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GfK HealthCare | September 2011 | |
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The Emergence of Biosimilars and Their Impact On The Pharmaceutical Market  By Chris Krattiger, Head of Global Marketing, GfK HealthCareWhat are biosimilars? Although generics – which are copies of chemically produced drugs – have been around for decades, biosimilars are so-called ‘new land’. Much has been said about biosimilars, but many uncertainties still exist around this new generation of drugs. The term biosimilars is derived from “similar biological medicinal products,” and biosimilars can be produced and marketed after patent expiry of an original biologic. Laymen often refer to these products as generic biologics – as they intend to be copies of the original brand – but as the name biosimilar already reveals, they are similar rather than the same. Within this paper, we will discuss this upcoming generation of drugs and reveal:
Biologic agents have offered very significant benefits to many patients previously with intractable diseases across a wide range of diseases, most notably in the treatment of cancer, rheumatoid arthritis and many other autoimmune-based conditions such as Crohn’s disease. Following a period of decline in new chemical entities they provided a much needed injection of innovation to drug treatment. The biologics or biopharmaceuticals market is expected to have global sales in 2011 of more than $108 billion US$. In addition to being large, this segment of more innovative drugs is growing at a faster rate than the overall pharmaceutical market. With a projected 8 percent average growth over the next years, sales will likely be at $160 billion in 2016. Size of the biologics market  Biologic agents have high average treatment costs with the top 10 sold biologics accounting for 50 percent of global biologic sales. Therapy costs per patient can be $5,000 to $10,000 per month for cancer treatment and $1,000 to $2,000 per month for the anti-TNFα biologics in rheumatology. Average cost of biologic agents  In the next five years, 13 of these high-priced biologics will lose their patent protection after which any regulated manufacturer will be able to produce and market them, a great opportunity for companies wanting to develop biosimilars. What are the hurdles involved in the process of developing a biosimilar? Compared to a chemical molecule, a biologically produced antibody has an extremely complex structure and exact copying – which can be done with traditional small molecule drugs – cannot be done with biologics. In other words, a biosimilar is never the same, only similar to the original innovative drug. Structure of a Chemical Molecule vs. a Peptide and Biologic Monoclonal Antibody  As a result of this, the development and manufacturing process of biosimilars is extremely complex. High capital investments are required to develop the cell line, set up the highly complex biological manufacturing process and comply with t extremely strict and sophisticated regulatory requirements. Biosimilar producers must meet the same level of good manufacturing processes as the principal manufacturers and additionally will be required to invest in clinical trials (which is of course not needed for generics). The precise regulatory framework around the approval process of biosimilars is still in development in many areas of the world, including the U.S., but it is likely that European legislation, which is most advanced, will be followed. According to European guidelines, biosimilars will need to be tested in a Phase I and a more extensive randomized Phase III trial to establish that they are equally efficacious and tolerated as the originator agent. This of course is not required for the traditional generics where the regulators accept that they are identical in structure and therefore assumed to be identical in performance and safety. Conducting clinical trials is time consuming and expensive. In fact, it is expected that the developmental costs of a biosimilar will be in excess of $100 million – a large sum when compared to the traditional generic drug, which is more likely to cost between $1 million and $10 million to develop. Development Cost of a Biosimilar  There is also a risk of failure, in that the biosimilar could prove to be inferior in the Phase III trial., This is an additional risk which is not present with the manufacture of a traditional generic. Literature gives a wide range of suggestions as to what this failure rate might be, but most estimates range from 20 percent to 50 percent. There is the further risk that a new clinical development or an enhancement to the originator brand will have changed the gold standard by the time the biosimilar launches. This is, for example, possible when looking at rituximab. It could well be that by the time the biosimilar version is approved, a next generation anti-CD20 MaB has been launched and the biosimilar would be competing against the old standard of care. During the first years, biosimilars cannot be automatically substituted for the original brand – something which in many countries is now standard practice for generic drugs. This means that the stakeholders involved in the drug treatment decision, which include physicians, patients and payors, will need to be convinced to switch to a biosimilar at a marketing cost the traditional generic manufacturers have not previously had. One very important open regulatory question is whether biosimilars will receive blanket approval across several indications with efficacy evidence in only one, or whether trials will have to be conducted in all indications in which the originator drug is approved. The industry will strongly argue that each indication will require separate filing and supporting evidence, leading to further costs for any potential biosimilar manufacturer. Of course this will be strongly resisted by the biosimilar manufacturers. Regardless of the last issue, which is still open, it is evident that the investment needed to introduce a biosimilar to the market is not as substantial as for the original innovative drug, but it is also clear that it is far more expensive and time consuming than launching a generic drug. The biosimilars market 2011 To date only 13 biosimilars have received European regulatory approval, and their success has been moderate. This is probably due to the fact that physicians, patients and other stakeholders are still lacking confidence and clearly this insecurity is not yet outweighed by the potential cost savings. Biosimilars launched to date fall in the category of supportive care agents, which tend to be lower cost agents and therefore the pressure to switch may also be lower. How will biosimilars change the pharmaceutical marketplace? The jury is out as to how successful biosimilars will eventually be in the marketplace. The extensive investments required suggest there will not be many competitors in this market, and the previously high discount levels when generics enter the market are unlikely with price reductions predicted to be around 20 percent to 30 percent compared to the original brand. Will this price difference be enough to switch? That will clearly depend on the trust that physicians have in the biosimilar, which in turn will depend on the clinical data shown, trust in the manufacturer and also perceived risk taken when switching to a newer alternative. The perceived risk taken is very individual and every physician, patient and payor will have a somewhat different opinion when faced with this question. Clearly, the biosimilar will always be behind in available longitudinal safety and efficacy data existing for the originator drug. In the case of life-saving drugs: i.e., Herceptin in the adjuvant BC setting, or Rituxan/MabThera in NHL, physicians and payors’ willingness to switch will likely be lower as trust in longitudinal safety and efficacy plays a very significant role. On the flipside, one would expect that supportive care agents would be considered easier to replace. The interesting reality is that potential drug savings will be greater with the more expensive life-saving agents, but here the willingness to switch is likely to be lower. The success of a biosimilar will ultimately depend on the balance of perceived level of trust, or clinical reassurance over potential cost savings. So, the answer to the question ‘Is it just about price’ is clearly no, at least not at the moment. Especially at the beginning, biosimilar producers will have to establish trust in their products and launching a biosimilar will not be very different from launching a follow-on branded compound. What about the argument of improved access due to lower costs? The biosimilar producers argue that a lower cost treatment option, which has shown in clinical trials to be equally efficacious as the originator brand, will be favored, especially long term, once all prejudices about biosimilars are negated. Their main argument is that the availability of lower priced alternatives will give broader access to life-saving drugs, something which payors who look at health care budgets in their totality must take into account. The pharmaceutical industry defending the position of the originating drugs will argue that access is not an issue and all patients – at least in the Western world – who need a life-saving biologic agent will get access to it, through different foundations or price cap mechanisms put in place. What about the future? Looking back at history it is very likely that biosimilars, if indeed they show to be equally efficacious and safe as the originator brands, will be accepted as alternatives to the originator brand. Pharmaceutical companies will have to react potentially by lowering the price of the originator drugs and ultimately this will have a positive impact on costs of biologic therapy. And what does it mean for us marketers? Launching a biosimilar drug will require intensive marketing to convince all relevant stakeholders of its clinical benefit and safety. Only when this trust is established will price become a relevant argument. In short, for marketers this is a win/win situation. The biosimilar producers will need us to help them build trust around their products. The pharmaceutical companies will need our help to defend the position of the originator drug. |
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