publication date: Feb. 6, 2015

Conti: Don’t Count on an 80% Price Drop From the Launch of Neupogen’s Biosimilar

 

Introduction of biosimilar biologics will not bring about the same price drops as introduction of generic small-molecule drugs, said Rena Conti, an economist at the University of Chicago, whose work focuses on drug pricing.

With small-molecule drugs, price drops within two years of patent expiration and the introduction of generics can amount to 80 to 90 percent off the branded price.

The price drop for biologics when biosimilars enter the market will be less dramatic, in part because only a small number of companies have the ability to produce these agents, reducing the competitive pressure that drives down prices. In addition, the costs of manufacturing biosimilar agents is higher than those associated with manufacturing generic small-molecule agents.

The Cancer Letter asked Conti, an assistant professor at the University of Chicago Department of Pediatrics in the Section of Hematology/Oncology and Public Health Sciences, to trace the manner in which any cost savings from biosimilar agents would reverberate through the U.S. drug distribution system.

Two factors complicate the price drops from biosimilar biologics:

“The first is that there are not that many manufacturers that have the scale and knowledge to make injectable or infused drugs with similar requirements to biologics,” Conti said.

“The big companies supplying the U.S. market with generic infused and injectable drugs are Hospira, Fresenius and Teva. There have also been some significant mergers and acquisitions between branded and generic pharmaceutical companies in recent years. Just this past week, Pfizer announced they were purchasing Hospira.

“That implies to me that we may not see a lot of … Continue reading 41-05 Conti: Don’t Count on an 80% Price Drop From the Launch of Neupogen’s Biosimilar

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