|[October 09, 2013]
Fitch: Biosimilar Uptake Likely More Rapid in U.S. vs. Europe
NEW YORK --(Business Wire)--
The U.S. drug channel is likely to exhibit a higher acceptance of
biosimilars over time than Europe, according to Fitch Ratings. We expect
that acceptance of biosimilars will be stronger in the U.S., although
uptake may be fairly slow at first.
This expectation is supported by a relatively efficient traditional drug
market characterized by rapid branded-to-generic conversions leading to
estimated generic penetration rates in excess of 80%. Third-party payors
and the pharmacy benefit managers (PBMs) that serve them are generally
well incentivized to reduce costs and therefore instrumental in driving
generic conversions. Biosimilar substitution will likely offer an even
more compelling opportunity for these players on a drug-by-drug basis to
reduce drug spending than that of traditional small molecule drug
market. Payors will be aggressive in achieving these potential cost
Acceptance will be driven by the unique role that payors and PBM serve
in driving rapid brand-to-generic conversions. However, we note that
physician involvement will be key, possibly limiting the rate at which
biosimilars capture market shares.
The first biosimilars were launched more than seven years ago in Europe.
Anecdotal and empirical evidence suggests that the uptake of these drugs
is growing, but remains relatively tepid so far. Several factors
contributing to this trend generally includes the novelty of biosimilars
and the associated scientific limitations, combined with many of the
same factors that have led to historically lower generic acceptance on
the part of European doctors, pharmacists, and patients.
It is possible that biosiilars' lower prices could drive incremental
drug volumes. Some market participants indicate that this phenomenon has
been observed in key European markets following biosimilar launches.
Increased volumes would likely further enhance the profitability of
biosimilars, especially for specialty distributors as it would allow
them to leverage their economies of scale and highly fixed-cost
The full report, "Trekking the Path to Biosimilars - The Destination" is
available at www.fitchratings.com.
This is the fourth and final report in a series dedicated to the
burgeoning global biosimilars market.
Additional information is available on www.fitchratings.com.
The above article originally appeared as a post on the Fitch Wire credit
market commentary page. The original article, which may include
hyperlinks to companies and current ratings, can be accessed at www.fitchratings.com.
All opinions expressed are those of Fitch Ratings.
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