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In light of the impressive size and predicted growth of the market, there has been a rising interest in the development of biosimilars.
The full version of this biosimilars feature can be read in the August issue of our digital magazine: http://www.pharmtech.com/ptedigital0810
Biologics account for 10 to 15% of total global drug expenditure and approximately one-third of the global pharma development pipeline. In light of the impressive size and predicted growth of this market, there has been a rising interest in the development of biosimilars. We believe that all stakeholders are increasingly realising that marketed biosimilars offer comparable quality, safety and efficacy to their reference products. Indeed, this is the basis on which they were approved by the centralised European procedure. To quote Nicolas Rossignol, the (former) EC pharma division administrator: "We are confident that if a product meets all the requirements and gets a marketing authorisation from the Commission, it means that the product is as safe and effective as any other product authorised by the Commission."
This is a new industry, so there may still be a tendency in some cases to be cautious. This will only improve with time; firstly, the importance of biopharmaceuticals will continue to increase, with growing and ageing populations increasingly prone to difficult-to-treat diseases ranging from cancer to autoimmune disorders. Secondly, while demand will drive overall costs steadily higher, medicines with an estimated market value of +$60 billion are set to lose patent protection through 2015, paving the way for the biosimilars market to really take off.
In the meantime, we are seeing the understanding of the "biosimilar concept" steadily increasing among key stakeholders, as well growing awareness that high-quality, clinically proven biosimilars really can play a significant role in helping to ensure access to essential biopharmaceuticals at times of increasing cost pressures. This parallel trend — towards more rigorous cost-benefit analysis and a broader definition of therapeutic alternatives — is reflected in two recent landmark decisions by the UK's National Institutes of Clincal Excellence (NICE):
The decision to recommend the use of Omnitrope biosimilar on the same basis as six other human growth hormone products — the first such decision involving a biosimilar.
The decision not to recommend the use of Herceptin for the treatment of gastric cancer, on cost-benefit grounds.
In parallel, we see that anti-biosimilar campaigns by certain interested parties are beginning to "lose their bite". There is also growing understanding of the fact that biopharmaceutical originator companies also effectively create changes in their products similar to "biosimilars" when they modify their original manufacturing processes.
Biosimilars are biopharmaceuticals approved by the centralised European biosimilar regulatory pathway. This explicitly recognises that existing biosimilars can and should have the same INN (International Non-Proprietary Name) as their reference product. Reference products that change through major manufacturing or process modifications also have the same INN. Based on the science, the same principle should also apply to future biosimilar products including monoclonal antibodies, as well as, manufacturing changes to originator products. Provided that the mechanism of action is equivalent for all indications, biosimilars should also be approved in the same indications as the reference product.
With reference to post-approval safety studies, these are an integral requirement of marketing authorisations for all biopharmaceutical products. Biosimilars are, and should be, treated in this respect on exactly the same basis as their reference products. The same principle applies to additional regulatory approvals. The biosimilar applicant should work with the regulatory authorities on a case-by-case basis to define the nature and extent of clinical data requirements.
Biosimiliars are substantially more resource-intensive than standard small molecule generics because there is a need for sophisticated manufacturing facilities. Development costs, which include clinical trials, typically equate to around $100 to 150 million per product and the payback period for the industry can be up to 10 years, depending on company set-up, synergies, etc.
Cost is clearly a driving factor, but biosimilars also offer considerable opportunity to improve on existing products in important ways; such as the upgrading of old processes to meet 21st century demands, or improved devices and formulations.
In comparison to standard generics, biosimilars are very different and the business model of this new industry entails comparatively less leeway for substantial price cuts because of the high barriers to entry, particularly on the financial side (high costs, long timelines, late payback). Our biosimilars are currently priced at about 30% below their reference products. The important thing to remember here is overall costs, however, and not percentages — the total savings to healthcare systems at this level of reduction are substantial (one study in Germany, by the IGES Institute, projects potential savings in Germany alone of €8 billion plus through 2020).1
The complexity of biopharmaceuticals, combined with rapidly growing demand for these essential medicines, is driving costs steadily up and putting increasing pressure on healthcare budgets. However, this is not just about cost — many patients who need these medicines most already are, or risk being, denied access on cost-effectiveness grounds. By introducing competition in a field where it was previously lacking, biosimilars are leading the way in increasing access to essential biopharmaceuticals at affordable prices as well as ensuring a robust commercial infrastructure that will support healthcare professionals on the front line.
As part of the Novartis Group, we believe that competition and innovation are complementary and mutually reinforcing. Biopharmaceuticals have revolutionised modern medicine and will continue to do so, with many innovative new medicines still to come. Biosimilars manufacturers will play a vital role in driving the next "biologics revolution" by dramatically broadening patient access to affordable, high-quality medicines through innovative approaches to development, manufacturing and commercialisation of biosimilars.
With regards to the approval process, the next big milestone in Europe will be the completion of guidelines for the approval of biosimilar versions of monoclonal antibodies. At Sandoz, we are already in close discussions with the regulators about the necessary next steps.
1. The competitive role of biosimilars in the German SHI market for pharmaceuticals (IGES Institute GmbH, data on file at Sandoz, January 2009).