– After a decade, JP Biosimilar guideline’s first revision expected in FY2020 –Demonstrate Chuikyo need of biosimilar tool to curb healthcare cost

– Biosimilars uptake varies as per each opportunity, Remicade BS vs. Rituxan BS- Two poles of the curve

– A few skipping NHI listing due to manufacturing issues associated with constantsupply need, Japanese CDMO imminent to seal  this local need

Since 2009, 25 biosimilars of 12
originator products are approved in Japan and have yielded mixed performances
and attained annual sales of ~¥32.4b ($300m). Unique biosimilars landscape with
the entry of NESP “biosame” by originator Kyowa Hakko Kirin through its
subsidiary, co-promotion/marketing collaboration with local companies for the
front-end skill sets (Ayumi, Kyowa Hakko Kirin, Teijin) and few skipped listing
to better manage constant supply (Pfizer), a key requirement by MHLW, makes
Japan a distinct market vs. US and EU. Less stringent regulatory environment
vs. US for approval, increasing healthcare burden and strong foothold of the
marketers have played key roles in this early uptake  which is at par to one of the best generic
small molecule penetration in Japan in a short time (Filgrastim BS-volume
share~45% in two years, Lantus BS- ~9% in 2 months vs.  Lipitor generics ~50% volume share).

While analyzing the launched
biosimilar penetration since 2009 in Japan, bolstering uptake of Enbrel,
Rituxan, and Lantus biosimilar vs. very slow uptake of Remicade BS mainly been
attributed with the use of biosimilars in DPC hospitals,product reimbursement
under high cost medical care benefit system and front end presence of the local
partner. Despite the string of recent biosimilars approvals, healthcare
professionals still harbor concerns over the quality of biosimilars. MHLW’s
announcement to update a decade back biosimilars guideline by FY2020 to reduce
cost of development as well as to increase confidence of physician on quality,
is indicative of biosimilar as important weapon for Chuikyo(Central social
Insurance Medical Council) to curb healthcare cost. Further, “Biosame” pricing
game will play a major role in the future for biosimilar penetration. We see
that Abenomics measures and government involvement in biosimilars use would
lead to the Biosimilars promotions in the coming times in Japan.

Mixed strategies by originator
for “Bio-same” launch (Kyowa Hakko Kirin to launch “Biosame” vs. Chugai said
not to launch “Biosame”), therapy area wise biosimilars cherry picking by
mid-size Japanese companies, and different strategies by local generic
companies (NichiIko heading for global market vs. Sawai testing through
co-promotion and Towa yet not decided to enter), demonstrates each company’s
different need and approach to cater biosimilar opportunities in Japan.

Since the last five years, most
of the companies have some alliance in place for biosimilars, with most of the
Japanese companies undertaking pacts with South Korean companies to ride on
their back of biosimilar mAb expertise. There is a trend of doing product
specific alliance by most of the JP companies active in BS space and to go step
by step on this high risk/high return opportunities. Against this backdrop,
multinational companies like Pfizer are setting their sights on this market
without local partnership taking advantage of pro-biosimilar environment to
capture decent biosimilar market share. Overall, in the Japan market, each
opportunity has a different competitive landscape for itself, and some
companies are looking for niche opportunities in biosimilar space as per their
specialty therapy area- like ophthalmology BS (Lucentis), Enzyme therapy BS
(JCR)

While launched
biosimilars now generates ~¥32b ($300m) sales and its penetration is
accelerating, MHLW’s approval of “Biosame” of NESP based on same clinical data
as the originator NESP, and current ongoing dialogs to price “Biosame” higher
than biosimilars, indicative of Biosame to be the key hurdle in the future for
mid-size biosimilar companies in Japan. In the year 2020, MHLW’s stand on Biosame,
will be important to decide future of theses mid-size /generic biosimilar
developers.  Around ~¥550b opportunity is
opening for biosimilar in the next 7 years in Japan due to patent expiry of
Wave 2-3 biologics.

In
this report, we attempt to analyze trend/requirement of regulatory approval of
biosimilars based on Ex-Japan clinical trialdata, factors responsible for each
key launched biosimilar penetration (“Made in Japan” vs. “Tested by Japan”), and
the future competitive landscape in the biosimilars space in Japan.  We also attempt to analyze detail BS market of
EPO, Filgrastim/Pegfilgrastim/ Insulin/Lantus apart from other key complex Mab
Biosimilar opportunities and list out niche opportunities in biosimilar space
in Japan.  Details of all major
consolidation activities done by JP/Foreign companies in biosimilar space in
the last five years and crisp summary on strategies of each key player (~21 JP
local companies, multinational companies), their interest & focus for
future collaboration in biosimilar space.