India to be battleground for off-patent biotech drugs

Although the growth opportunity for off-patent versions of biotech medicines is huge in the developed world, regulatory hurdles there mean India and rest of the developing world could be where the opportunity lies for biopharmaceutical companies.

The market for biologics is worth $60 billion in the US, $30 billion in the EU, and about $5 billion in the rest of the world.
The patents for several biologics are to expire in the next couple of years.

Patents on Amgen’s Enbrel (used for treatment of arthritis and psoriasis, $5.7 billion 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 slated 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) will expire between 2017 and 2019.

However, compared to generic medicines (off-patent versions of chemical drugs), regulatory clearances for the copies of biological drugs (called biosimilars) are tough to get in developed countries and the manufacturing processes are complex.

The associate director of a professional services company said the supply chain for biosimilars is tough as the products are less stable than generics and require cold chain distribution, which increases the cost and complexity of distribution.

Also, biosimilars (unlike generics, which are 40-80% cheaper than innovators) cost only about 25% less than innovator biologics. “Thus the cost advantage is also not very steep,” said the associate director.

Biotech products are highly expensive medicines and, on an average, cost 20 times more than chemical drugs, with some treatments costing as much as $200,000 a year.

To make matters worse, the US is debating a measure (data exclusivity) that would prevent the country’s drug regulator from approving a biosimilar until a certain period of time (usually some years) has passed since the innovator biologic was first approved.

These factors increase the attractiveness of India as a destination for biosimilars. And, local pharma companies are gearing up to tap the opportunity. Kamal K Sharma, managing director of Mumbai based drugmaker Lupin, said data exclusivity in the US market will be a challenge. “By 2013, Lupin should be in a good biosimilar state. Sometime in 2011, our biosimilar products should be out in India. First phase of biosimilars has to focus on the Indian market.”

Y K Hamied, chairman and managing director, Cipla, said the company’s first biosimilar should be out by late 2011, and India would be a key market. “It is estimated that by 2015-2020, about 30% of all novel drugs would be biologics. This would give a boost to biosimilars.”

In an earlier interview, Kiran Mazundar Shaw, CMD of Bangalore-based biotech company Biocon, had said the non US/EU markets like India, Latin America will be good growth areas for biosimilars.

Data by Association of Biotech Led Enterprises (ABLE) shows the domestic biotech industry grew by 18% in 2008-09, earning revenues of $2.67 billion, of which biopharma accounted for 65%.