Prescription Data Reveals Diverging Growth Landscape in Biopharma: Spotlight on Biosimilar Impact for J&J and Amgen

Core Conclusions

Growth in the U.S. prescription drug market is nearly stagnant, but its internal structure is undergoing intense divergence. The investment rationale must shift from overall growth to structural opportunities and specific risks. The market may currently be underestimating: 1) Significant variations in the erosion speed of originator profit pools by biosimilars, with the impact intensity on products like Johnson & Johnson's Stelara and Amgen's Prolia far exceeding prior experience with AbbVie's Humira; 2) Beyond star areas like GLP-1, overall market weakness significantly raises the execution bar for new drug launches, creating a risk of disconnect between the early performance of drugs like Bristol-Myers Squibb's Caplyta and long-term consensus estimates.

Structural Growth Drivers vs. Stagnant Market

Overall prescription volume growth has stalled, but innovative therapies are driving pockets of robust growth. Total U.S. rolling 12-week prescription volume declined 0.1% year-over-year, with the growth engine nearly idling. However, GLP-1 receptor agonists, RSV vaccines, and some new immunology drugs constitute the primary growth poles. Evidence shows that within the diabetes drug pool (DPP-4 + SGLT2 + GLP-1), GLP-1 agents' prescription share has climbed to 32%, while DPP-4 agents have shrunk to 7%. Novo Nordisk's Ozempic commands a 51% prescription share within the GLP-1 class, demonstrating strong market control. The investment implication is that industry growth is entirely driven by a few cutting-edge areas, substantively capping the growth potential for companies reliant on traditional blockbuster drugs.

Divergence in Depth and Speed of Biosimilar Erosion

The impact of biosimilar competition is not uniform; erosion speeds for some blockbusters are far exceeding expectations. The market's prior experience, where Humira retained a 66% prescription share one year post-biosimilar launch, may lead to underestimation of the impact from subsequent competitors. Evidence indicates that for Johnson & Johnson's Stelara, following biosimilar entry, weekly prescription volume plummeted 63% year-over-year, with the originator's prescription share falling to 71%. Amgen's Prolia faces a similarly severe situation, with its biosimilar Jubbonti rapidly capturing a 22% prescription share post-launch. This contrasts sharply with the slow penetration of Humira biosimilars (19% share). The investment implication is that for pipelines facing imminent biosimilar competition, historical penetration curves cannot be simply applied; a specific assessment of the competitive landscape and payer strategies is required. Profit declines for related products at companies like Johnson & Johnson and Amgen may be faster than market expectations.

Elevated Execution Risk for New Drug Launches

In a static market, the difficulty for new drugs to meet analyst consensus estimates has increased markedly. The zero-growth overall market environment creates unfavorable conditions for new drug uptake, while market growth expectations for non-disruptive therapies may be overly optimistic. Key evidence comes from Bristol-Myers Squibb's new drug Caplyta (for schizophrenia), with current weekly prescriptions around 2,880. To reach the 2026 sales consensus of $311 million, its prescription trajectory would need to be 2 to 5 times that of recent launches for similar new drugs, a significant gap with current data. This is not an isolated case; new drug launches face fierce market share competition in a static market and high expectation hurdles. The investment implication is that valuations for new drugs must incorporate a higher discount for launch execution risk, with close monitoring of how early prescription data compares to consensus-implied pathways.

Key Disagreements and Risks

Core disagreements lie in judgments about biosimilar impact speed and expectations for new drug growth curves in a weak market. Main risks include: 1) Market Growth Risk: Stagnant overall growth in the U.S. prescription drug market, capping industry revenue potential; 2) Data Limitations Risk: Inherent flaws in IQVIA data, including missing hospital prescriptions, restricted reporting for certain drugs, and incomparability of prescription volumes due to differing dosing regimens, affecting trend accuracy; 3) Intensifying Competition Risk: Uncertainty around biosimilar pricing pressure and penetration speed could erode originator profits beyond expectations; 4) Excessive Expectations Risk: Market growth rate expectations for non-disruptive new drugs may be overly optimistic, posing downside risk.

Valuation and Trading Implications

Against a backdrop of slowing overall growth and intensifying generic/biosimilar competition, investing requires a high focus on structural opportunities while avoiding specific risks. Avoid companies heavily reliant on blockbusters facing imminent, high-intensity biosimilar competition (e.g., Stelara, Prolia) without a sufficient pipeline reserve to offset losses. Investment should focus on: 1) Companies with leadership and sustained innovation capabilities in clear growth areas like GLP-1/obesity and IL-inhibitors (e.g., Lilly); 2) Companies capable of effectively managing biosimilar impact and successfully pivoting growth drivers through new drug launches. For pipeline new drug valuations, stricter probability-of-success adjustments are necessary.

Appendix Data Summary

Key Product Prescription Volume YoY Growth & Market Share Momentum