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Emergence of The Biosimilar Sector and Opportunities for Developing Country Suppliers

Dinar Kale

Affiliated staff:   Farah Huzair

Funding: OU IKD

February 1 2012 – June 30 2012

In healthcare sectors around the world a new market for biosimilars - copycat products produced at lower prices – have been emerging, which have the potential to severely affect the business models of existing firms, disrupt market structures, and transform patient care in both developed and developing countries. The emergence of this new market dynamic has been disruptive to current key players as it challenged their dominant hold over the market, and also created a sea of opportunities for firms from developing countries. However, evolving regulatory frameworks and complex manufacturing processes added new risks to this emerging biosimilar market.

Biosimilars are large complex molecules, derived from specific cell lines and are difficult to produce with consistency. Government agencies around the world are still grappling with the issue of defining appropriate frameworks to regulate entry of biosimilars into the market. There have been significant differences between the position of the US and the position of regulatory agencies in the rest of the world (including the EU). In this context firms had to design strategies that took into account this uncertain regulatory terrain and complex cost inducing manufacturing process. This project focussed primarily on the Indian pharmaceutical industry and investigated the transformation of business models and organisational capabilities, as a response to the emergence of new disruptive markets by key Indian pharmaceutical firms.