Evolving regulatory environment against the industry's interests
This threat corresponds to the lack of credibility in the policy forming community, as well as the lack of credibility as
Regulatory authorities design regulations considering arguments of various stakeholders and based upon various policy goals.
As described above, the lack of longterm clinical experience as well as the lack of proven longterm viability as an industry
weakens the stand of the biosimilars industry when trying to influence policy setting process in its favour. A small company
may not have the influence to impact the policy setting process, but indirectly; for example through industry associations.
Small companies should participate in this process.
Also, small companies can and must navigate the evolving regulatory environment. A continuous dialogue with the authorities
initiated very early in the development of a biosimilar will especially help to correctly define targets and develop the product
to the authorities' expectations. There are also very supportive instruments available for small companies, such as the SMEStatus
from the EMA, which then opens doors for informal interactions with the authority.
Technology improvements and shifts
A biosimilar is designed to be similar — neither inferior nor superior — to the reference product. Once technology improves
to yield better products (e.g., biobetters) or the industry adopts a new gold standard therapy for a particular condition,
it will be difficult for the biosimilar that is based on a previous technology generation to compete. The pricing argument
of a biosimilar and eventually its other differentiation arguments will only marginally close the gap, but the gap itself
In the presence of such a situation, there is an obvious need to consider methods of diversifying risk. Regarding the threatened
product it may well be worth considering marketing the drug into lower margin markets because these may not yet be ready to
finance the latest technology change.
Intellectual property domain
The originator industry with its long-standing experience in protecting its innovations tries to keep biosimilar competition
out of the market through comprehensive intellectual property strategies. Eventually the core of a drug — its molecule — may
come off patent, but this does not mean that biosimilar manufacturers are then free to compete. Originators build defensive
IP walls around every aspect of the molecule. The first wall after molecule protection relates to up- and down-stream processing.
The next wall surrounds the formulation, and then come protection attempts around essential analytical methods. The latest
wall, only applicable in certain jurisdictions, would be around the designated use of a drug. For smaller, less financially
stable companies, the prospect of a long, risky and costly patent litigation battle may prove too heavy a burden to carry.
Before initiating the development of a biosimilar, a small company should well invest in freedomtooperate (FTO) analysis.
Attorneys may be expensive, but patent attorneys are definitely worth their rate and may save the small biosimilar manufacturer
a fortune. Special attention should be paid to the diverse levels of protection that the originator is building around a molecule.
Such FTO analysis also needs a very concise plan throughout the development and supply chain as a requisite to help the attorney
assess the IP related risks throughout the processing stages of a product.