Biosimilars
Colin Walsh and Shankar Balakrishnan
Capgemini
The generics of the biologics world offer potentially sizeable cost benefits to payers – but first some conflicts must be resolved.
Faced with recessionary pressures, ageing populations, and increasingly expensive therapies, governments are redoubling their efforts to contain healthcare costs. Biologics present special challenges to these initiatives. Chronic conditions such as diabetes and catastrophic ones such as cancer represent the fastest growing areas of healthcare spend. The most effective ways to treat these conditions is increasingly through novel biologic drugs, and these don’t come cheap. Treatment for breast cancer using Avastin – a blockbuster modern biologic therapy – costs around $92,000 per year in the U.S1.
Biosimilars could potentially play an important role in the treatment of these conditions. By reducing the cost of cutting-edge treatment, biosimilars may present an opportunity to tackle the twin, and often opposing, challenges of improving the quality of, and access to, healthcare while delivering substantial savings.
"Biosimilars may present an opportunity to tackle the twin, and often opposing, challenges of improving the quality of, and access to, healthcare while delivering substantial savings."
However, there are two important issues that need to be addressed with respect to biosimilars, and the way they are resolved will shape the competitive landscape for drug manufacturers for years to come. The first concerns testing and the second the period of exclusivity.
How much retesting is necessary for approval of biosimilars?
The first of the two issues under debate, testing, relates to a critical difference between generics and biosimilars. A generic is bioequivalent to – and hence clinically interchangeable with – the corresponding innovator product. A biosimilar, on the other hand, is “similar” to the innovator product in terms of composition, but is not necessarily clinically interchangeable with it (hence the term “biosimilar”).
This difference has far-reaching implications for testing and validation. The manufacturer of a generic drug is allowed to use the test data on the basis of which the original product was approved2. Provided laboratory analysis confirms that the two drugs are identical, the generic’s safety and efficacy can be assumed based on the data for the original drug.
On the other hand, because biologic drugs are produced from living cells and the innovator’s manufacturing processes are not specified in the patent, it is almost impossible to replicate a biologic drug exactly3. Consequently, demonstrating therapeutic equivalence for biosimilars is not a straightforward matter. In contrast with generics, therefore, laboratory analysis of a biosimilar product is insufficient to ensure its safety and efficacy.
This difference has regulatory, scientific and commercial implications. The ability to reduce the need for clinical trials by referring to the original product’s data is fundamental to the strategy of low-cost generic players. If biosimilar products have to undergo more extensive clinical trials, it will greatly diminish their cost advantage over the innovator products.
At the extreme, a biosimilar that does not make reference to the originator’s data package in some form, but instead requires a full package of non-clinical and clinical trials, is not truly a biosimilar but a competing branded product, analogous to a “me-too” drug rather than a generic. If you could not refer to the originator’s data package, the development costs would be similar to any other original product and there would be a limited commercial opportunity, unless the biologic had some clinically relevant differentiation.
Outside the U.S., possible ways forward on approval of biosimilars are emerging. The EU has taken a lead in this area by publishing overarching guidelines, it has already approved biosimilars in six product classes through an abbreviated pathway. It has adopted a case-by-case approach to determine what clinical and non-clinical data is needed to establish comparable effectiveness, quality, safety and efficacy to the reference product.
"Outside the U.S., possible ways forward on approval of biosimilars are emerging."
This case-by-case approach is probably the most viable in such a complex field, however the biologics involved so far have been at the lower end of complexity, so the challenges in moving to more complex monoclonal antibodies and large proteins have yet to be dealt with.
Period of exclusivity
The testing issue just discussed is the first of two debates currently raging in the U.S. around biosimilars. A second, closely related, debate concerns the period of exclusivity that should be granted to the originator product (effectively, the question of how long it should be before the biosimilar manufacturer can refer to the data submitted by the innovator product company).
The period of exclusivity is critical for the industry as this is when it is able to recoup its development costs. After this period competition is likely to increase and prices to fall, so revenues are much less certain. Clearly, from the innovators’ point of view, there is little motivation to innovate unless regulators require significant non-clinical and clinical studies for registration of a biosimilar, or there is a substantial period of exclusivity unrelated to the patent. But from the point of view of payers and biosimilar manufacturers it is desirable that the biosimilar becomes available as soon as possible.
Proponents of biosimilars in the U.S. (such as Representative Henry Waxman, who has put forward a bill in this area4) are suggesting an exclusivity of five years after approval, President Obama is supporting seven years, and the pharmaceutical industry is lobbying for 12 to 14 years. Given the complexity of patenting biologicals and the typical time to delivery, any of these measures would extend the period of exclusivity beyond that given by the patent.
The interaction of the specific period of exclusivity for biologics and the patent is a complex matter, and one to which we plan to return in a future edition of Perspectives. For one thing, patent laws differ between Europe and the U.S. For another, there are still questions about what exactly will be covered by a defined period of exclusivity: with biologics you cannot clearly define the substance in the way that you would for a conventional molecule, and so a broader definition in terms of function or structure may need to be used, extending the scope of exclusivity beyond that intended.
Conclusion: a balancing act for legislators
To summarise the two points of view on biosimilars, governments and patients want to see a vibrant biosimilar sector driving down the cost of expensive biologic agents, a relatively short period of exclusivity would accelerate this process, as would the ability to reuse some of the trial data. For innovators, however, longer periods of exclusivity are required to allow them to recoup their research and development costs. If the period of exclusivity is very short, the commercial viability of biological molecules might be lost, halting this exciting area of research.
The biosimilar-related decisions to be taken by various legislative bodies in coming months will determine a big part of the industry’s future for at least the next couple of decades. Since governments are strongly motivated to control the cost of medication, they are likely to promote the growth of biosimilars. As far as patients are concerned, we believe that a proportion of the patient population will consider that the risk attaching to biosimilars is acceptable at the outset. However, what will drive the long-term success or failure of biosimilars is experience. Results have been encouraging in the case of the simple biosimilars available today, but it cannot be assumed that more complex ones will be equally successful and trouble-free.
For developers of both original biologics and biosimilars, communication with regulators is going to be vital. In particular, in the absence of universal guidelines, biosimilar developers need to talk to regulators as early as possible in the development cycle to find out what their stance on approval of a given product is likely to be. Without this knowledge, the risk attached to development of biosimilars is unacceptable, since unexpectedly onerous approval procedures could destroy the business case for the drug.
References:
1. “F.D.A. Extends Avastin’s Use to Breast Cancer”, New York Times, 23 February 2008
2. Eshoo, A.G. “Pathway for Biosimilars Act - Protecting Patients and Innovation”, George Washington University, 23 September 2008
3. Eshoo, op. cit.
4. The Access to Life-Saving Medicine Act HR 1038
5. “European Biosimilars’ Market Performance Mirrors US Legislative Progress: Slow but Steady”, The RPM Report
6. Grabowski, H. et al. “The Effect on Federal Spending of Legislation Creating a Regulatory Framework for Follow-on Biologics: Key Issues and Assumptions”, White Paper, August 2007
About Capgemini:
Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services, enables its clients to transform and perform through technologies. Capgemini provides its clients with insights and capabilities that boost their freedom to achieve superior results through a unique way of working, the Collaborative Business ExperienceTM. The Group relies on its global delivery model called Rightshore®, which aims to get the right balance of the best talent from multiple locations, working as one team to create and deliver the optimum solution for clients. Present in more than 30 countries, Capgemini reported 2008 global revenues of EUR 8.7 billion and employs 90,000 people worldwide.
Capgemini Consulting is the strategy and transformation consulting division of the Capgemini Group, with a team of over 4,000 consultants worldwide. Leveraging its deep sector and business expertise, Capgemini Consulting advises and supports organizations in transforming their business, from strategy through to execution. Working side by side with its clients, Capgemini Consulting crafts innovative strategies and transformation road maps to deliver sustainable performance improvement.
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What is the appropriate use for biosimilars?
