Unlike generics, biosimilars can thwart India’s copycat kings

So near but yet so far — could well describe the situation molecule-tweaking drugmakers of India find themselves in.

For years, they have been in the front and centre of the generics revolution — which is essentially about selling off-patent versions of expensive medicines invented by multinationals.

While they remain good at the chemistry of molecular tweaking of patented drugs, they seem to have run into a high technology wall when trying to do the same with biologic medicines.

Biosimilars — as off-patent biologics are called — are turning out to be a very closed opportunity for pharma firms that boast of a biotech products portfolio.
Industry estimates that by 2014, biologics worth $60 billion will go off patent in the US and Europe.

That, experts say, is a massive opportunity for local companies such as Cipla, Biocon, Dr Reddy’s Laboratories and Lupin, which are in the process of developing biosimilars.

Some of the medicines have garnered billions of dollars in sales (See table).
But cashing in looks a distant goal because of the multiple hurdles that sprout in the biosimilar pathway, said Adithya Bhat, managing director, Protivity Consulting.

Developing biosimilars is highly expensive, and getting approval in the US and EU is a very tough job, said Bhavin Shah, analyst with Dolat Capital Market.
While a typical generic costs around $5 million or `23-25 crore to develop, biosimilars need 40 times that, or $200 million, because of the extensive clinical trials needed.

“Unlike generics, which use chemicals, biosimilars use organisms. Hence trials are long drawn and getting approvals is a big headache. Also, storage and distribution involves complexity,” says a senior official from a pharma firm which is developing biosimilars.

Moreover, unlike generics, biosimilars cost an average 20 times more.
“If a comparison is to be made, generics cost 80-90% less than patented chemical drugs. But biosimilars cost barely 25% less than patented biologics. Thus, the cost advantage is not very steep,” the official said.

Indian companies will also face severe competition global generics giants such as Sandoz and Teva, which are busy enhancing their own biosimilars portfolio, said experts.

Bhat said these global companies, as well as the likes of Pfizer Inc, one of the world’s biggest drug makers, which is getting into biologics with a heavy focus, have a clear edge because of their affinity to regulated markets and wherewithal.

Kamal K Sharma, managing director of Mumbai-based Lupin, said in biotech, only companies having ability and competency will be able to transition into serious players.

“This is purely because of the capital and technology-intensive nature of the biotech game,” he said.