CC2024/02 Naidoo, M, Thibane, T and Tunyiswa, P. Competitive Landscape-of-Biosimilars-in-South-Africa

Traditionally, the pharmaceutical market has been known for its production of chemical synthetic medicines generally referred to as originators and generic medicines. However, in the last decade, there has been an increasing interest in more technologically advanced and effective medicines such as biologicals (originator) and biosimilars (equivalent of the biological). From a competition perspective, biosimilars have gained interest due to their positive impact on price competition resulting in more affordable essential medicines. This is particularly pertinent in South Africa given the high disease burden and a constrained healthcare budget. The findings from the study revealed that in comparison to some countries, South Africa has fewer biologicals and biosimilars. The study also demonstrated that the biosimilar enters at a lower price than the biological, and in most instances, the biological responds to the entry of the biosimilar by reducing its price. The analysis also shows that the entry of a second biosimilar leads to further price competition between the biosimilars, with the second biosimilar entering at a lower price than the first biosimilar. The study finds that the entry of biosimilars encourages price competition which benefits consumers in the form of lower-priced medicines, thereby increasing access to essential medicines. Key words: biologic, biosimilar, price competition Competition Commission South Africa Working Papers are written by staff members of the Competition Commission South Africa. The papers deal with topical issues and describe preliminary research findings and develop new analytical or empirical approaches in their analyses. They are solely intended to elicit comments and stimulate debate. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the Competition Commission South Africa. While every precaution is taken to ensure the accuracy of information, the Competition Commission South Africa shall not be liable to any person for inaccurate information, omissions or opinions contained herein.