Biologics & biosimilars

In March 2015, USFDA approved first biosimilar - “Zarxio” in USA market under the new regulatory pathway for biosimilars. It was approved for all indications of the corresponding Innovator drug “Neupogen”. This approval comes after 9 years of EU approving its first biosimilar “Omnitrope” in Apr 2006.

The USFDA move opens the largest of the geographic market for biologics to biosimilars. Biosimilars are usually much cheaper than innovator biologics (could be priced at 10-80% of innovator price). Thus, introduction of biosimilar usually prompts the innovators to drop the prices of their innovator product too, changing the access to drug in a significant way. While the extent of impact of biosimilars on the innovator biologics remains to be seen, this approval sets the ball rolling.

The interest level in biologics and biosimilars is seeing a surge. However, scientific and regulatory uncertainties need to be dealt with before tapping into the potential that this market provides. Through this series of articles we attempt to provide some directional inputs for companies looking at global markets as potential area to play in. In this first article, we will be discussing, why the global opportunity for biologics and biosimilars is difficult to ignore.

In case needed, refer annexure 1 for basics of biologics and biosimilars, before reading on.

Biologics Market

After the patent cliff that started in 2012, biologics have come to Big Pharma’s rescue in filling in for blockbusters that lost their position in the tally. In 2012 the expectation was that seven to eight out of top ten drugs will be biologics. In 2014, however, five out of top ten drugs worldwide were biologics, with biologics contributing to 18% of Pharma sales

Table 1: Top 10 drugs by sales in 2014

Source: http://www.statista.com/ & other secondary sources. Note: The ones in orange font colour are biologics

In 2012, IMS Health estimated the biologics market to grow to 200-210 Bn by 2016. The fastest growing segment amongst the biologics is Monoclonal antibodies, with Humira for Rheumatoid Arthritis (from Abbott/Abbvie) and Remicade (from Johnson and Johnson) with sales of $11.9 billion and $8.1 billion respectively in the year 2014. Cancer and related diseases, infectious diseases and autoimmune diseases remain to be the leading therapeutic categories and monoclonal antibodies, vaccines and other recombinant proteins being the most widely used molecules.

With the Biopharmaceutical Research Companies of America reporting 907 biologic molecules(Download 1 below) under development targeting more than 100 diseases in various stages of Human Clinical Trials, the pipeline for biologics looks strong.

Biosimilar market and impact

With most of the biologics due to go off patent by 2020(refer to table 3), a lot of players have turned their attention towards the development of biosimilars.

Table 2: Biologics going off patent

Source: Biologics-Patent expiry, 2011

By 2016 the sales of biosimilars are expected to reach between US$4-6 billion out of 200-210 Bn biologics Market (Source 4). This change in outlook towards biosimilars comes at a time when the pharmaceutical industry is facing the double impact of patent expiry (~USD 54 Bn worth biological expected to go off patent by 2019) and financial pressures on healthcare industry to make significant and sustained cost reductions.

As far as the US is concerned, while the estimates from various sources differ, Express Scripts estimates that Zarxio’s introduction in the United States could save $5.7 billion in drug costs over the next 10 years. It estimated that $250 billion in drug costs could be saved over the next decade if 11 biosimilars in development were approved. With the US FDA opening up the regulatory pathways, the US biosimilars market alone is projected to be worth $11-$25 billion by 2020(IMS Health, 2011).

European market on the other hand reflects a different scenario. Biosimilars were first introduced in the European market. The period of 2005-2006 was marked with the development of guidelines for the approval of biosimilars through an abbreviated pathway. The first product to be approved in EU was Omnitrope (somatropin) in 2006. Around 21 biosimilars have been approved, till date (Download 2 below)

In India, we have 60 approved biologics today, of which more than half are biosimilars. (Download 3 below). Acceptability of biosimilars is much higher in India.

We will look at the Indian market for biologics and biosimilars, in the next article in this series. Stay tuned!

(Balkrishna is founder of Dig Deep Solutions, which is a consulting firm specializing in pharma and life-sciences. Feel free to share your views with us at [email protected]. For more details visit www.digdeepsolutions.com. You can follow us on our linkedin page.)

Annexure1: Basics of biologics and biosimilars

Biologics are drugs whose active ingredients are sourced from living organisms. These products are based on proteins, genes, etc. and hence are not amenable to chemical manufacturing processes. Biologics were considered to be impossible to copy, because of their complex molecular structure, unlike small molecules. With advances in research, the scientific community realized that even biologics can be copied.

However, deciding if the biosimilars (generic copies of biologics, also known as follow-on biologic or subsequent entry biologic) can really replace the biologics equally effectively in all pharmacokinetic and pharmacodynamic functions remained a question. Regulated markets took some years to lay out the regulations for approval of biosimilars. In the US, The Biologics Price Competition and Innovation Act of 2009 was passed in March 2010. Following which US has approved its first biosimilar in March 2015.

 Sources:

1. Statista 
2. IMS Health 2012
3. Business standard 

PDF files for downloads:

1. America’s biopharmaceutical research companies - 907 biologics under development
2. List of Biologics approved in EU
3. List of Biologics approved in India