where we stand today?
Hisun Pharmaceuticals, China
Market overview and expectations
Biopharmaceutical drugs have become an essential part of our modern pharmacotherapy. In 2010, biosimilar sales were around $235 million in the EU, Japan, Canada, and Australia compared to total biopharmaceutical sales of $134 billion. One study reported that brand erosion will be greater in the United States, for example with half of the physicians started prescribing the erythropoietin (EPO) biosimilar within 6 months and 88 % within a year. It has been estimated that in a few years biopharmaceuticals have the potential to reach up to 50-60% share in the global pharmaceutical market.
The figure below gives a snapshot of total biologics market and biosimilars share for a period of past 5 years (2006-2010) when compared to future projections for the next 5 years (2011-2015).
Market data has proven that chemical generics lowered drug prices by as much as 90 % and captured a large share of the branded drug market within a short period of time, often within a few months. On the other hand, it is being estimated that due to basic cost and business considerations, prices of biosimilars, however, are probably going to be only 20 % to 30 % less than the branded biologics. If so, this plays in favor of the brand as the brand product manufacturer could reduce its price by a fairly small amount, perhaps 10 % to 20 %, to discourage buyers from switching to the biosimilar. The penetration rate for biosimilars is expected to be higher in patient populations that have high turnover than in chronic disease populations. Patients and physicians may be reluctant to switch to a biosimilar for small cost savings if the branded product is working. On the other hand, new patients may be more willing to try a biosimilar than the brand product.
Biosimilars in the EU are usually priced 15 % to 35 % below their reference products, but they have achieved little market share because of their lack of interchangeability. A major exception is in Germany, where EPO biosimilars garnered 52 % of the market in 2009. Germany’s Federal Healthcare Committee has encouraged the use of biosimilars and is able to bargain for rebates. Sandoz, for example, increased its Binocrit discount in 2007 from 15 % to 33 % and obtained 30 % of the market share.
On the other hand, in the United States, Sandoz’s biosimilar somatropin (Omnitrope), priced at least 25 % less than the branded drug, garnered only $4 million in sales and a 1 % market share even after three years on the market.
As it stands today, the regulatory landscape is quite complicated and is evolving every day as we speak and debate about biosimilars development and commercial availability. Let us take a glimpse of those challenges and difficulties coming in our way. Most importantly is that understanding and beliefs keep on changing as more as more discussions and facts surface during usage in patient population.
Biosimilars are available in the European Union (EU) and Canada because regulations permit their approval. EU first approved a biosimilar in 2006, since then there are 16 biosimilars for three reference (brand) products: erythropoietin (EPO), granulocyte-colony stimulating factor, and somatropin (human growth hormone).
In November 2010, the EU set out broad guidelines for the approval of biosimilar monoclonal antibodies (mAbs), allowing for the possibility of different diseases being addressed by the same copy mAb — this was more than four years after a biosimilar process was approved for less-complex biologics. So far, the European Medicines Agency (EMA) has received requests for scientific advice for more than six biosimilar mAbs.
The situation for biosimilar approvals in USA is quite different and complex. Most biologics go through a Biologics License Application (BLA) process. The FDA is on their way to developing a pathway for approving biosimilars through an abbreviated BLA (aBLA) process. Last year in February 2012, the FDA issued preliminary guidelines for biosimilar entry, which was supposed to be finalized for implementation as “actual working guidelines” by the end of 2012. Based on that, a biosimilar manufacturer can then apply for biosimilar status for its drug under an aBLA. The regulatory approval process may take at least another two years, so the first biosimilar would not enter the U.S. market until 2015. On the other hand, regarding biosimilar mAbs in the United States, it may take four to five years to create a pathway and another two years for the first approval, in which the earliest a biosimilar mAb can hit the market is 2017-2018.
In the meantime, in the United States, four so-called biosimilars have been approved under 505(b)(2) of the Hatch-Waxman Amendments to the Federal Food, Drug and Cosmetic Act with a hybrid Abbreviated New Drug Application, generally used for small-molecule drugs.
The U.S. Food and Drug Administration have long held that not only must the product meet quality specifications, but also the process that makes the drug must also rigorously meet process specifications. The FDA will most likely require some clinical trials albeit shortened ones. Human testing will not be an across-the-board requirement. At the end of the day it depends on how confident the industry is and able to make the agency comfortable and confident of the absolute sameness to the innovator product.
Now if we look at purely the scientific fundamentals, biologics are made by genetically-engineered microorganisms (cells) that conduct a symphony of biochemical reactions. You give these cells media and control their environment such as temperature, pH and dO2, and the cells do all the work of making your protein out of the DNA. Since the process specification includes these proprietary cells, it stands to reason that no one can produce the drug product if they don’t have your cells. For this reason, biotechnology companies have not been as worried about patent expiration. Moreover, this is also the fundamental basis and rationale for those “schools of thought” who advocate that interchangeability is a big question and risk of treatment management.
Other issues that must be resolved include the basis for testing whether a product is biosimilar to the branded product. Unlike chemical drugs, a biologic constantly evolves and can change as the manufacturing process changes, a phenomenon known as drift. Which product will be the benchmark — the original branded biologic or the one currently being manufactured? In some cases, a biosimilar could be more similar to the branded product than the branded product is from batch to batch.
Will the FDA’s biosimilar policy differ by product? Generally, efficacy and safety have to be demonstrated separately for each indication and for postmarketing. Unlike chemical generics, biosimilars probably will have to go through postmarketing surveillance, or pharmacovigilance, which helps determine whether the biosimilar is similar to the branded product and what side effects occur in the biosimilar that are not present in the branded product. The biosimilar product each patient is taking will be tracked. Tracking may require that reference biologics and biosimilars be named differently and that their drug codes be different. Still, if the original drug is no longer produced, can it still be used as a benchmark? Will the FDA allow clinical trials done outside the country, such as those done in the EU, to be used for the approval process?
How the future looks like: success stories to share and learn from
Indeed, the upcoming expiry of a few of the innovator patents have triggered the thoughts and initiated the development of alternative versions called “biosimilars”. Biosimilars are biological products that are supposed to be replicas of their brand innovator biopharmaceuticals. After several years of in slow lane, important changes are driving a new momentum in business for biosimilars. So there is an opportunity, no doubt but the path ahead is quite painful and bumpy according to a few experts and “gurus”. Here are a few examples of business successes to learn from in their strategies and thinking.
Let us first see Humira’s path of success and how it was paved. The drug was initially approved in 2003 for rheumatoid arthritis but later on Humira has taken billion-dollar leaps with help from a series of new indications: psoriatic arthritis, ankylosing spondylitis, plaque psoriasis, Crohn's disease, and now finally ulcerative colitis (7th indication) that was approved in October last year. The drug accounted for $ 10.0 billion of sales in 2012 compared to $5.5 billion in 2009 for Abbott.
This is certainly a living example of a lucrative business and the company is circling the wagons in an effort to protect Humira from biosimilars. Abbott filed a citizen's petition to hold off copycat versions, claiming FDA would need access to Abbott trade secrets to determine whether those copies were properly rendered. Abbott points out in its petition that courts have confirmed that data submitted to FDA are considered trade secrets. The company further contended that biologics applications submitted to FDA before the initial biosimilars legislation was approved-in 2009-all contain trade secrets that are similarly protected. As a bonus legal argument, Abbott also claimed that FDA shouldn't approve copies of any biologic drug approved before the biosimilars legislation pathway is clear and approved.
Now let us look at the track record history of second successful drug launch Enbrel by Amgen. This is the second biggest drug of the year with the sales to the point of about $9.0 billion in 2012, (profit sharing with Pfizer).
Merck planned to develop biosimilars with a big effort back in 2008, announcing plans to invest $1.5 billion into the burgeoning business. But somehow for justified business reasons Merck ran into one hurdle after another in their attempt to develop new versions of old biologics. Its first big program for a follow-on version of Amgen's Aranesp was dropped in 2010. Enbrel was set to lose U.S. patent protection in October 2012 and with that in consideration, in 2011, Merck hoped to work towards a biosimilar version of Enbrel but unfortunately the efforts and inspiration were rocked by a surprise patent announcement from Amgen. Now with a new patent in place the drug is further protected for another 17 years. That gives Amgen and partners till 2028 to reap Enbrel sales in the 5 different therapeutic sectors/diseases for which it's approved with all this new development in place. Unfortunately, Merck’s initial teamed up efforts with South Korea's Hanwha Chemical to develop an Enbrel version were squashed until 2028.
Samsung, another new player is taking significant steps (including building the capabilities) toward becoming a major player in the biopharmaceutical industry. Now Merck is joining hands with Samsung and they both believe they have the right approach at least now.
Amgen, the world's largest biotech, is fighting on both sides of the biosimilars battle and decided no matter what happens, they were going to win. “The FDA is being forced to develop a biosimilars approval pathway as a part of Patient Protection and Affordable Care Act "ObamaCare". Amgen has been focusing on defending their superior position by indicating how difficult it is to manufacture biologics and how consumers ought not to trust biosimilars. They have said comparing biologics is like comparing snowflakes and it is really hard to manufacture biologics. When copies of drugs are made, you can't be certain of their safety/efficacy and thereby pushing for restrictions on U.S. pharmacists' ability to dole out biosimilars in place of the originals.
Then, a few months ago Amgen rocked the biotech industry's proverbial boat with their announcement that they'd be entering the biosimilars market. Sources in the industry predict that Amgen, starting in 2017, will be making six generic versions of blockbuster biologics including Humira (of Abbvie), Remicade (of Janssen), Avastin, Herceptin, and Rituxan (of Roche) and Erbitux (of Eli Lilly). By law, the only way to do this is to renege on the "product and process" cGMP principle. This comes as a surprise to many, because for years, Amgen has been saying that biologics really can't be copied. Amgen is facing patent expiration on its blockbuster biologics and unlike pharmaceutical companies, there really wasn't a need to be worried about patents expiring for biologics. But the fact of the matter is that companies like Amgen are equally worried and are therefore scratching their heads to come up with a win-win strategy to keep the business running.
Once we look at and carefully analyze the above case examples it is very clear that even the innovator of these biopharmaceutical molecules are equally worried and concerned of the patent cliff. Their worry is legitimate as they have spent millions of billions of dollars before they started reaping the returns of their investment. In order to safe guard their business interests they are and will be ready to go any depths of technical and business tactics so as to keep the competition away of their domain. These man-made or artificially created hurdles are one of those endless challenges that are standing and staring at so called “generic competitors” or biosimilar developers and market entrants.
Another hurdle in our way is immunogenicity and interchangeability. Even though we have discussed in brief about the interchangeability while talking in regulatory landscape, let us look at this aspect more closely and understand its implications.
The most serious safety concern, unique to biologics, is immunogenicity — a patient's antibody reaction to a drug that the body perceives to be a foreign microorganism or virus. The science does not exist for the precise duplication of a branded biopharmaceutical. Thus, biosimilars are similar but not identical to the reference product. Also, for interchangeability, expensive crossover studies may be necessary for which recruiting could be difficult.
This means that there will not be automatic substitution at the pharmacy level. If physicians prescribe a branded biologic, pharmacists will have to dispense it and not the biosimilar. Interchangeability probably will not be allowed until the biosimilar has a track record shown through postmarketing studies to produce results identical to that of the branded product.. The EU mandates pre-approval clinical testing and post-approval monitoring for biosimilars, and the EMA requires all drugs to have post-marketing pharmacovigilance to ensure drug safety.
But the question remains: Because both the branded drug and the biosimilar will probably change over time (drift), will they always be considered interchangeable or will they have to be reassessed?
Having said and shared the brief update of the biologicals market and challenges ahead, it is safe to say that the future of biosimilars is quite promising with over 63 billion dollars global biologic sales products due to come off patent by 2016. Immediate values and returns will be sourced from pharma- emerging markets however in the long run the US and EU will be the cornerstone of global biosimilar market powering a sector worth between US $11 billion and US $25 billion by 2020. The core drivers will be regulatory landscape, interchangeability, and immunogenicity to address and refine. Since both the potential opportunity and investment in terms of technical and financial is huge therefore the competition will be among big and tough muscle organizations with deeper pockets to make it happen and drive the market.
About the Author
Dr. Jack Aurora is Ph.D. in pharmaceutical sciences with over 19 years of Quality and Compliance driven research and management experience to his credit. Dr. Aurora’s research experience is in all the dosage forms including but not limiting to solids, semi-solids, liquids and sterile with special emphasis for Novel Drug Delivery Systems including Controlled-Release and Nasal development and mfg. operations. At present Dr. Aurora is working in the capacity of Chief Scientific Officer, Generic Drugs for Hisun Pharma Co., Ltd. based in China. In this role, Dr. Aurora is responsible for the set-up and implementation of the newly constructed facility for US FDA and EU submission, approval and commercialization aspects of generic drug development. Prior to this he has worked as VP Formulations Operations with Azopharma Product Development Group, and with Perrigo Company, Pharmascience, Labopharm, Patheon and Ranbaxy (from where he started his professional career) in various management and technical capacities.
Dr. Aurora is also a consultant with GLG Healthcare and Biomedical Council and Guidepoint Global, associations of leading physicians, scientists, and other healthcare professionals. He is also acting as adjacent faculty member and Prestige Appointment with School of Pharmacy; University of Toledo, Seneca College and Toronto Institute of Pharmaceutical Technology (TIPT) based in Toronto. Dr. Aurora is also member of visiting scientist program sponsored by AAPS. Dr. Aurora is also editorial advisory board member of various scientific publications such as Drug Delivery Technology, Contract Pharma and Business Briefing scientific and business focused publications from US and Europe.
Dr. Aurora research focuses and wealth of experience include development of Controlled-Release Systems, Pelletization Technology, and NDA 505(b)(2) and ANDA developmental and regulatory approval pathways. In the field of controlled-release development, he has 3 US and EU patents to his credit and another four are in process. He has also successfully managed global research teams operating from different parts of world (with different work culture and practices) under one umbrella for cost and efficiencies management.
With the additional teaching assignments and speaker opportunities, Dr. Aurora has grown to a seasoned and matured professional with in depth technical and management strengths and excellence to contribute for the success and growth of an organization.
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