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Biosimilars in global markets
Emerging markets may be key to long-term growth
Analysts expect the worldwide biosimilars market to reach approximately $35 billion by 2020.ͥ While developed markets will remain important for biosimilars manufacturers, Deloitte analysis indicates that long-term growth may be fueled by emerging markets. To remain competitive, manufacturers should develop a global biosimilars strategy that includes “where to play” and “how to win.”
- Download the report
- Where to play
- Figure: Key themes in emerging markets
- How to win
- Figure: Strategies for success in emerging markets
Considerable opportunity exists in emerging markets
Over the past several years, biologics have gained significant traction in the pharmaceutical industry, representing more than $150 billion in global sales in 2013. By 2020 biologics are predicted to generate $290 billion in revenue and comprise 27 percent of the pharmaceutical market.ii Forty-eight percent of sales come from 11 biologics that face loss of exclusivity over the next seven years.iii This, along with the increasing worldwide focus on improving health care access and the cost of care, presents an attractive opportunity for biosimilars manufacturers.
While most players will want a presence in developed markets, a considerable opportunity exists in emerging markets. The large pockets of non-consumption and untapped demand – characterized by poor physical and financial access to currently high-priced biologics – may provide favorable long-term growth opportunities in these markets.
Although selling lower-cost biosimilars in emerging markets may appear to be a less attractive strategy than selling in established, developed markets, particularly for high-margin branded players, winning in these markets can help position biosimilars companies for long-term success.
Where to play
To develop a global biosimilars strategy, manufacturers will need to address a set of strategic choices – including “where to play” and “how to win.” In determining where to play, manufacturers must decide which regions present the greatest potential for growth in the near and longer term. To help guide them through this process, Deloitte conducted a deep analysis of the developed markets of the United States, EU5 and Japan, and emerging markets including the BRICS (Brazil, Russia, India, China, and South Africa) and MIST (Mexico, Indonesia, South Korea, and Turkey) countries.
The analysis focused on six dimensions: access to affordable biologics, regulatory pathway, payer acceptance, prescriber acceptance, patient acceptance, and biosimilars presence.
Developed markets, with the exception of the US, represent the greatest biosimilars presence today. In today’s emerging markets, biosimilars have little to no presence. However, the limited patient access to affordable biologics and the openness of physicians to low-cost therapies may offer potentially significant opportunities if the right strategy is in place.
Key themes in emerging markets
How to win
Biosimilars companies may need to adjust traditional business models in several ways when entering/expanding in emerging markets. For example, companies need to consider – What are each market’s unique characteristics and opportunities? What is the unique value proposition for stakeholders (including, physicians, patients, payers, and policy makers)? Which therapeutic areas (TAs) have the largest potential impact for the local population? To be successful in executing their winning strategy, companies will need to provide access to therapeutics, partner for local capabilities, and understand the importance of branding and building customer engagement in meaningful ways.
Winning in emerging markets poses considerable challenges, but the opportunity to create a market in many cases, along with the growth potential, should make it worthwhile for biosimilars companies to establish and/or expand in these markets. Assembling a long-term strategy that underscores how to win and where to play is an essential step to success.
i Allied Market Research, Global Biosimilars / Follow-on-Biologics Market, July 2014
ii IMS Health, Searching for Terra Firma in the Biosimilars and Non-Original Biologics Market: Insights for the Coming Decade of Change, 2013
iii Nature Biotechnology 32, 626–632 (2014)