Trials and Tribulations of the Growing Biosimilars Market

22nd September 2010 (Last Updated September 22nd, 2010 18:30)

Liam Stoker examines the rise of biosimilar medications and reveals future developments set to revolutionise the market.

Trials and Tribulations of the Growing Biosimilars Market
EPO sales following the introduction of biosimilars into the market.

Biosimilars, or follow-on biologics as they're sometimes known, are subsequent copies of innovative biopharmaceutical products, made following the expiry of patents and exclusivity periods. The generics of the biopharmaceutical sector may have been subject to a slow and faltering start, but the momentum is well and truly behind them now.

As part of substantial healthcare reforms in the US, on 23 March 2010, Barack Obama signed the Patient Protection and Affordable Care Act as a federal statute. Whilst the expansion of Medicaid may have grabbed most of the headlines, the Approval Pathway for Biosimilar Biological Products legislation promises to radicalise attitudes to biosimilar medications.

This particular section allows biologics to maintain a 12-year period of market exclusivity after approval, providing the industry with a definitive timeline that, had the Generic Pharmaceutical Association (GPhA) got their way, could have been just five years. Such was this expansion, that the GPhA labelled the act as a "pathway to the wrong destination for patients in need of safe and affordable biogenerics," whilst also dismissing it as a "disappointing distraction".

With an extended period of exclusivity, biotechnology companies now have a predictable market to operate in and one that investors could see as lucrative.

The Pathway for Biosimilars Act addresses a number of key issues surrounding the approval of biosimilar medications, including guidance documents, interchangeability and measures to ensure transparency in patent disputes. Applications will have to include demonstrated proof of similarity with a particular reference product as well as clinical trials that included assessments of immunogenicity.

Biosimilar history

"Biosimilars are copies of innovative biopharmaceutical products, made following the expiry of patents and exclusivity periods."

The approval of the Patient Protection and Affordable Care Act paves the way for the culmination of fresh biosimilar medications, following considerable progress made in the field in recent years

In October 2009, Japan delved into the biosimilars market when Sandoz launched its recombinant human growth hormone somatropin. The move followed the drug's release in the EU, US and Australia under the name Omnitrope in 2006, and set a precedent for the approval of biosimilar medications.

Four months later, the European Committee for Medicinal Products for Human Use (CHMP) recommended approval of Hopsira's Retacrit subcutaneously as a treatment for renal failure, becoming the first biosimilar, epoetin, approved to provide an alternative option to intravenous delivery of the drug.

This followed results in a report released by Datamonitor earlier that month, alleging that the high cost of biological drugs, combined with the need to cut spending in the pharmaceutical market, had led to considerable momentum in the biosimilars market, whilst also claiming that Europe had become a testing ground for the innovation of biosimilars.

This led to the findings of the decision resources report, which found that 33% of surveyed US physicians would prescribe a biosimilar based on information from just one Phase III study, as opposed to 20% of physicians who would in France and Germany, indicating the market potential of generic biopharmaceuticals in the US.

Further Datamonitor reports alleged that the biosimilars market could grow to more than $2bn across the seven major markets by 2014 in the wake of key patent expiries, offering manufacturers the opportunity to position themselves in the biosimilars sector in anticipation of lucrative targets to follow. The report went on to claim that the US market represented the greatest opportunity for emerging biosimilars, citing the size of the market coupled with the extensive use of generics, making it an attractive prospect for those companies developing generic medications.

In May 2010, Teva Pharmaceuticals began testing its first biosimilar, a version of Roche's blockbuster rheumatoid arthritis drug Rituxan. The Israeli drug manufacturer launched a clinical trial of the medication, labelled TL011, which is scheduled to complete in mid-2011, with Roche's medication set to become the first major drug to face competition from a biosimilar since the healthcare reforms in the US.

Generic hurdles

There are, however, still a number of aspects preventing a flood of biosimilars from hitting the shelves. Although the market is expected to be worth $10bn by 2015, high development costs coupled with complex manufacturing and legal hurdles are preventing generic drugmakers exploiting the nearing expiry of patents.

"Europe has become a testing ground for the innovation of biosimilars."

It is expected that these hurdles will result in a closed circle of specialist companies willing to delve into the potentially lucrative market, with both Merck and AstraZeneca already confirming their presence in what promises to be a high-risk, high-reward field. Development of a biosimilar compound can take up to eight years with costs between $100m and $150m, which, when added to production and marketing of a copycat version, can cost up to 50 times the amount needed to launch a conventional generic.

Despite the high development costs and risk element, the next targets for generic development are already being lined up. Therapeutic antibodies, themselves the most complex class of molecules for medical use, are widely expected to follow human growth hormones as a target for biosimilar production, with Johnson & Johnson's Remicade and Roche's Rituxan specific targets given their impending exclusivity period expiry.

Over the next five years, 90% of today's biotechnology drugs will become off patent, leading experts to believe that of the £64bn in global revenues from biologics to lose patent protection, $10bn are expected to face biosimilar competition and annual sales of biologic drugs will grow up to three times faster than conventional drugs.