Access to US biosimilars market set to get tougher

The race to enter the lucrative $60 billion US biologics market is getting tougher by the day for domestic biopharma companies.

The US is considering a measure that would prevent the US Food and Drug Administration (FDA) from approving a biosimilar (off-patent version of a biopharmaceutical drug) until 12 years have passed since the innovator biologic was first approved.

This means, generic biologic manufacturers would have to wait for a dozen years before they can rely on the clinical trials data of the innovator company to secure FDA approval for their products.

The US biotech sector believes the patent system itself may not be sufficient to provide innovator companies with protection against premature entry of biosimilars or follow on biologics, and there must be some certainty in the form of data exclusivity, which can protect innovator companies’ investment for an adequate period of time.

“Exclusivity is key for providing incentives for doing research,” said James C Greenwood, president, BIO (Biotechnology Industry Organisation). BIO, which has 1200 members including biotech majors like Amgen, Biogen, Genmab, Genetech, Geron Corporation, had been pressing for data exclusivity for 14 years, while the Obama administration was calling for exclusivity for seven years, and politicians like Henry Waxman have pressed for data exclusivity for no more than five years. 12 years is what is under consideration at present.

According to industry experts in India, exclusivity would delay entry of biosimilars into the US market as the wait to launch off-patent versions could go beyond the period of patent expiry. This is because, if a patent term for an innovator product starts from the date of filing an application, data exclusivity would start from the date of approval of the product (up to 12 years as is being considered).

The potential for biosimilars is said to be huge, with about $25 billion worth of biologics slated to lose patent protection by 2016.

Biologics are highly expensive drugs and on an average cost 20 times more than chemical drugs, with some treatments costing as much as $200,000 a year. Biosimilars (unlike generics, which are 40-80% cheaper than innovators) cost about 25% less than innovator biologics.

Patents on Amgen’s Enbrel (used for treatment of arthritis and psoriasis, $5.7 bn sales in 2008), Neupogen (for neutropenia, which is a side effect of chemotherapy, global sales about $4.28 billion), and Epogen (for anaemia, global sales of about $2.49 billion) are due to expire between 2012 and 2015.

Likewise, patents on Genetech’s Avastin (for colorectal cancer, $3.8 billion sales in 2008) and Herceptin (for breast cancer, $4.7 billion in 2008) are due to expire between 2017 and 2019.

With the strong push for data exclusivity in the US, domestic biopharma companies are deviating attention towards markets in developing countries, including India.

According to Kiran Mazumdar Shaw, chairman and managing director of Bangalore-based biotechnology company Biocon, non-US markets like those in the Middle East, Latin America, India should be looked at for selling biosimilars. “The non US/EU markets will be good growth areas for biosimilars.”

The non-US/EU markets for biosimilars is estimated to be about $1 billion, growing at a healthy rate of 30% per year. 

According to Villoo Morawala Patell, CMD, Avesthagen, a Bangalore-based biotech company, although the US is a big market which cannot be ignored, a strategic plan is needed before entering that market. “Meanwhile we have other economies like the BRIC (Brazil/ Russia/ India/ China) nations that will provide good prospects.”

According to Mani Iyer, executive director, Intas Biopharmaceuticals, a Ahmedabad-based biotech company, the share of the Indian market will increase substantially to about 40% of the total revenues biotech companies in the country earn. “There is no way India can be ignored for a bisimilars play. The biopharmaceutical segment accounted for the largest share of the biotech industry’s revenues, touching Rs 7,883 crore in 2008-09.”