meanwhile, CMS has introduced a temporary payment increase under Medicare Part B for qualifying biosimilars, aiming to enhance access and utilization across the healthcare system.
Billion-Dollar Opportunity In Biosimilars
The biosimilar market presents a significant opportunity to drive competition in the biologics space, with over 1,000 biosimilars currently covering more than 10 therapeutic areas. Over the next decade, approximately $200 billion in revenue from 150 molecules will face the loss of exclusivity. Nine molecules will face intense competition due to their annual revenue exceeding $5 billion, which accounts for 45% of the total revenue pool.
According to Fortune Business Insights, the global biosimilars market is projected to reach $73.03 billion by 2030, growing at a CAGR of 17.3% during the forecast period. Europe is expected to remain the dominant market, holding more than 40% of the global share.
With notable changes in regulations, market growth, and approvals, the positive trend is set to continue, with over 110 new biologic medicines opening to biosimilar competition by 2032. Despite the potential, biosimilar adoption still faces challenges, including limited education among patients and healthcare providers, as well as regulatory hurdles such as complex approval processes and ongoing patent litigation.
References:
- Biosimilar Development. Private Equity: A New Pillar for Biosimilar Development?
- Biosimilar Development. The Opportunities & Challenges of India's Biologics Market
- Biosimilar Development. Africa’s Biosimilar Landscape: Outlook & Current Challenges
- Biosimilar Development. The China Biosimilars Market: Rise of a Potential Powerhouse
- European Medicines Agency (EMA)
- U.S. Food and Drug Administration (FDA)
- IGBA Membership and National Regulatory Authorities
- Medicines for Europe. Advancing Biosimilars to Improve Patient Access
- U.S. Food and Drug Administration. Biosimilars Action Plan
- Boston Consulting Group. Rising Tide Lifts U.S. Biosimilars Market
- AlphaSense. Trends in the Biosimilars Market
- Fortune Business Insights. Biosimilars Market Report
About The Author:
Joseph Pategou has authored over 30 articles in esteemed journals such as Cell and Gene Therapy, The Indian Economist, Labotech.eu, Drug Discovery & Development and others. A former consultant at Boston Consulting Group in New York, he has held and continues to hold operational roles in biopharma companies. The views expressed are his own. He holds an MBA from New York University and a master’s degree from HEC Paris.