Pharmaceutical major Pfizer made the headlines this week with its decision to acquire Hospira for a whopping US$17 billion, inclusive of debt. The company is obviously not holding back anything because it wants to see this deal come through successfully – and eventually, profitably. With this move, Pfizer is also trying to cash in on a new class of generic drugs that are very sophisticated copies of elite biotech drugs. This obviously makes the new class of generics incredibly costly.
It is evident that Pfizer wouldn’t have gone to such great lengths to acquire Hospira if it wasn’t for the promise that this deal holds. The company is confident that the Hospira acquisition will help it earn lucrative revenue in the future in the biosimilars segment.
A consultant who works at the pharmaceutical division of PricewaterhouseCoopers told media that the emerging biosimilars market is where future growth lies. He termed it as being the “land of opportunity”.
Biosimilars are essentially highly complex copies of biologic drugs that have little or no competition within the market in the United States. Biologic drugs are produced in living cells, which is why they cannot be copied precisely. That’s also the reason why they are called biosimilars, and not generic drugs. Despite being touted as the most promising trend in the pharmaceutical industry, unanswered questions about the durability of biosimilars still exist. In Europe, biosimilars have been on the market for a number of years. But the FDA is yet to approve biosimilars for the U.S. market. This situation is on the brink of change, as an FDA advisory panel recently gave a nod of approval for the launch of a biosimilar of Neupogen by Amgen. The drug is used for cancer treatment.
Thus, Pfizer’s venture in the biosimilars market could just be the beginning of similar deals in the future.