In APAC, the biosimilar market is set to grow

Syamala Ariyanchira

This morning’s article is about the biosimilars market, comparing the low levels of regulation in the emerging markets, such as China, India and Korea, to the high levels of regulation in place in the developed markets. Syamala Ariyanchira explores the effects regulation has on the pharmaceutical and healthcare industries.

The market sentiments towards biosimilars vary widely between the regulated and the semi- and unregulated markets. While regulated markets adopt an extremely cautious approach, the ‘pharmerging’ markets embrace the opportunity. Though ‘biobetters’ are often projected to have better future prospects over biosimilars, at least in the emerging markets the inclination is clearly towards biosimilars. The APAC region looks particularly promising – as a manufacturing hub and as a market.

As our scientific abilities to reveal the underlying disease mechanisms and to design recombinant protein drugs based on this knowledge increase, the demand for biologics is increasing proportionately. However, innovator biologic drugs are extremely expensive, which limit their availability and affordability in emerging markets. Biosimilars offer hope in reducing the healthcare costs to a large extent.

The governments in the emerging markets tend to approach biosimilar sector as a healthcare solution rather than a regulatory issue. They are developing regulatory framework in their countries around these products targeting mainly to improve access to these products. Many are promoting local players to invest in biosimilar development by offering various incentives. The absence of a stringent regulatory framework in these countries has also lowered the entry barriers for the local players.

Challenged by the rising disease burden in their countries, governments are looking out for various options to improve access to modern healthcare in their countries. As the living standards of the younger generation in these countries improve, demand for state-of-the-art healthcare is also increasing. However the emerging markets, including most of the APAC countries, are highly price sensitive, as a large proportion of the population pay for their medical expenses out of their pockets.

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“The governments in the emerging markets tend to approach biosimilar sector as a healthcare solution rather than a regulatory issue.”

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Biosimilar products from APAC-based biosimilar companies are yet to enter any of the regulated markets. However, the potential of these companies and their products cannot be underestimated. Some of them enjoy commendable success in several semi-regulated markets. It is reasonable to assume that at least some of them will enter the regulated markets sooner rather than later. When they do, they could be armed with valuable clinical experience as well as post-market data on their products gathered over years in various semi-regulated markets. It is also reasonable to assume that these companies may have an edge over their counterparts in regulated markets in terms of cost effectiveness, making them price competitive – an important success factor considering that almost all governments in regulated markets are trying desperately to contain their healthcare costs. All these factors call for a deeper look at the biosimilar market trends emerging in the APAC region and identify potential winners.

The APAC biosimilar market accounted for around 27% of the global biosimilar market in 20111. It is expected to grow at a CAGR of 10.3% during the next five years. This market estimation excludes vaccines and blood products and takes into consideration only the product classes that fall under the definition of biosimilars by EMA. Hence, it includes low molecular weight heparins even though their status as a biosimilar is often debated. In fact, ‘biosimilar’ may not be an appropriate term to refer the copies of biologic drugs sold by APAC companies, since these products are not subjected to stringent regulatory framework comparable to that of EMA. It has to be noted that EPO biosimilar comparison studies indicate that the products marketed in Europe vary from those developed and marketed by companies in semi-regulated markets2,3. The clinical significances of these differences are not clear, though. The term ‘biosimilar’ is used in this article on a wider scope due to two reasons: this term is now popular and recognized globally, and, another suitable term does not exist.

Leading biosimilar markets in the APAC region include China, India, and Korea. Companies in these countries develop and commercialize biosimilars targeting domestic patients. Government support and technological competence available at lower cost levels and proximity to other emerging markets work in their favour.

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“Most importantly, the acceptance levels of biosimilars by physicians and patients are much higher in these countries compared to the regulated markets.”

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The APAC countries are taking steps to improve their regulatory framework as well. Japan, Australia, Singapore, Malaysia, and South Korea have already established biosimilar guidelines. The emerging biomanufacturing hubs include China, India, and Korea. The returning professionals with valuable experience in regulated markets serve as catalysts and accelerate the growth of scientific, as well as regulatory, understanding in their respective countries. Most importantly, the acceptance levels of biosimilars by physicians and patients are much higher in these countries compared to the regulated markets. Among the three countries, India has already been established as a destination for outsourcing research and manufacturing activities related to biologics, which assists the country favourably in its growth as a biosimilar developer. China and Korea are, however, late entrants into the sector but both are showing tremendous potentials in biosimilar industry. Some of the important aspects of these two upcoming biosimilar markets are analysed below.

Korea

The Korean pharmaceutical industry is moving from small molecule generics to high-value products. Several companies in the country have rich pipeline of complex biosimilar products including several monoclonal antibodies in advanced stages of development. Its dynamic biosimilar market is further driven by the investments from Korean business conglomerates and multi-national companies. The entry of electronics giant Samsung into the field is an indication of the high levels of recognition the sector is receiving.

Korean biosimilar products are being exported to various semi-regulated markets such as China, India, Latin America and Middle East. The biosimilar guidelines implemented in Korea in 20094 allows extrapolation and exemption from Phase II clinical trials. Though no data exclusivity period is indicated for the reference products in the guidelines, the requirement for a reference product to fully establish safety and efficacy data through post-marketing surveillance during the re-examination period of six years is essentially equivalent to a data exclusivity period for all practical purposes.

China

In China, the widening gap between disease burden and availability of advanced medical solutions provides the biosimilar players high growth opportunities. However, the biosimilar companies have to survive in a crowded market that offers low margins. Moreover, the focus is mainly on low-value products such as interferons, growth hormones, and erythropoietin.

The scarcity of specialized biomanufacturing expertise is a major challenge for the industry in China as evident from the technologies commonly used by the industry. For example, adoption of mammalian systems has been slow. The existing biomanufacturing facilities are smaller, which limits the pricing flexibilities. Dependence on low-yield processes is another major challenge.

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“In China, the widening gap between disease burden and availability of advanced medical solutions provides the biosimilar players high growth opportunities.”

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The regulatory system, which is undergoing an overhaul in China, indicates a major shift in the industry. Until recently, GMP certification was not mandatory and many products, including biologic drugs, were approved with little clinical trial data. This is changing fast, with the government adopting various steps to demonstrate their commitment to improve drug safety standards and reduce counterfeiting. Returning scientists trained in regulated markets influence many of these changes promoting improved attention to safety standards and IP protection. Though China joined the World Trade Organization (WTO) in 2001, the enforcement is perceived to be insufficient.

No specific biosimilar approval process exists in the country. The Chinese Revised Provisions for Drug Registrations (“The Provisions”) came into effect in 2007, which require biosimilars to be treated as new drugs. For instance, four phases of clinical trials are required for biologic drugs even if the innovator brand is marketed in China. Adhering to the GMP, GLP, and GCP guidelines has been made mandatory as well. The government is promoting the local industry with numerous incentives. For instance, the drugs that imitate foreign reference products receive many advantages over those that imitate domestic biogeneric drugs. The benefits include fast track approvals, 20 years of patent protection, up to five years of market exclusivity, and six years of data protection for clinical trial data.

References

1. “Biosimilars: Global Markets”- BIO090A, Published by BCC Research, May 2012. http://www.bccresearch.com/report/biosimilars-global-market-bio090a.html

2. Safety and efficacy of biosimilar epoetins, Schellekens, H., Khayat, D., Journal of Clinical Oncology, 2004 ASCO Annual Meeting Proceedings (Post-Meeting Edition), 2004, 22, No 14S, 8224

3. “Global Vision about the Biological Medicinal Products: Biosimilars (April, 2009)”, Zuñiga, L., Calvo, B., Current Pharmaceutical Biotechnology, 2009, 10, 772-774

4. “Guidelines on the evaluation of biosimilar products”, KFDA

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About the author:

Syamala Ariyanchira, PhD., is an independent consultant based in Malaysia. This article is based on the report “Biosimilars: Global Markets” published by BCC Research in May 2012.

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