While conventional generics are expected to face competition and pricing pressures in most developed markets, Indian pharmaceutical companies have already started gearing up for the next big thing — biosimilars. These are generic versions of biological medicines that depend on the same mechanism of action, and are used for the same therapeutic indication, as the innovator product.
Various drug makers, such as Dr Reddy’s Laboratories, Cipla, Lupin and Wockhardt, are all set with their plans to cash in on the opportunity. However, experts suggest that to take advantage of it, these companies need commitment, along with a well-charted strategic plan, investment and technical synergy because biosimilars is a long-term game, with many hurdles on the way.
The opportunity
The biosimilars industry, globally, has been growing stupendously. According to market estimates, the global market for such drugs is seen at around $30 billion and at a compound annual growth rate of over 50 per cent during 2010-15. This growth is driven by two key events: Upcoming patent expiries of leading biologics and a financial crisis coupled with increasing health care costs that has required systems in almost all developed countries to look for low-cost alternatives.
| THE NEW WAVE Diseases such as cancer and diabetes will be key areas for biosimilars | |
| Core therapy areas for biologics (MAT 12/2010) | Market ($ billion) |
| Insulin | 15.9 |
| Anti-TNF | 15.8 |
| Oncology (MAb) | 12.5 |
| EPO | 7.6 |
| Multiple sclerosis | 7.3 |
| CFS-G | 5.0 |
| Blood coagulation | 3.1 |
| Ocular antineovascular | 2.0 |
| Antiviral (no-HIV) | 1.5 |
| Others | 16.5 |
| Source: IMS Health | |
While contribution of innovative biologics is continuously increasing, compared to the total pharmaceutical branded sales, a number of top-selling biologic brands such as Herceptin, Enbrel, Humalog, MabThera, Remicade and Aranesp are expected to go off-patent over the next five years. This will open up a wealth of opportunities for companies developing biosimilars.
“After several years in the slow lane, important changes are driving new momentum in the market for biosimilars, paving the way for their accelerated growth over the next decade and beyond,” a recent report by IMS Health says.
According to Biocon General Manager - Business Strategy & Program Management Paul Vazhayil Thomas, biosimilars are also an important part of harnessing the growth potential of the emerging markets. “After its history of success with developing and manufacturing small molecule generics for the emerging and developed markets, it’s natural for Indian companies to look to biosimilars as an avenue for future growth,” says Thomas. Biocon is one of the leading players in biotechnology and an early Indian entrant into the sector. The company is building a state-of-the-art facility in Malaysia to supply insulin for the global market.
Experts also say that the burgeoning aging population and diseases like cancer, diabetes and rheumatoid arthritis will spearhead this new wave of biosimilars.
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The India action
Recognising the opportunity, India has already taken its first step forward to tap the emerging opportunity in the biosimilars’ space. While almost all major Indian drug makers have outlined plans, identified products and set aside investment budgets to develop a robust product pipeline, some have even started rolling them into the market. For instance, Dr Reddy’s Laboratories has already launched a few of its significant biosimilars in emerging markets. The current biosimilars portfolio of Dr Reddy’s Laboratories constitutes of filgrastim, peg-filgrastim, rituximab and darbepeotin alfa, which have commercial presence in 13 emerging countries. “Soon, I expect to see Dr Reddy’s biosimilars entering developed markets,” Chairman K Anji Reddy says.
On the other hand, companies like Cipla are making huge investments in India and outside to acquire manufacturing facilities and potential product pipelines in the biosimilar segment. The company has not only acquired facilities in India and China to develop biosimilars, more recently, it has also rejigged some of its investments in China to divert more funds towards biosimilars.
Similarly, Wockhardt and Lupin have made their foray into the niche segment. While Wockhardt is among the early entrants and has developed insulin and analogues, Lupin is now on its way and plans to soon launch its first of two biosimilar drugs for oncology in India by the end of this year. The company currently has a total of 10 proteins in different stages of development.
The Department of Biotechnology, along with the drug regulator, has also got into action and had recently floated draft guidelines for biosimilar drugs. The proposed norms outline specific requirements for pre-marketing and post-marketing data, apart from guidelines for pre-clinical and clinical trials for biosimilars. The move is aimed at upgrading and maintaining the quality of biosimilar products that are manufactured in India.
Hurdles
However, experts point out that various challenges remain. “For new entrants, biosimilars pose very different challenges to those presented by small molecule generics, with more demanding requirements in terms of clinical development, market access, manufacturing and sales and marketing capabilities,” the IMS report says.
According to Thomas, though biosimilars hold the potential of providing higher margin and higher growth revenue streams than traditional small molecule generics, achieving regulatory and market success will require diligence and very strong technical skills. Agrees Praful Bohra, senior analyst, Nirmal Bang Securities. “Though a lucrative opportunity, it is not easy to be successful in this venture. A company would not only need huge investments but also dedicated manufacturing facility and technical expertise to make a mark and the payback period is still long,” sayd Bohra.
Developing a biosimilar requires significant investment, sophisticated technologies and clinical trial expertise. Unlike conventional generics, where companies have to prove bioequivalence of their drug as compared to the original one, in the case of biosimilars, pharmaceutical companies have to conduct clinical trials to get approval.
According to the IMS report, the average development cost for biosimilars ranges from $100-250 million if plant development cost is included.