Preserving Branded Share in an Environment of Biosimilars

The March 6, 2015 FDA approval of Sandoz’s Zarxio as a biosimilar alternative to Amgen’s Neupogen marked a key milestone in the US healthcare industry as the first product to be approved under the Biologics Price Competition and Innovation Act of 2009. Following closely behind Zarxio, the FDA approved Celltrion’s Inflectra, a biosimilar to Johnson & Johnson's blockbuster rheumatoid arthritis drug, Remicade. With the most recent approval of Erelzi, Novartis’ version of of Amgen’s Enbrel, we may finally be witnessing the long-discussed but often-delayed emergence of a biosimilars market.

Looking ahead, biosimilar momentum is expected to grow rapidly and will compete with more of today’s largest drug franchises, including such giants as Humira in the arthritis market and Avastin, Herceptin, and Rituxan in oncology. In fact, the US biosimilar market is expected to grow to an estimated $11Bn by 2020. Moreover, biosimilars are expected to deliver savings of about $25Bn within Medicare and Medicaid programs alone.

While there remain large questions on regulatory topics and payer dynamics that will drive early utilization, an expanded collection of manufacturers will also pose key challenges to branded manufacturers. Biosimilar competition will not be limited to the traditional generic companies like Teva, Sandoz, and Mylan. Biosimilar competition will also include the large drug makers. Pfizer, Amgen, and Merck are all leveraging their scientific, manufacturing, and commercial know-how to capitalize on the biosimilar opportunity. The large market opportunity has even attracted new faces such as Samsung, who is investing significant resources into becoming a recognized force in biosimilars.

Promotional efforts must now move forward in step with the complexity. Unlike generics, where aggressive price discounts—often 80% or more—became the ultimate driver of market share, biosimilars may not follow the same path. Illustratively, Sandoz launched Zarxio at a mere 15% discount relative to Neupogen. But branded manufacturers should not relax their promotional efforts; biosimilar entries are set to become highly competitive alternatives to the established therapy. This dynamic has more in common with the launch of a branded alternative and may be supported by similarly sophisticated commercial strategies.

With this dynamic, instigating a price war would not be advantageous for any of the players. Promotional efforts and field presence therefore will continue to matter in preserving branded share entry and a fiscally responsible share retention strategy will be critical for the branded manufacturer.

The biosimilar setting still demands a shift in the mindset of brand leadership however. Traditionally, brand leadership focused on potential revenue upside resulting from promotional investments. For biosimilars, attention should drive to the potential revenue downside of inadequate spend. Brand leadership must prioritize resource allocation and establish an environment that facilitates trade off decisions and promotes flexibility in promptly transitioning from plan to action.

Let’s investigate some of the promotional levers available to brand leadership in biosimilar setting.


In preserving the branded share, contracting strategy is critical to ensure financial neutrality in presence of biosimilar alternatives. Although biosimilar manufacturers may report an overall discount to the branded list price (Wholesale Acquisition Cost), the actual cost (Average Manufacturer Price) may vary significantly across accounts and is negotiated as a final confidential price. This necessitates evaluating contracting approaches at the account level and establishing and monitoring metrics that trigger discounts for price parity.

Sales Force

Sales representatives will play a critical role in contract pull through and in demonstrating a continued commitment to the market and customers. If biosimilars are approved under a copy and paste label, the role of the sales rep in driving clinical differentiation will diminish and will evolve into a support and service function. In this case, the sales rep will act as a quarterback in leveraging company resources, ensuring that all provider and patient needs are addressed when utilizing the branded drug. This role evolution impacts rep workload and changes the needs and priorities at the local level, necessitating a robust segmentation of the market to evaluate the appropriate sales force size and structure. Depending on the overall company strategy and perspective, the optimal solution may involve options such as local level resourcing, SWAT / flex teams, inside sales / support teams, and hybrid models.

Support Roles

In optimizing the allocation of Sales and Marketing budget, it is critical to evaluate where the investments provide the most impact. In addition to sales reps, Field Reimbursement Managers, Nurse Coordinators, Account Manages, and Payer Teams are critical in successfully meeting stakeholder needs in utilizing the branded drug. The biosimilar setting, however, does not require the same level of investment in all supporting roles such as teams involved in insight generation, conferences and seminars, and in-house support functions.

Marketing Tactics

It is important not to take a blanket approach by cutting all Marketing Tactics upon biosimilar entry. Without clinical differentiation, reductions in speaker programs and conference spend may be warranted. Marketing tactics such as Patient Relationship Management and co-pay programs however may require increased resourcing to ensure adequate patient support. Additionally, and depending on the market segmentation, non-personal promotional tactics may complement or replace field presence as cost-effective, relevant channels for select geographies.

We will learn much more about biosimilar utilization and its impact on branded markets in coming years and the influx of new information may rapidly change perspectives on how to best remain competitive as a branded drug. While this uncertainty can be disconcerting, branded manufacturers should lean into proactive implementation of flexible, dynamic evaluation platforms that can be updated and adjusted according to new revelations. More concretely, our discussion above shows that a branded manufacturer should conduct a bottom-up evaluation of promotional and non-promotional needs to inform resource allocation across the key tactics and investments with a focus on preserving branded share.

As always, the key priority is to do the right thing for patients, assuring treatment availability and affordability while preserving the branded choice if desired.


Sepp Saljoughi

Sepp is a Principal at 159 Solutions, an analytically driven company focused on providing solutions to life sciences companies. Sepp has 16+ years of experience biotech and genomics across analytics, sales and marketing, finance, and R&D. Prior to joining 159, Sepp managed the 19 member BioOncology Marketing Science team at Genentech, where he was a strategic advisor and collaborator to many business partners and senior leaders. Before joining Genentech, Sepp worked at ZS Associates, where he spent 3.5 years working across both marketing and sales practice areas. Sepp received his B.A. in Molecular and Cell Biology as well as his MBA and MPH degrees from UC Berkeley.

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