Pharma: FDA Visits Pliva Factory: Preparing for U.S. Biosimilars Market?

In August, the US Food and Drugs Administration (FDA) carried out their inspection of Pliva’s Generic and Biogeneric production facilities in Zagreb and in Savski Marof, near Zapresic. The inspection control passed successfully, determining if the production facilities satisfied the strict global requirements for the production of pharmaceutical products. This is a regular visit by a drugs regulator of a country in which Pliva sells its pharmaceutical products. Taking into account the manner in which the biosimilars (biogenerics) market is developing in the United States, this visit by the FDA and their positive report gains a wider importance in Pliva’s business development strategy.

Due to various reasons, including lobbying by innovative drug companies and the conservative policies about the use of organic materials in R&D, including the production of medicines, biosimilars are not permitted on the US market, meaning that innovative biopharmaceuticals have exclusivity. Due to the high cost of health care and the reform of the health care system in the US, deregulation of biosimilars in the US is in process. The introduction of biosimilars to the US market is set for 2014. Some studies estimate that the US biosimilars market could be valued at $9 billion (USD) by the end of the decade. The global biopharmaceutical market is valued at $138 billion in 2011 and expected to grow to over $320 billion by 2020. Therefore, the FDA’s approval of Pliva’s biosimilars production facility in Savski Marof is a significant step in Pliva’s business development strategy towards the US market for 2014 and beyond.

In 2006, Barr Pharmaceuticals acquired Pliva, primarily due to the synergy between the two companies. Barr was lobbying for the deregulation of biosimilars in the US, but did not have any experience in the production of biopharmaceuticals. Pliva had production experience and production facilities in Croatia and in other European countries. The purchase was strategically profitable both for expanding into Europe and for the future US biosimilars market. In 2008, the global generics company from Israel, Teva, acquired Barr and, subsequently, Pliva. Due to Teva’s experience in biopharmaceuticals and network in the US and Europe, it was questionable what Teva’s strategy would be towards Pliva. The expansion of Pliva’s Savski Marof production facilities and the FDA certification are sound evidence that Pliva is an integral part of Teva’s European and US business strategy.

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