This is intended to be a concise, high level overview of the current biosimilar environment in the U.S. with links to articles and other blogs that offer more detailed discussions with opinions and strategies that relate to the regulatory, legal and commercial environment surrounding biosimilars.
The review includes the following sections: summary, definitions, background, regulatory status, and industry trends & news, including recent transactions from the sector.
While biosimilars and interchangeables present a huge commercial opportunity, the regulatory uncertainty and technical complexity surrounding the development of these follow-ons and the marketing skill that will be required to win over doctors and patients are already separating the potential winners from the losers with those willing to make the necessary high-cost, long-term investment best positioned to crack this highly lucrative market, which ultimately may pit innovator against innovator, rather than innovator against the traditional concept of a generic.
Biologic – refers to biopharmaceutical medical product created by a biologic process, rather than being chemically synthesized. Examples of biologics include medicinal product such as a vaccine, blood or blood component, allergenic, somatic cell, gene therapy, tissue, recombinant therapeutic protein, or living cells.
Biosimilar – or follow-on biologic, refers to a product similar to a biologic product already approved for sale. Biosimilars comprise an active drug substance made by a living organism or derived from a living organism by means of recombinant DNA or controlled gene expression methods. From the Biologics Act, a biosimilar is a biological product that “is highly similar to the reference product notwithstanding minor differences in clinically inactive components” and for which “there are no clinically meaningful differences between the biological product and the reference product in terms of the safety, purity and potency of the product.” Regulatory authorities have provided guidelines in an attempt to better define the above terms and criteria.
Interchangeable – refers to a product interchangeable with a biologic product already approved for sale. The criteria used to classify a follow-on as “interchangeable” are stricter than those for biosimilars. Therefore, an interchangeable can be expected to produce the same clinical result as the reference product in any given patient
* The worldwide market for biologics—therapeutic proteins and other biologically engineered drug products—now tops $175 billion a year1.
* These pioneering medications are expensive to develop and manufacture, but generally generate far higher revenues than traditional small-molecule drug products.
* Blockbuster biologics include such widely prescribed medications as Humira®, Rituxan®, Avastin®, Herceptin®, Remicade®, Lantus® and Enbrel® – all of which occupy a spot among the top selling drugs of all time with peak year sales all exceeding $5 billion2.
* Biosimilars, or follow-on biologics, refer to products similar to, or in some cases interchangeable with, biologic products already approved for sale. These biopharmaceutical medical products comprise an active drug substance made by a living organism or derived from a living organism by means of recombinant DNA or controlled gene expression methods.
* The molecular structure of biologics, compared to that of pharmaceuticals, is complex, and the data required to demonstrate biosimilarity, is also more complex than the bioequivalency requirements for pharmaceuticals3.
* However, biosimilars present a significant opportunity to reduce healthcare costs (e.g., top 5 Medicare expenditures are biologicals4), while also offering innovators, and their competitors, greater access to a biologics market that is likely to lead the pharmaceutical industry for the foreseeable future.
Regulatory Status – The Biologics Act
* The FDA gained the authority to approve biosimilars (including interchangeables that are substitutable with their reference product) as part of the Patient Protection and Affordable Care (PPAC) Act, or ACA, signed by President Obama on March 23, 2010.
* The Biologics Act, a subtitle of ACA, brings the U.S. in line with other jurisdictions that already have enacted similar measures. The European Union pioneered biosimilar legislation in 2005. India and China have also recently enacted laws governing the development of biosimilars.
* Although the Biologics Act granted the FDA authority to approve follow-on biologics theoretically through an “abbreviated pathway”, the agency has yet to approve a biosimilar, at least in part due to the complexity of biologics.
* Prior to the implementation of the ACA, only a few subsequent versions of biologics were authorized in the U.S. through the simplified procedures allowed for small molecule generics, namely Menotropins (January 1997) and Enoxaparin (July 2010), and a further eight biologics through the 505(b)(2) pathway.
* Non-patent exclusivity – The passing of ACA guarantees the reference biological a 12-year marketing exclusivity period from the time of FDA approval. During this time, the follow-on product cannot be launched – regardless of patent protection or a lack thereof. This includes a provision similar to the Hatch-Waxman Act that precludes the filing of an application for a follow-on biologic product until four years after the launch of the innovator’s product5.
Regulatory Status – FDA Guidance
* Last February, the FDA released initial drafts of guidance aimed at the implementation of the Biologics Act and reflect the agency’s current positions on certain aspects of its provisions6. However, great uncertainty remains.
* Much of the uncertainty revolves around the requirements for demonstrating biosimilarity, starting with extensive structural and functional characterization of the proposed and referenced product. This characterization is the “foundation” of a biosimilar development program and informs the type and extent of additional studies that the FDA will require. The entire process may require applicants to account for variability associated with manufacturing, while also performing toxicity studies in animals and clinical trials in humans.
* The drafts leave several issues unresolved: The FDA did not address what standards would be necessary to demonstrate a follow-on biologic’s interchangeability with a reference product. The agency did not provide specific requirements, such as the scope, size, and number of clinical tests, or the quantity of production lots to be tested. Nor did the FDA address biosimilar naming conventions, with innovators arguing that biosimilars should have names that are different from those of the reference biologics. Finally, the guidelines do not address the exclusivity periods or patent dispute resolution procedures.
* In August 2012, the FDA conceded that its progress in completing and finalizing rules has been slower than it had hoped, and that it has still not provided the industry with many details. In particular, the FDA noted that it has not yet dealt with interchangeability.
* Although the FDA has not yet approved a biosimilar or decided whether a biosimilar is interchangeable with a brand-name biologic, this has not stopped more than a dozen state legislatures from considering bills that would allow substitution7. The states are being challenged by big biotechs such as Genentech and Amgen who aim to keep rivals from having easy entre to their lucrative markets.
* Based on the guidelines provided by the FDA, together with the costly manufacturing processes, it is estimated the development costs for biosimilars could be between $75–250 million per molecule8.
* Biological brands with a total global market value of over $40 billion in annual sales are expected to lose patent protection by 2016.
* According to the PharmaExecBlog, the peak penetration of biosimilars over four years has been between 10 and 35% (although in Europe somatotropin and filgrastim have provided contrasting examples). The price erosion of the originator brand following biosimilar introduction has been modest — in the range of 20 to 40% in Europe. There is a tendency to price close to the originator and then to compete for share using institutional rebates and contracting rather than competing directly on price9.
* The Alliance for Safe Biologic Medicines, a group that includes Amgen, Genentech and the BIO trade group, wants clear lines drawn for substitution, such as giving physicians authority to specify “do not substitute” and that such an option should override any policy from payers or state law that would have substitution be the standard or default practice10.
* An October 2012 survey from BioTrends Research, showed oncologists in the U.S. and around the world indicated that 42-45% on U.S. docs would take a “wait and see” attitude toward prescribing biosimilar mAbs when they first become available. This contrasts with 25% docs in France and 33% docs in Germany for example11.
Industry News & Transactions
[2/20/13] FierceBiotech “Star-crossed Merck reorganizes troubled biosimilars effort around Samsung pact” Just two months after Merck dropped out of a snake-bit biosimilar development program for Enbrel, the pharma giant – which has experienced a number of setbacks in the field – has stepped back up with a new, high-profile partnership, teaming up with a new venture formed by the South Korean conglomerate Samsung and Biogen Idec.
[2/20/13] Forbes “There’s Nothing Contradictory About Amgen’s Biosimilars Move” Making biologics is hard; Amgen is very good at it. That’s a reason to argue for making it very tough to get a biosimilar approved. It’s also an argument that if you’re really good at making biosimilars, it’s a good market to be in, because lack of competition will mean prices don’t drop as much and there will be fewer players to split the pie. Amgen would like there to be as few biosimilar manufacturers as possible. It also would like to be one of them.
[2/14/13] Pharma Times “Biocon buys Actavis out of biosimilar JV, teams up with Mylan” Mylan has stepped in to replace Actavis and partner with India’s Biocon on a set of three biosimilar versions for a trio of insulin blockbusters that currently garner $11.5 billion in annual sales.
[1/31/13] FierceBiotech “Genentech flashes PhIII progress for prized Rituxan successor” In a way, Genentech is competing against itself and holding all the good cards in the development of GA101. Rituxan, the multibillion-dollar drug from Genentech and Biogen Idec ($BIIB), is the standard of care for CLL cases that express CD20. However, the blockbuster loses patent exclusivity in Europe in late 2013, and those developing biosimilar versions of the drug aim to grab market share from Biogen and Roche/Genentech.
[12/16/12] Press Release “Catalent and UMN Pharma announce collaboration for Biosimilar Development and Production in Japan” Catalent announced that it has signed a deal to provide biosimilar cell lines to Japan’s UMN Pharma, a development and manufacturing agreement designed to jump-start the CMO’s presence on the Asian market. Neither company disclosed the terms of the agreement, but the deal tasks Catalent with using its GPEx technology to produce high-yielding cell lines, and UMN, in turn, will recruit pharma outfits that want to partner on biosimilar development in Asia.
[10/31/12] Press Release “Novartis to start construction of new biotechnology facility in Singapore with an investment of over USD 500 million” Novartis announced the construction of a new state-of-the-art biotechnology production site in Singapore with an investment valued at over USD 500 million. The new facility will focus on drug substance manufacturing based on cell culture technology.
[10/19/12] Reuters “Actavis CEO: originators to have edge in “biosimilars”” “Biosimilars will have to be advertised and explained. That would be something relatively new to the generics industry,” Actavis CEO Albrecht told Reuters. “We will have to learn again to generate prescriptions.”
[10/17/12] The Korean Times “Samsung halts clinical tests for biosimilar” The South Korea-based conglomerate has halted development of a biosimilar version of the blockbuster biologic Rituxan/MabThera, with the path to develop the knockoff version of the protein drug appearing thornier than some people thought, The Korea Times reported. An unnamed company source told the Korean newspaper that recent regulatory guidelines from U.S. regulators could be partly to blame for the delay.
[10/4/12] FierceBiotech “Biosimilars team at Teva/Lonza slams the brakes on Rituxan knockoff” Three years after Teva and Switzerland’s Lonza joined forces to create a new joint venture to develop a few blockbuster biosimilars, Teva announced that it has suspended its Phase III study of a biosimilar of Roche’s Rituxan. Both companies through unnamed sources indicated the decisions were made due to an uncertain regulatory environment.
1: Transparency Market Research – “Biologics Market – G7 Industry Size, Market Share, Trends, Analysis, And Forecasts 2012 – 2018”
3: Biosimilars – “Scientific factors for assessing biosimilarity
5: Pharmaceutical Compliance Monitor – “Biosimilars vs. Generics – Major Differences in the Regulatory Model”
6: FDA News Release – “FDA issues draft guidance on biosimilar product development”
7: Pharmalot “One Down, 13 To Go: A Biosimilar Bill Falls Flat”
8: Pharmaceuticals – “Biosimilars: Company Strategies to Capture Value from the Biologics Market”
9: PharmaExecBlog – “Biologics: The Next Patent Cliff”
10: The New York Times – “Biotech Firms, Billions at Risk, Lobby States to Limit Generics”
11: BioTrends Research Group – “Biosimilar Versions of Monoclonal Antibodies for Cancer are Forecast to Garner Sales of $4.9 Billion…”