Berlin –
- Strong location: Biosimilars intended for the German market are still 50 percent produced in Europe, 30 percent of them in Germany.
- Growing competition: The Asian share of production has risen from zero to 30 percent since 2010.
- Dangerous tendency: One-sided concentration on costs for biosimilars (automatic substitution) favors Asian production sites and can lead to migration.
Biotech drugs are on the rise. In 2021, every third drug in Germany was a biopharmaceutical. Their imitation products (biosimilars) are also becoming increasingly relevant for healthcare (e.g. for rheumatism, cancer and diabetes). The supply of biosimilars is based on a strong production site in Germany. Still! Because politicians now want to massively increase the cost pressure on biopharmaceuticals. From the summer, biopharmaceutical active ingredients should be automatically interchangeable – which should make discount battles like generics possible.
Do measures such as automatic substitution weaken Germany as a business location and, as a result, security of supply?
The study “Those who want reshoring must avoid offshoring” by Prof. David Francas, supply chain expert at Worms University of Applied Sciences and Dr. Jasmina Kirchhoff, iW Cologne after. Among other things, she comes to the conclusion that the relocation of the production sites for European biosimilars towards Asia has already begun – and there are developments that could reinforce this trend.
Development 1: The price level of biosimilars
“As with generics, the German healthcare system primarily sees the possible savings in biosimilars and ignores the fact that cost pressure can lead to relocations, which can also affect the security of supply,” says Dr. Jasmina Kirchhoff. “We saw that with generics and it can also happen with biosimilars.”
Development 2: The growing biotech expertise of Asian countries
“In the production of biopharmaceuticals, production facilities in China, India and Korea are already world leaders,” explains Prof. David Francas. “Companies are already naming China and India ahead of Germany as preferred locations for outsourcing biopharmaceutical manufacturing.”
Development 3: The state-controlled industrial policy of Asian countries
“Countries such as China and India have recognized the economic and supply-related potential of biopharmaceutical production and are expanding this in a very targeted manner with the help of state support measures,” says Francas. “In its “Made in China 2025” plan, the Chinese government named (bio)medicine as one of the ten key industries of the future. The aim is to become the world‘s leading industrial nation by 2049. For this, key industries are supported with high subsidies.”
With regard to biosimilars, Francas comes to the conclusion: “We still have almost no bottlenecks here. However, a migration of production could significantly weaken the security of supply.”
Walter Rohrer, Chairman of the AG Pro Biosimilars, calls on politicians to take these developments seriously and to draw conclusions: “Strengthening security of supply through a robust industrial base in Germany is the declared goal of the traffic light government and a cross-party consensus. It is completely incomprehensible that the government is thwarting this goal, especially with regard to supply-relevant biosimilars. With the automatic substitution, it increases the cost pressure, gives countries like China and India a competitive advantage and, above all, risks open-minded dependencies in the event of increasing geopolitical tensions. It must stop this regulation and delete the relevant passage that the previous government wrote into the law.”
You can view the study here.
The AG Pro Biosimilars represents the interests of biosimilar companies in Germany. It is open to all companies that develop, manufacture and supply biosimilars. The working group under the umbrella of Pro Generika eV is committed to providing patients with needs-based access to modern biopharmaceutical drug therapies, affordable care and fair and sustainable competitive conditions.