Biosimilars… can the truth set you free?

Dr Duncan Emerton and Martyn G. Smith

Datamonitor and LEO Pharma

The truth, it is said, is hard to take. No more so than in the pharmaceutical industry, it seems. The emergence of a new market dynamic, that of biosimilars, has caused very large ripples in the biopharma pond, and has recently been called the most “disruptive technology” of the decade1.

This is true to a point, but what one company sees as a disruptive challenge to the status quo, another company may see as a significant, unmissable opportunity. This “double-edged sword” paradox is what makes biosimilars so fascinating, and so prone to myths, speculation, and half-truths.

Overview of biosimilars

Biosimilars emerged in a formal sense back in 2004 when the EC included “similar biological medicinal products” as part of the Directive 2004/27/EC of the European Parliament and of the Council of 31 March 20042. Since then, several other regulatory bodies, including the Japanese, Australians, Canadians and, most recently, the US, have published guidelines on the non-clinical and clinical development requirements for biosimilars.

Biosimilars are broadly defined as biological products that are “similar to, but not the same as” a reference biological product which is approved in a particular country or region, the approval of which relies on, in part, data or information in an application for the reference biological product. Without going into too much detail, biosimilars can never be said to be exactly the same as the reference product, as can be said for small molecule, chemically synthesized generics. This is primarily due to the way in which biologics and biosimilars are manufactured (i.e. by living cells or derived from animal tissues), where small differences in manufacturing conditions and processing can create small differences in the finished product (e.g. different glycosylation patterns).

"Despite the obvious challenges developing biosimilar products, multiple approvals have been seen in the EU, US, Canada and Australia."

These critical differences between biosimilars and generics have prompted many to say that biosimilar developers can never properly copy a reference biological product, thus ensuring sufficient safety and efficacy of the final biosimilar product. Other issues that have been raised in relation to biosimilars include poor quality, low capacity, and an inability to compete on price, to name but a few.

Despite the obvious challenges developing biosimilar products, multiple approvals have been seen in the EU, US, Canada and Australia. Since 2006 there have been multiple biosimilars approved in these regions, ranging from simple proteins (e.g. somatropin) through to complex, proteins both non-glycosylated (e.g. filgrastim) and glycosylated (e.g. EPO). Most recently, Australia’s TGA approved Hospira’s biosimilar filgrastim, Nivestim, with an expected launch in H1 20113.

The myths (and truths) about biosimilars

Despite much progress being made in the field, and multiple biosimilar products being approved, there are still many myths and half-truths being passed around. This mirrors a very similar situation which occurred back in 1984 when the US enacted the Hatch-Waxman legislation, thereby giving birth to the US generics industry4. What was being said back then in relation to small molecule generics, in terms of product safety, efficacy, quality, technology, etc., is being repeated now about biosimilars.

“Biosimilars aren’t as safe/effective as branded products”, “biosimilar companies aren’t able to compete with us on price”, “biologics are too complex to copy”, and “they don’t have sufficient capacity to make enough” are just some of the comments being made by physicians, branded biopharma companies and healthcare lobbyists, to name but a few. So what is the truth, and do any of these comments hold any water?

“Biosimilars aren’t as safe as branded products”

Biosimilars, as approved by the EMA (Europe), PMDA (Japan), and other regulatory agencies which have a biosimilar pathway (e.g. Canada) are as safe and as effective as the branded products they copy. By following rigorous non-clinical and clinical development guidelines, biosimilar medicines have been shown to be safe in the population that they have been studied in. Back in 2008, when the safety of biosimilars was called into question at a scientific conference, the European Commission gave warning to both branded biopharma and biosimilar companies about calling into question the integrity of the European biosimilar pathway. Where other concerns come, and with some justification, is when indications for a specific product are given to biosimilar products without clinical studies being done (i.e. by extrapolation). For example, Amgen conducted multiple studies for Neupogen (filgrastim), over several years and ~10,000 patients, and received seven indications. Sandoz completed one clinical trial with its biosimilar version of Neupogen, Zarzio, in one indication, that of chemotherapy induced neutropenia, and due to the results of that study, received the other six indications by extrapolation from the EMA. This lack of clinical data has caused some concern to be raised regarding the safety and efficacy of biosimilars in extrapolated indications.

"…biosimilar medicines have been shown to be safe in the population that they have been studied in."

“Biosimilar companies aren’t able to undercut branded biopharma companies on price”

When biosimilar EPO launched in Germany in September 2007, Binocrit (EPO-alfa, Sandoz) was 20% cheaper than the reference product (Amgen’s Epogen). This caused Amgen and other players in the EPO market (first and second generation EPOs) to bring prices down to match. Sandoz then reduced its price for Binocrit by a further 20%, or a 40% discount to the original branded EPO-alfa price. Similar price discounts have been seen in the filgrastim and somatropin market, showing that biosimilar companies are lean enough and have sufficiently low enough COGS to be able to provide hefty discounts compared to branded biopharma companies.

“Biosimilar companies don’t have enough capacity to make enough product”

Setting up biologics manufacturing capabilities is an expensive undertaking, costing in the region of $150-200m depending on which biologics are to be manufactured. That said, for many of the key players in the biosimilars space, biologic manufacturing capacity already exists, and is already approved by the relevant regulatory authorities (e.g. FDA, EMA, WHO). For example, Indian biosimilars player, Biocon, has expertise and capabilities to manufacture simple (i.e. insulin) and complex (i.e. mAbs) therapeutic proteins. Additional capacity has just been acquired, with the acquisition of the bulk pharmaceutical manufacturing facility of IDL Speciality Chemicals Ltd. in Hyderabad in September 20095 It has been estimated that based on the level of investment Biocon has made in insulin manufacturing, the company are able to manufacturing around 10-12% of world’s insulin needs.

“Biologics are too complex to copy”

Biosimilar versions of highly complex, targeted therapies (e.g. mAbs) are being developed by several biosimilar companies. Companies such as Teva are leveraging internal technology platforms, high quality manufacturing processes and medical/clinical expertise to conduct clinical trials for these complex products. Teva’s announcement that it is developing biosimilar rituximab (Rituxan/MabThera, Roche), called TL011, proves that complexity is no barrier to competition within the biosimilars space6. In actual fact, it is a significant driver of interest as those that are able to compete in the highly complex biosimilars space will find little in the way of competition. Indeed, of the 14 biosimilar products currently on the EU market the majority of these are the more complex glycosylated proteins (i.e. EPO, G-CSF).

"…those that are able to compete in the highly complex biosimilars space will find little in the way of competition."

The take-home message from all of this is that the myths about biosimilars which are circulating around the biopharma industry are just that, myths. Biosimilar products have been shown to be safe and effective, they can be competitively priced vs. branded products, there is more than enough capacity to manufacture sufficient, high quality product (particularly in emerging markets), and the technology platforms and necessary skills exist within a number of companies to enable them to target highly complex biologics.

The next few years in the biosimilars space are set to be ones of significant change. The last few years have only been the tip of the iceberg. By coming to terms with biosimilars, and accepting the truth about biosimilars, both branded pharma and biosimilar companies will be able to meet the challenges and realize the opportunities in equal regard.

References:

1. Biosimilars: This Decade's Most Disruptive Technology. William Looney, 22 September 2010. Available from http://blog.pharmexec.com/2010/09/22/biosimilars-this-decades-most-disruptive-technology. [Accessed September 2010].

2. Guideline on Similar Biological Medicinal Products. October 2005. Available from http://www.ema.europa.eu/docs/en_GB/document_library/Scientific_guideline/2009/09/WC500003517.pdf. [Accessed September 2010].

3. Hospira Receives TGA Approval for Nivestim, Australia's First Biosimilar Filgrastim. September 2010. Available from http://www.prnewswire.com/news-releases/hospira-receives-tga-approval-for-nivestim-australias-first-biosimilar-filgrastim-103825243.html. [Accessed September 2010].

4. The Hatch-Waxman Act and New Legislation to Close Its Loopholes. Available from http://www.cptech.org/ip/health/generic/hw.html [accessed September 2010]

5. Biocon to buy pharma biz of IDL Specialty. September 2009. Available from . [Accessed September 2010].

6. Teva biosimilar takes wider aim at Roche's Rituxan. September 2010. Available from http://www.reuters.com/article/idUSLDE68L0LS20100922. [Accessed September 2010].

About the author:

For further information on these issues, and to receive information on how Datamonitor Consulting is helping clients navigate the challenges, opportunities and uncertainties within the biosimilars space, please contact Dr Duncan Emerton (Principal Consultant, Datamonitor Healthcare Consulting, T: +44 (0)20 7551 9156, E: demerton@datamonitor.com).

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