Executive Briefings

The Impact of Generic Biotech Products on the Healthcare Supply Chain

Lower-cost "biosimilars" are coming to the U.S. Gillian Woollett, chief scientist with Engel & Novitt LLP, discusses the implications for drug companies, supply-chain managers and patients.

Consumers have long benefited from the lower cost of generic aspirin, cold remedies and other popular therapeutic drugs. Now they're about to witness the arrival of generics that were produced through biotechnology. Patents on key biotech drugs are about to expire, bringing new options and savings to the marketplace. At the same time, the development will bring an additional level of complexity to the healthcare supply chain, Woollett says.

These "biologics" or "biosimilars" - medicines developed from living systems - can in theory be produced by multiple manufacturers, who will widen the availability of products while driving down costs. They can also help to smooth out demand, says Woollett. In the process, biologics will begin to account for a greater portion of healthcare spending.

There is still some question as to when those products will hit the marketplace. "The devil is in the details," says Woollett. The speed of approval by the U.S. Food & Drug Administration will hinge on the structure of the regulatory process and the data that is made available to the agency by manufacturers.  With more than a dozen generics already approved, Europe is ahead of the U.S.; its experience should help to alleviate concerns in this country about the drugs' safety, purity and potency, she says.

Not just any company can produce a line of quality generics. It must have the experience and resources to conduct clinical trials and surmount the government's regulatory obstacle course. Woollett estimates the cost of entry into the market at between $50m and $100m. Still, she says, there should be enough competition among successful providers to ensure significant savings for patients.

The benefits won't materialize all at once. Over time, Woollett says, the new breed of biologics will come to have a big impact on healthcare spending and access by consumers to critical drugs.

To view this video in its entirety, click here.

Consumers have long benefited from the lower cost of generic aspirin, cold remedies and other popular therapeutic drugs. Now they're about to witness the arrival of generics that were produced through biotechnology. Patents on key biotech drugs are about to expire, bringing new options and savings to the marketplace. At the same time, the development will bring an additional level of complexity to the healthcare supply chain, Woollett says.

These "biologics" or "biosimilars" - medicines developed from living systems - can in theory be produced by multiple manufacturers, who will widen the availability of products while driving down costs. They can also help to smooth out demand, says Woollett. In the process, biologics will begin to account for a greater portion of healthcare spending.

There is still some question as to when those products will hit the marketplace. "The devil is in the details," says Woollett. The speed of approval by the U.S. Food & Drug Administration will hinge on the structure of the regulatory process and the data that is made available to the agency by manufacturers.  With more than a dozen generics already approved, Europe is ahead of the U.S.; its experience should help to alleviate concerns in this country about the drugs' safety, purity and potency, she says.

Not just any company can produce a line of quality generics. It must have the experience and resources to conduct clinical trials and surmount the government's regulatory obstacle course. Woollett estimates the cost of entry into the market at between $50m and $100m. Still, she says, there should be enough competition among successful providers to ensure significant savings for patients.

The benefits won't materialize all at once. Over time, Woollett says, the new breed of biologics will come to have a big impact on healthcare spending and access by consumers to critical drugs.

To view this video in its entirety, click here.