Biosimilars: the great balancing act
pharmafile | April 6, 2010 | Feature | Research and Development | biogenerics, biosimilars
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 way to treat these conditions is increasingly through novel biologic drugs – but these don’t come cheap.
Treatment for breast cancer using Avastin – a blockbuster modern biologic therapy – costs around $92,000 per year in the US.
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.
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 re-testing 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 approved.
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 exactly.
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 US, 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.
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 for biosimilars
The testing issue just discussed is the first of two debates which have raged in the US 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 US (such as Representative Henry Waxman, who has put forward a bill in this area) are suggesting an exclusivity of five years after approval, President Obama supported 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. For one thing, patent laws differ between Europe and the US. 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.
After a year of often heated debate, President Obama has just signed into law health reforms which include a provision of 12 years market exclusivity – a decision which undoubtedly represents a victory for the industry.
Biosimilars: 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.
FDA ADDRESSES BIOSIMILAR QUESTIONS
Biosimilars in the US and Europe: Biosimilars (also known as biogenerics) remain a hot topic in the US, with debate continuing about how best to legislate for their introduction, and how they should be regulated by the FDA.
The US is lagging behind Europe, which has created a regulatory pathway for biosimilar approvals, and where the first such product, Hospira’s Retacrit was approved and launched in Germany in early 2008.
Pharma and biotech companies in the US have long ago conceded that there needs to be a regulatory pathway to allow biogenerics to reach the market, but argument has instead centred on how much time guaranteed market exclusivity time biotech drugs should be given in the US, ranging from seven to 12 or 14 years (see main article).
In the meantime, the FDA is pressing ahead to address some of the difficult scientific and technical aspects of biosimilars.
Speaking in February to a meeting of the Generic Pharmaceutical Association, the FDA’s head Dr Margaret Hamburg addressed the issue.
“As you know, there are a lot of concerns. How will we regulate these? Which framework will we use? These are important questions because patients want and need more access to these products – and, of course, I know how much promise they hold for your industry. Understandably, you’re eager for answers.”
Hamburg said that a robust biosimilar approval pathway needed to be built, which would go beyond “what any short-term political patch can provide.”
She added: “After all, biosimilars raise questions for regulators that are far more complex than those posed by traditional generics.
“For particular products, will we need clinical studies beyond bioequivalence? Is interchangeability possible? How will the approval process differ from the Biologic License Applications process?”
She concluded: “I can say now that there will not be a ‘one-size-fits-all’ approach. There will, rather, be a science-driven, case-by-case decision-making process rooted in the regulatory studies that I would encourage your industry to support – as the FDA will – at this crucial time. The FDA can advance some of the science, but we can’t do it all.”
Europe: The situation in Europe is significantly more advanced, with the first pioneering biosimilars starting to have an impact on the market. Having launched Europe’s first ever biosimlar Retacrit in 2008 for treatment of renal anaemia, Hospira is now enjoying success with the drug, and is looking to expand its presence in the field. Retacrit is currently available in 16 European countries and has captured more than 40% of the short-acting biogeneric EPO market in the region.
Hospira has received approval of a new injectable formulation of Retacrit to add to its existing intravenous (IV) formulation. Hospira is the world leader in terms of generic injectable pharmaceuticals, and have one of the largest pipelines in the industry with a US branded value of $34 billion.
The new formulation was endorsed on the basis of a phase III trial results demonstrating its comparable efficacy to the reference drug epoetin alfa, and final approval by the European Commission (EC) is expected in the next few months.
It has been estimated that biosimilar competition resulting in a 20% price reduction in five off-patent biopharmaceuticals could save the EU over €1.6 billion a year. The EPO market is worth an estimated $2.7billion, of which $1.5billion is related to short-acting treatment. Although only recently launched in several countries biosimilars have captured a 6% share.
Market adoption in the US is clearly key for Hospira’s future dynamics, and accumulating the safety and efficacy databases from its European experience will be indispensable for capturing generic market share from competitors.
Colin Walsh and Shankar Balakrishnan are consultants at CapGemini and can be contacted by visiting www.capgemini.com/consulting
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