Biosimilars CEOs: Opportunities Abound, but Regulatory, “Branding” Hurdles Remain

The biosimilars and generic drug industry is positioned for explosive growth, with $450 billion in pharmaceuticals coming off patent over the next decade amid an outcry in the United States over the cost of drugs.

And yet, there remains plenty of risk in the US market due to regulatory and legal hurdles—not to mention a combative political environment, according to executives who gathered last week during the “CEOs Unplugged” session at Access! 2022, held by the Association for Accessible Medicines (AAM) in Orlando.

“We've got no shortage of product opportunities and pipeline opportunities as an industry,” said Richard Saynor, CEO of Sandoz, as he offered a glimpse of the challenges ahead.

Dan Leonard, president and CEO of AAM, moderated the session that also featured Sven Dethlefs, PhD, executive vice president, North America Commercial, Teva; Vinita Gupta, CEO for Lupin Limited; and Chirag Patel, president and co-CEO, Amneal Pharmaceuticals.

Panelists first reflected on how their companies were moving forward from the pandemic, which caused havoc in supply chains and created challenges in keeping employees safe while delivering products. As group, the leaders praised their companies for responding to the challenges, which now include inflationary pressures. Leonard said the industry deserved credit for managing a supply chain that did bend, “but did not break.”

Teva’s Dethlefs said supply chain worries aren’t over. “I think we will face another 2 interesting years, even when the pandemic is behind us, it will somewhat continue through the procurement organization,” he said.

Leonard then turned to the generic and biosimilar pipeline. Dethlefs said the next decade could be as fruitful as the last one, for companies with careful strategy. “That requires generics companies to be more selective, to pick the right portfolio—because you cannot put a new granulation suite or manufacturing line behind every product,” he said. “That's not possible with the margins we earn.”

Dethlefs and Sandoz’s Saynor said the FDA approval process continues to lag Europe; while Gupta sees communication with FDA as much improved over the past decade, it’s come at a price in user fee costs. But a bigger challenge for biosimilars, Saynor said, is gaining acceptance in the US market, which means “getting payers and insurance companies to accept biosimilars,” the way generics have become part of the landscape.

“The US particularly presents a unique set of challenges that you just don't see from a European point of view,” said Saynor, who was taking part virtually from Switzerland.

Gupta and Patel agreed that complex generics offer the best opportunities, but as Patel explained, the risks are great, and the margins are small.

“Each biosimilar, each complex generics sometimes takes 5 years, 7 years,” he said. The returns to maintain investment in research and development are more than 10%, and the technology investment comes after that. “These are all risks. And we can do that if we are in the business.”

Leonard asked the group to reflect on the industry’s reputation: why, he asked, does the biosimilars industry face so many regulatory and legal hurdles when it saved US taxpayers $386 billion in 2021?

“Well, I’m going to use the term branding,” Patel said. “We have not done that effectively. We have to find new ways—it hasn’t been effective…. Look, we have the best story to tell. We just need to find the best storyteller to tell the story.”

As members of Congress get more and more calls for constituents upset about drug prices, he continued, “We don’t control it, so we shouldn’t, as an industry, take all those hits.” Generics, he said, have been portrayed by some as “bad guys,” when in fact, “We’re not. We’re actually good guys.”

Gupta agreed. She lamented the fact that President Joe Biden gave an extended speech on the high cost of drugs, yet the generic and biosimilars industry “does not come up once in that conversation.”

“Folks, we are the solution,” she said. “Look at the savings we bring.”

Going forward, Gupta said, the generics and biosimilars industry must be highly focused. Technology, she said, creates new pressures to avoid mistakes—that means picking the right products to develop and working closely with US and European regulators to get them approved.

“The hallmark of a successful generic company is strong planning, execution and efficiency. And in the past, you [could] do with 2 of the 3, and still be able to make reasonable return and continue to invest in a pipeline,” she said. “But not today. Now, you need to really be excellent at all 3 to be able to run the business.”