ViewPoints: Roche CEO Schwan – Biosimilars part of pharma's "contract with society"

Perhaps buoyed by the recent approval of Kadcyla in the US, Roche CEO Severin Schwan projected a bullish stance towards the threat of biosimilars at the Economist Pharma Summit held in London recently.

Insight, Analysis & Opinion

According to a recently published article in The Wall Street Journal, momentum among biosimilar developers continues to decelerate (analysis of the specific events cited in the article can be read in the links at the bottom of this piece). Quoted in The Wall Street Journal, Schwan made the point that Roche has consistently been forced to revise its anticipated entry point for biosimilar competition, suggesting biosimilar rituximab could enter the market in 2016. On Thursday in London he appeared to revise this estimate once again, indicating that Roche's key franchises should avoid such competition until the end of this decade.

Simultaneously, however, Schwan was happy to describe biosimilars not as a threat but as part of the industry's "contract with society." Failure in allowing biosimilars to reach the market would have more ramifications on branded players operating within the biologics space, he argued, as perpetual "ever-greening" of expensive products would ultimately trigger a backlash from payers in the long term. In short, he concluded, it is in Roche’s interests for biosimilars to exist "to ensure protection of the current model."

Against the backdrop of the evolving biosimilars landscape, Roche finds itself in a unique position, which make Schwan's comments all the more interesting. In a recent analysis of the biosimilars development space, Sanford C. Bernstein analyst Ronny Gal noted that Roche's success in the oncology monoclonal antibody market has exerted a "winner’s curse" on the company, in terms of the number of biosimilar developers targeting its originator products. However, Gal (among others) has also consistently advocated that Roche has developed the best defence strategy against future biosimilar competition.

Although the Swiss company is reportedly leading efforts in the US to push through state-level bills designed to limit – or raise the regulatory hurdles necessary to support – biosimilar substitution with originator brands, innovation sits at the core of Roche's defence strategy. As exemplified by the approvals of Perjeta and Kadcyla for HER2-positive breast cancer (thus positioning a combination of these products as a potential successor to Herceptin) and the significance of forthcoming trial data for GA101, a potential successor to Rituxan.

Reiterating a theme now synonymous with Roche senior management, Schwan suggested that payers will shift their financial resource to those products that demonstrate the most difference.

Others will disagree that this is a foregone conclusion, particularly in Europe where austerity measures continue to bite. Across London – speaking at the World Generic Medicines Congress – Synthon chief commercial officer Michael Kotsanis suggested that some payers in certain circumstances would baulk at the cost of prescribing a Perjeta/Kadcyla combination product instead of Herceptin, particularly if a cheaper biosimilar Herceptin product was available (Synthon developed and out-licensed a biosimilar trastuzumab product to Amgen).

Aware of this challenge, Roche has already introduced the concept of 'personalised pricing for personalised medicine' in a number of recent company presentations. Responding to questions from FirstWord at the Economist Pharma Summit, Schwan said that differentiated pricing models within a single country market remains a concept that the company will continue to pursue and one that payers are open to "conceptually." He conceded, however, that a lack of suitable framework presents significant difficulties in delivering on the promise of this concept. In the meantime, Roche is banking on innovation to counter the biosimilar threat.

Further biosimilars analysis:

ViewPoints: Samsung builds incremental capabilities in biosimilars space / Merck & Co. continues to shuffle feet on biosimilar strategy?

ViewPoints: Big Pharma's march on the biosimilars market gathers pace

ViewPoints: Merck & Co. drops biosimilar Enbrel – another sign of Big Pharma's dwindling enthusiasm?

ViewPoints: FDA's wait for biosimilar applications illustrates challenges ahead

ViewPoints: Samsung's biosimilars bullishness hits a setback

Spotlight On: Boehringer Ingelheim's rituximab revelation illustrates evolving biosimilars landscape

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