Emergence of biosimilar market and emerging country suppliers

By: Dinar Kale, Farah Huzair
Funding Body - IKD Seed Corn fund
Funding period - Friday 04 October 2013

In healthcare sector around the world a new market for biosimlars - copycat products produced at lower prices is emerging and which can potentially severely affect the business models of existing firms in the new era. The rise in demand for biosimilars and capabilities for cheap production in developing countries has potential to disrupt current market structure and transform patient care in both developed and developing countries (Huzair and Kale, 2011). It has been estimated that sales worldwide of biologics in 2009 reached $130 billion (Manufacturing Chemist, 2010) and that biosimilars might offer reductions of up to 30% compared to an original biologic (Krull and Rathore, 2010; Iskowitz, 2010). This emergence of a new market dynamic is disruptive to current key players as it can challenge their current dominant hold over the market, while for firms from developing countries it creates a sea of opportunities. However evolving regulatory frameworks and complex manufacturing processes adds new risks to this emerging biosimilar market.

Biosimilars are large complex molecules, derived from specific cell lines. As such, they are difficult to produce with consistency (Agres, 2011). Even if the formulation and production process is known, biosimilars as generic versions of a biological cannot be identical to a reference biologic. Government agencies around the world are grappling with the issue of defining appropriate frameworks to regulate entry of biosimilars into the market. There is a significant difference between the position of the US and the position of regulatory agencies in the rest of the world (including the EU) adding to the complexity of the problem. In this context firms have to design strategies taking into this uncertain regulatory terrain and complex cost inducing manufacturing process. 

Focusing on the Indian pharmaceutical industry this project investigates the transformation of business models and organisational capabilities as a rseponse to emergence of new distruptive market by key Indian pharmaceutical firms.  



Huzair, F and Kale, D (2010) Emergence of The Biosimilar Sector and Opportunities for Developing Country Suppliers, Innogen Working Paper, http://innogen.org.uk/working-papers.php?id=528 

Presentations & Events

Kale, D and Huzair, F (2012)  Reconfiguration of competencies as response to emergence of disruptive new market segment: Evidence from the Indian pharmaceutical industry, IKD Work  Work in Progress Seminar Series, The Open University, Milton Keynes 


Dinar Kale

Email: Dinar Kale

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