Investment
Producing a biosimilar is far more capital-intensive than manufacturing a chemical-based generic. The investment needed to produce a generic is in the region of £5 million. To do the same for a biosimilar costs approximately £200 million. The timelines are also very different, with biosimilars taking much longer to produce.
Value erosion
From a procurement perspective, it is very important to understand the differing investment and time requirements between producing a typical generic and a biosimilar. The additional time and cost to manufacture a biosimilar must be factored in when planning procurement processes and awards.
Biosimilars are not medicines that can be produced instantly. Given the higher monetary barriers to entry, there are generally fewer competitors than for generics and less flexibility in the market. All these issues must be considered when procurers look at the market. Anything which may erode value from a manufacturer's perspective could prevent biosimilar development altogether, given the significant investment needed to participate.