The Challenges of Specialty Generics Competing with Orphan Brands

Generic pharmaceutical manufacturers face several challenges when launching the first or second ANDA generic that competes with an orphan brand product.  Challenges include the following:

  • Will the brand manufacturer partner with another manufacturer (or subsidiary) to launch an authorized generic?
  • Should you contract with specialty pharmacy partners? If yes, do you approach the same specialty pharmacies that distribute the brand product?
  • Will the brand company increase rebates to the PBMs to influence their coverage decisions?
  • What requirements will the large PBM-owned specialty pharmacies demand to support your generic product, including price, support fees, and data fees they are receiving from the brand manufacturer?
  • What are the pros/cons of bypassing the wholesalers and direct contract with a handful of specialty pharmacies?
  • What, if any, financial assistance programs will the generic manufacturer consider? What experience does the generic manufacturer have working with patient support groups and/or offering copay cards?

These specialty products serve small patient populations and the brand price is often very high. Limited access to active pharmaceutical ingredient (API), a difficult manufacturing process, and a small patient population may limit the discounting the generic manufacturer is able to provide.

Generic manufacturers must understand the pharmacy landscape for the existing brand product (i.e.: more aligned with PBM owned, stand-alone, or health plan owned pharmacies) to determine its pricing and support strategies. Strategic questions include:

  • Are PBM incentives being addressed if all the discounts are given to the specialty pharmacy or vice versa?
  • Are health plans and their specialty pharmacies aligned to pursue lowest net cost regardless whether its via plan rebates or pharmacy discounts?
  • Will stand-alone specialty pharmacies have the payer coverage to provide adequate access to your product?

These questions should be addressed before finalizing a pharmacy and payer strategy. Specialty pharmacies and payers welcome the generic entrants to drive price competition in the marketplace.  The eventual marketing strategy must account for the influence these stakeholders exert on the payment and dispensing of the ANDA generic.

PHSI works with pharmaceutical manufacturers, PBMs/MCOs, and specialty pharmacies to help each stakeholder better understand market dynamics. Whether it is pipeline products or those where generics or biosimilars compete, PHSI has the expertise and resources to help our clients make informed business decisions to compete in a changing market.

 

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