In order to gain a larger share of the U.S. therapeutics market, biosimilars will need to overcome numerous challenges involving pricing and competition, naming conventions, formulary decision, delivery devices, and understanding the nuances of the market, a panel at the recent Biosimilars 20/20 conference in Philadelphia reported.

Steven MillerPricing is key to wider acceptance of biosimilars, yet the U.S. market has been reluctant to embrace discounts as a tool for building market share, said Steven Miller, MD, MBA, senior vice president and chief medical officer, Express Scripts.

“America isn’t really leading the charge here,” he said. “You’ve had biosimilar products in Europe now for nine years, and they’ve had enormous discounts.”

See also: Biosimilars' cost savings unknown

Development 

Robert StianchiDevelopment costs are a key element of pricing, said Robert Stianchi, director of market research for Merck’s Biosimilars Business, adding that development costs for biosimilars far exceed generics but also lag far below those of branded biologics.

See also: New forum created to expand access to biosimilars

Merck data shared by Stianchi revealed the relative costs of development:

• Generics require two to three years to bring to market, at a cost of $2 million to $3 million
• Biosimilars require seven to eight years, at a cost of $100 million to $150 million
• Biologic innovator drugs take up to 10 years to bring to market, at a cost of $800 million

Manufacturing

Manufacturing costs, which Miller characterized as “really trivial,” play another key role in the pricing of biosimilars.

The average per-gram manufacturing cost of eight biological drugs averaged $231, and the average cost of manufacturing amounts to 2.3% of the retail price, according to 2008 data from Bernstein Research.

A 2012 CVS Health study reported that the 11 leading biosimilar agents alone could reduce overall healthcare spending by about $250 million between 2017 and 2022, he said.