Forecasting the future of biologics
Peter Mansell reports on how to balance complexity and predictability when forecasting for biologics
The growing presence of biologics in R&D pipelines and on the pharmaceutical market has brought with it issues of complexity and controversy around product composition, variability and reproducibility, safety, modes of administration, and costs to healthcare systems.
All of which suggests that forecasting for these therapies is a much trickier proposition than for small-molecule drugs.
Not necessarily so, says Florian Turk, executive director and head of Global Health Economics & Outcomes Research at Novartis Pharma AG.
Turk’s focus is on market access and health technology assessment scenarios that feed into estimates of product uptake.
The overarching challenge in forecasting MA potential is accuracy, particularly given the proliferation of customers and stakeholders acting according to their particular business rationale and budget, he points out.
The complexity of this process is “certainly increasing,” Turk comments.
But it is not automatically more of a problem for biologics than for small-molecule drugs.
For one thing, biologics tend to be better characterized than their small-molecule equivalents.
“Sometimes, forecasting for specialties is now easier for us than in primary care,” Turk says.
“As part of your business preparation, it is easier to see what the likely restrictions are and what the likely offerings are in terms of the patient populations to be targeted.”
Nor, he says, does the relative complexity of biologics necessarily muddy patient pathways, at least from a forecasting perspective.
A better-defined patient population will make these pathways easier to plot. (For more on biologics, see ‘Patent expiration: Innovate or die’ and ‘Dr. Bates Talkback: How to mount an effective defense against generics’.)
Moreover, primary care products sold at premium prices are at the same risk of factors that complicate the treatment regime, such as prior authorization criteria, protocols, or demand for extra data to underpin duration of therapy, Turk notes.
So the basic rules of engagement are already in place.
Tipping toward complexity
What may tip biologics toward complexity is treatment response, particularly when products are bundled with companion diagnostics and the treatment regime depends on response analyses that may thin out the available patient population. (For more on companion diagnostics, see ‘New challenges and techniques in forecasting’ and ‘Personalized medicine: Regulating companion diagnostics’.)
“First of all, you need a good forecast of response, of patient population, of genotype,” Turk explains.
“Secondly, companion diagnostics, and these different starting and stopping rules, are usually developed alongside the drug.”
So the uncertainty resides not so much in the nature of biologics as in the business models developed for them.
These may involve factors where “we don’t have many market analogues”, Turk notes.
Potential variables include how accurate a companion diagnostic may be; whether a suitable diagnostic will be available/accepted and, if so, in which markets; and the greater likelihood that biologics will be subject to risk-sharing or pay-for-performance schemes. (For more on risk sharing, see ‘Managing market uncertainty: Is risk sharing the answer?’ and ‘Market access: Risk sharing and alternative pricing schemes’.)
In general, and despite the ongoing debate around pricing, HTA conditions for biologics are not fundamentally different from those for small-molecule drugs, Turk says.
All the same, actual product uptake will depend on ‘real-life’ treatment effectiveness.
“When you do the forecast, you have some idea about the product’s efficacy and safety,” Turk comments. “But you don’t know what the effectiveness will be.”
Generic entry
With the regulatory framework for biosimilars starting to clarify, biologics forecasts also need to factor in the potential impact of generic entry down the line.
Turk is not convinced, though, that the competitive threat is any less measurable than for mainstream generics.
There may be more uncertainty from a technological viewpoint, depending on the methods of synthesis or production used, he points out.
But the same factors can lead to marked variability between biologics themselves.
“In the end, when you forecast you have the same assumptions: How many players do we expect to enter the market? How many of them do we expect to enter at risk?” (For more on generics, see ‘Forecasting for generic erosion rates’.)
Another consideration is whether biologics, particularly those sold at high prices, have a place in the emerging markets that will increasingly drive pharmaceutical industry revenue and profits.
Here also, Turk sees no black-and-white distinction between cutting-edge therapies and small-molecule drugs.
The superior targeting available with many biologics means “there is a much stronger case for a limited number of patients in a number of emerging growth markets,” Turk says.
It really depends on the stage of development. There are emerging markets that have evolved to the point where they can afford additional treatment solutions for small patient populations in real need.
Then there are less developed countries where even conventional branded drugs have only a very small market share.
In South Africa, for example, the issue is not so much the type of molecule as whether it is branded or generic, Turk observes.
For a mainstream drug with a large patient population or for a biologic with a more targeted population, “In the end, what matters for the market is overall budget impact,” he says.
Familiarity is also easing the challenges of forecasting for biologics.
With the first generation of products, such as the monoclonal antibody Remicade, it was “really unknown territory,” Turk comments.
Now that a number of analogies are available in different countries, there is a much better understanding of how the market functions.
Accordingly, much of the uncertainty has been removed from biologics forecasting, Turk believes.
Rather, the scales have tilted so that “a lot of uncertainty has been added to the conventional products as well.”
On this more level playing field, he adds, “It’s all about predicting the changes in the external environment.”
For all the latest on forecasting, join the sector’s other key players at the 5th Annual Forecasting Excellence conference on October 4-6 in Boston.
For an overview of eyeforpharma’s forecasting coverage, see ‘Highlights from eyeforpharma’s Forecasting coverage’.
For all the latest business analysis and insight for the pharma industry, sign up to eyeforpharma's newsletters.