Follow-on biologics: Another ho-hum assessment

Do you like my new idea?
Do you like my new idea?

Proponents of follow-on biologics are invariably surprised that their hopes for product introductions and price competition outpace reality. Instead of stepping back and asking whether the whole concept of biosimilars makes any sense from a cost reduction standpoint they persist in recommending tweaks to the existing regime and asking for patience as we await results.

The New England Journal of Medicine published a Perspective on the topic last month (Progress and Hurdles for Follow-on Biologics), which followed the usual script. Rather than blog about it I wrote a letter to the editor. I didn’t expect to see it published –after all NEJM receives lots of letters and I don’t have the right academic credentials. Sure enough it was rejected, so here it is:

Sarpatwari et al. (June 19 issue) mistakenly expect the market for follow-on biologic drugs to evolve in a similar manner to the market for generic versions of small molecules. As a result they are surprised that prices of follow-on biologics are stubbornly high and competition low. But follow-on biologics are more like me-too versions of small molecule products, where similar drugs are introduced in the same class. Remember, Lipitor was a me-too product, the fifth statin on the market. Lipitor didn’t compete on price, however. Instead Pfizer used superior marketing to differentiate. I expect similar behavior in biologics.

The authors’ misunderstanding leads them to faulty recommendations designed to encourage development of more follow-on products. If the goal is to reduce costs without depressing innovation, then a wiser approach would be to regulate the price of the original biologic after it has been on the market for a decade or so. That would enable innovators to earn healthy financial returns, eliminate the expense and risk to patients of clinical trials of follow-on products, and reduce demands on FDA inspectors.

David E. Williams, MBA
Health Business Group
Boston, MA

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By healthcare business consultant David E. Williams, president of Health Business Group.


July 20, 2015

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