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Biosimilars opportunity for pharma

Posted 09/02/2011 by KatieJ

With patents already expiring on many major drugs, their parent innovator pharma firms are not surprisingly looking to alternative strategies to generate revenue to sustain increasingly expensive drug development pipelines. Several, according to recent reports, have been eyeing the opportunities for developing biosimilars – the generic equivalents of biological drugs – as a possible low risk approach to bumping up revenues.

While the idea that innovator pharma firms should develop generic copies of their own drugs may seem surprising, however, in this case it makes perfect sense. Biosimilars are way more complex than standard generic drug copies, and no two products will ever be exactly the same. Companies that produce them will need to possess sophisticated equipment and lab expertise in order to create them.

Worldwide sales of all biologic drugs reached $130bn in 2009, according to IMS Health, while biosimilar copies could be worth tens of billions of dollars by the second half of the decade. And according to regulatory affairs expert Mark Richardson, speaking at a recent VISION business briefing on the topic in London in January, the average cost of a biosimilar drug is just 10-15% below the branded product price – which compares very favourably with the 40% lower cost for standard generics.

Fourteen biosimilar drugs are currently approved and on the marketplace in the European Union, where regulations have been in place since 2005, Richardson commented. As well as the shortened development process compared with the originator biotech drug, Richardson remarked that pharma companies able to demonstrate the safety and efficacy of their biosimilar drug in one clinical indication can receive approval for all other indications for which the original biotech drug has been licensed. ’If you demonstrate efficacy in one [drug] indication then that can widen the market to all these indications,’ Richardson said: ’Which is a very generous gift from regulators.’

Over in the US, however, legislation has been much slower in coming. While the Biologics Price Competition and Innovation Act which came into force last year sets out a period of data exclusivity for innovator biotech products of 12 years, many other details have yet to be ironed out, particularly over the extent of information sharing by innovators and the ’substitutability’ of biosimilars for their branded counterparts. And with the EU, Japan and Canada already forging ahead with developing a market for biosimilars after developing their own regulations, some pharma insiders warn the US will find it increasingly difficult to gain a foothold.

Cath O’Driscoll, Deputy editor

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