TAIPEI, Taiwan – One of the more interesting questions in biopharma today is the direction in which the biosimilars market is headed. Speaking at the BioBusiness Asia Conference, part of BioTaiwan 2017, industry insiders shared their views on the outlook for this market, highlighting the state of flux and uncertainty that still defines the segment.

Allen Y. Chao, founding chairman of Watson Pharmaceuticals Inc., started the conversation with his overview of the biosimilars market. In his view, biosimilars, which are expected to constitute a $479 billion global market by 2024, are likely to follow trends exhibited by small-molecule generics.

"Twenty-five to 30 years ago, people thought the generic industry was not a real industry because it wasn't innovative," Chao said. "But it's a huge industry today and is saving people a lot of money. I think the same thing is going to happen with biosimilars as well."

Citing data showing that the market share of small-molecule generics in the U.S. had reached nearly 90 percent by 2015, Chao said he expects biosimilars to exhibit similarly strong growth going forward.

The main driver of that growth, he said, is a virtuous cycle in which the money saved by governments or insurance companies through the use of biosimilars increases demand, which increases investment and competition, offering more choice to those governments or insurers.

The topic is particularly important in Asian markets, where governments are extending health care to very large populations, working to adopt newer but often more expensive treatments all the while cutting costs. For drugmakers, the push is on to get as much Asian market share as possible as quickly as possible.

"It's pretty competitive," said James Cai, vice president of regulatory affairs for Japan and Asia Pacific at Amgen Inc. "But I don't view them [Asian biosimilars makers] as competitors. I view them as partners to push the biosimilar industry in this part of the world forward."

For many of these Asian drugmakers, there are plenty of lessons to be learned from the experience in the U.S.

Cai's view of the future for the biosimilar market is a little different from Chao's.

"We expect the biosimilars business to look more like branded biologics than small-molecule generics," Cai told the audience in his afternoon presentation.

In terms of development, he said, the scientific difficulty, time required and cost of biosimilars tend to be closer to those of their biologic reference products.

For biosimilars, owing to the elimination of the discovery stage of the drug development process and a high degree of biosimilarity to their reference products, "the skill set required is very different from the innovative product," Cai said. Full development of typical biosimilars can take upward of eight years and $200 million, he noted, compared to the average generic's three to four years at a cost of less than $5 million.

Likewise, he said, the manufacturing process for biosimilars is long and complex compared with the short and simple process for generics. And in terms of the market, decision-making tends to skew toward prescribers rather than patients.

Overall, "deep scientific skills and strong manufacturing capabilities are required for success" in biologics, Cai said.

Despite their differing views, both speakers agreed that the biologics industry is still in its early days. Four biosimilars have been approved in the U.S. Sandoz Inc.'s Zarxio (filgrastim-sndz), which in 2015 became the first biosimilar to enter the U.S. market, already has a 26 percent market share, which Chao said shows the potential of biosimilars. (See BioWorld Today, March 9, 2015.)

In 2016, three new approvals for biosimilars were focused on autoimmune diseases, including Amgen Inc.'s Amjevita, which references Humira (Abbvie Inc.); Sandoz' Erelzi, which references Amgen's etanercept; and Celltrion Inc.'s Inflectra, which references Remicade (Johnson & Johnson).

Regulatory developments will naturally be critical to the speed and direction of the biosimilar market's development. Chao noted the importance of the Biologics Price Competition and Innovation Act, passed in the U.S. in 2010. The main benefits of the act was the establishment of a clear pathway for regulatory approval and market access for biosimilars, the abbreviation of the registration process compared to what biologics face, the shortening of timelines and lower costs associated with development compared with novel biologics, and the expediting of potential market access, he said.

The market for biosimilars in the U.S. also received a boost from the unanimous ruling earlier this month by the U.S. Supreme Court that overturned a lower court's decision to block Novartis from selling a biosimilar until six months after its reference product had received FDA approval.

As a result of the ruling, biosimilar companies are not required to provide the reference product, sponsor its BLA or provide other manufacturing information, and can enter the market after the reference product receives FDA approval.

Despite the comparatively streamlined development process of biosimilars to novel biologics, there are still plenty of challenges to this market. Among these are the shifting regulatory sands, stringent chemistry manufacturing and controls (CMC) requirements to demonstrate similarity and reproducibility, and a high barrier of entry in the form of required clinical studies.

Both Chao and Cai noted that the demands for safety and efficacy in the biosimilar market essentially require substantial levels of investment and effort.

Reflecting these market pressures, Cai said Amgen biosimilars will be manufactured at its new Singapore facility to the same standards as their originator biologics. Given the small number of players and the high potential of the biosimilar market, he said, there is no room for cutting corners during the development process.

"With shortcuts you pay the price later on," he said. "You may save millions, but you will lose the big deals."