Biologics Market Dynamics:

Setting the Stage for

Biosimilars

FDA/FTC Workshop on a Competit ive

Marketplace for Biosimilars

M A R C H 9 , 2 0 2 0

Murray Aitken, Executive Director

Copyright © 2019 IQVIA. All rights reserved. IQVIA® is a registered trademark of IQVIA Inc.

in the United States and various other countries.

1

Biologics Market Dynamics

• Biologics are a growing share of the pharmaceutical market with significant growth over the past five years relative to

small molecules

• The R&D pipeline suggests this growth dynamic will continue and be broad-based across most disease areas

• Biologics reach the market through multiple channels and paytypes, each with its own characteristics and payment

dynamics

• The largest biologic originator brands have achieved significant cumulative sales since their launch

• Market exclusivity dynamics for small molecules are generally consistent and a steady share of the market is subject to

competition from generics, which dominate volume share

• Market exclusivity dynamics for large molecules have begun to shift over the past three years in terms of exposure to

biosimilar competition and shares

2

Biologics now represent 42% of the total medicines market, up from 30% in 2014Net Medicine Spending by Product Type US$Bn

Source: IQVIA, National Sales Perspectives, IQVIA Institute, Jan 2019; U.S. Census Bureau; U.S. Bureau of Economic Analysis (BEA), Dec 2018

Medicine Use and Spending in the U.S. - A Review of 2018 and Outlook to 2023. Report by the IQVIA Institute for Human Data Science.

70% 69% 66% 62% 58%

30%

31% 34% 38% 42%

285

315328 329 344

0

50

100

150

200

250

300

350

2014 2015 2016 2017 2018

Net S

pe

nd

ing U

S$

Bn

Small molecule Biologics Net Spending

3

Small molecules have declined 12% since 2014 on a real net per capita basis, while biologics have increased by 50%Real Net per Capita Medicine Spending and Growth by Product Type US$

Source: IQVIA, National Sales Perspectives, IQVIA Institute, Jan 2019; U.S. Census Bureau; U.S. Bureau of Economic Analysis (BEA), Dec 2018

689 717 704643 610

291326 360

391 435

9811,043 1,064

1,034 1,044

-

200

400

600

800

1,000

1,200

2014 2015 2016 2017 2018

Rea

l 2

01

8 U

S$

Net P

er

Ca

pita

Me

dic

ine

Sp

en

din

g

Small Molecule Biologic Real Net Per Capita

4

0%10%20%30%40%50%60%70%80%90%

100%

Biotech Small Molecules

Biologics are in development in most therapy areas, including those traditionally based on small moleculesShare of late-stage R&D pipeline activity by molecule type

Source: IQVIA Pipeline Intelligence, Dec 2019

5

Retail & Mail COMMERCIAL

26%

Retail & Mail MED D

17%

Retail & Mail MED ADV5%

Retail & Mail MANAGED MEDICAID

8%

Retail & Mail FFS MEDICAID

2%

Retail & Mail CASH

1%

NON_RETAIL Commercial

hospitals3%

NON_RETAIL Commercial

offices13%

NON_RETAIL Medicare FFS

2%

NON_RETAIL Medicare advantage

11%

NON_RETAIL Medicaid & Other

12%

59%

41%

Retail & Mail Non-retail

$182Bn

Medicare is 35% overall; Medicaid 22%; Commercial 42%, Cash 1%

Biologics reach the market through multiple channels and paytypes, each which distinct payment characteristics

US Biotech Market (Invoice Price level)US Biotech Market All Channels

Paytype Breakout Estimates

Source: IQVIA Institute for Human Data Science, Feb 2020

$182 Bn Combined

Retail & Non-retail

Biotech spending

(invoice)

Medicare 35%

Medicaid 22%

Commercial 42%

DIRECTIONAL ESTIMATES

6

The top 10 biologics each has cumulative sales of more than $40 billion since launch and been on the market more than 17 years

112

97

80

77

63

55

51

45

42

40

Cumulative invoice sales from launch to Sep 2019

HUMIRA

EPOGEN

ENBREL

LANTUS

REMICADE

NEULASTA

RITUXAN

AVONEX

NOVOLOG

HUMALOG

Years since

launch

17

28

22

19

22

18

23

19

24

24

Source: IQVIA National Sales Perspectives, Launch Edition Sep 2019

7

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

% S

ma

ll M

ole

cu

les M

ark

et A

cce

ssib

le to

G

en

erics

% Small Molecules Market Accessible to Generics (US$) Small Molecule Generic Efficiency (Extended Units)

About 40% of small molecule market sales are accessible to generics, and generic efficiency remains flat at 97%

Percent of Small Molecule Sales Accessible to Generics and Generic Efficiency, 2014–2019

Chart notes: “Generic efficiency” measures share of market where generics are approved and launched

Source: IQVIA National Sales Perspectives, Dec 2019

8

0%

5%

10%

15%

20%

25%

% B

iolo

gic

s M

ark

et A

cce

ssib

le to

B

iosim

ilars

% Biologics Market Accessible to Biosimilar (US$) Biosimilar Efficiency (Volume)

By year-end 2019, 17% of the biologics market is accessible to biosimilars, and biosimilars have achieved 20% share

Percent of Biologics Sales Accessible to Biosimilars and Biosimilar Efficiency, 2013–2019

Chart notes: Chart includes ‘biosimilars’ as non-original molecules for medicines even if approved outside the 351(k) biosimilar pathway; “Biosimilar efficiency” measures share of market where biosimilars are approved and launched

Source: IQVIA National Sales Perspectives, Dec 2019

filgrastim

insulin

lispro

insulin

glargine

infliximab

epoetin alpha

pegfilgrastim

bevacizumab

trastuzumab

9

0%

10%

20%

30%

40%

50%

60%

% B

iolo

gic

s M

ark

et A

cce

ssib

le to

B

iosim

ilars

% Biologics Market Accessible to Biosimilar, Launched (US$) % Biologics Market Accessible to Biosimilar, Approved (US$)

Biosimilar Efficiency (Volume)

Including approved but not yet launched biosimilars, 50% of biologic market sales could face biosimilar competitionPercent of Biologics Sales Accessible to Approved and Launched Biosimilars and Biosimilar Efficiency, 2013–2019

Chart notes: Chart includes ‘biosimilars’ as non-original molecules for medicines even if approved outside the 351(k) biosimilar pathway; “Biosimilar efficiency” measures share of market where biosimilars are approved and launchedSource: IQVIA National Sales Perspectives, Dec 2019

Biologics Market Dynamics:

Setting the Stage for

Biosimilars

FDA/FTC Workshop on a Competit ive

Marketplace for Biosimilars

M A R C H 9 , 2 0 2 0

Murray Aitken, Executive Director

Copyright © 2019 IQVIA. All rights reserved. IQVIA® is a registered trademark of IQVIA Inc.

in the United States and various other countries.