Biosimilars: A bold new frontier

While much of the current news in the pharma industry is less than upbeat—the “patent cliff,” reduced research and development productivity, company restructuring, etc.—there are a few exciting and fast-growing sectors of the industry. One of these is the biosimilars field.

As someone who orchestrated the first commercial launches of human recombinant erythropoietin, starting in 1989 in Switzerland, I can tell you that the prevailing wisdom at that time was that any generic alternative to a biological drug would require a complete clinical development program in order to come to market (as would be required for any new drug).

And as any developer of a follow-on product in a class of drugs can tell you, the regulatory bar keeps getting higher with each new entry to the class. As a result, until recently the belief has been that biological products represent an unusually attractive segment of the market due to, among other reasons, the long period of limited or no competition in meeting a clinical need.

How things have changed.

As healthcare budgets have become increasingly challenging to manage in many developed markets, drug expenditures (though still a relatively small component of healthcare expenditures overall) have come under intense scrutiny; and in developing markets, healthcare authorities have struggled with providing their patients access to the benefits of costly biological drugs.

One of the healthcare initiatives spawned by this situation was an attempt to find more efficient ways of bringing competitive biological products to market, thereby fuelling competitive pricing. And the potential market is very tempting: By 2016, 40% of current global biologic product sales will no longer be covered by patents, a market segment projected to be worth $63 billion.

Developing a biosimilar product is a very different proposition than developing a generic to a small molecule drug. Because biologics are produced in biological systems, there is inherent variability of the molecules produced, based on the cell lines used and how they are treated during the manufacturing process.

These differences cannot be easily detected or assessed using chemical analyses, as they can with small molecules, and some differences can result in considerably different potency and side-effect profiles. And you can be sure that the current producers of biologics are not going to provide their competitors with access to their cell lines and manufacturing know-how. This implies that expertise in molecular synthesis and manufacturing will be critical success factors for biologics companies, more than ever before, and even more so as the ability to manufacture at a lower cost becomes an important competitive differentiator.

That’s a key reason why we’re seeing some unusual partnerships developing in the biosimilars field:

• Biogen Idec partnering with Samsung, where Samsung is an expert in high-volume, low-cost manufacturing
• Merck partnering with FujiFilm, where FujiFilm has interesting expertise in certain relevant manufacturing technology
• Merck Serono’s partnership with Dr. Reddy’s Laboratories Ltd. (India), where Dr. Reddy’s has a strong generics business (including some early biosimilars). Dr. Reddy’s also has excellent commercial capabilities in a number of developing markets where biosimilars can be launched earlier than in the major developed markets, such as the United States, the European Union and Japan, all of which are still in the process of elucidating the details of pathways to regulatory approval.

With a large potential market, a requirement for new competitive skill sets that encourages novel partnerships, and an evolving regulatory environment, biosimilars is an exciting area in which to compete today.