One Year after the Launch of the First U.S. Biosimilar Drug: Lessons for the Future?

28 Pages Posted: 9 Aug 2017

See all articles by Henry G. Grabowski

Henry G. Grabowski

Duke University - Department of Economics

Zoya Marriott

Cornerstone Research - Boston Office

Penka Kovacheva

Cornerstone Research

Andrew Elzinga

Cornerstone Research

Date Written: August 9, 2017

Abstract

In September 2015, the first biosimilar drug, Zarxio, was launched on the U.S. market. While the impact of generic entry on the small molecule branded market in the U.S. is well-understood, the impact of biosimilar entry on the large molecule biologic market has only been studied in Europe and results suggest that the nature of competition depends greatly on country-specific features of the health care market. In this article, we examine Zarxio’s performance in the first year since its launch and evaluate to what extent that performance can be informative of future biologic-biosimilar competition in the U.S. Since many of the market mechanisms driving fast penetration of small molecule generic drugs in the U.S. are absent in the case of biosimilar drugs, biosimilar penetration is expected to be slower. Indeed, the penetration for Zarxio has so far been much more modest than the average for small molecule drugs: 22% by the end of the first year compared to 88% for small molecule generic drugs. We identify several reasons why Zarxio’s performance may understate the rigor of future U.S. biologic-biosimilar competition.

Keywords: Biologic, Biosimilar, Drug Competition

JEL Classification: I11, L11

Suggested Citation

Grabowski, Henry G. and Marriott, Zoya and Kovacheva, Penka and Elzinga, Andrew, One Year after the Launch of the First U.S. Biosimilar Drug: Lessons for the Future? (August 9, 2017). Available at SSRN: https://ssrn.com/abstract=3016138 or http://dx.doi.org/10.2139/ssrn.3016138

Henry G. Grabowski

Duke University - Department of Economics ( email )

213 Social Sciences Building
Box 90097
Durham, NC 27708-0204
United States
919-660-1839 (Phone)

Zoya Marriott

Cornerstone Research - Boston Office ( email )

Boston, MA 02115
United States

Penka Kovacheva (Contact Author)

Cornerstone Research ( email )

699 Boylston St
Boston, MA 02116
United States

Andrew Elzinga

Cornerstone Research ( email )

Boston, MA 02115
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
16
Abstract Views
163
PlumX Metrics