Legislation authorizing FDA to develop an abbreviated pathway for follow-on biologics seems pretty much inevitable—at least, that’s the near-unanimous opinion of the experts we talk to over here at the IN VIVO blog.
So assuming legislation passes sooner rather than later—indeed, some industry watchers think it’ll be as soon as next year—it’ll be a boon for the generic drug industry. Right? Generic drug companies will easily transfer their small molecule expertise into developing biosimilars. Right? They’ll become the big players in the follow-on biologics market and make a gazillion dollars. Right?
Well, maybe not.
According to some analysts, like Cowen & Co.’s Ken Cacciatore, the market for follow-on biologics may not unfold in the way most expect. While the generic drug industry would appear to be the natural players for follow-on biologics (and indeed, they certainly think so), Wall Street is starting to look in a different direction altogether.
As we just wrote in a story for The RPM Report, Cacciatore and his colleagues at Cowen think that (surprise!) Big Pharma and biotech companies are actually better equipped to play in the follow-on biologics market. (You can read the whole story at TheRPMReport.com; if you’re not already a subscriber, you can sign up for a free trial.)
Now, we don’t mean to suggest it is all doom and gloom for the generic drug industry. There are a few bigger generic companies—like Teva and Novartis’ Sandoz, for example—with the infrastructure and expertise necessary to compete with branded companies. But interestingly, Cacciatore points to both companies' brand-like features—not their generic capabilities—in outlining their FOB potential.
For the rest of the generic drug industry, there’s still good news. Even if Congress manages to push through legislation authorizing an abbreviated pathway, FDA’s part in all this isn’t going to happen overnight. Depending on Congress’ intent, it could take a while—perhaps even years—to develop the regulations. So for companies that aren’t ready, there’s still time to prepare.