What’s new copycat?
Blockbuster biologics aren’t immune to patent expiries and a raft of companies are ready to pounce with copycat versions. But biosimilars aren’t generics – they have their own unique set of problems
By Senior Reporter Katrina Megget
Edited by Jenny Hone/Claire Bowie
2013 will be a landmark year for pharma, when the first copycat version of a monoclonal antibody enters the marketplace. At least six biosimilars of Roche’s blockbuster oncology drug Rituxan/MabThera (rituximab) are currently in clinical development awaiting the 2013 patent expiry date and the race – which features Sandoz, Spectrum Pharmaceuticals and Teva among others – is keen, with forecasts suggesting a biosimilar of rituximab could earn in excess of $800 million in the USA and $500 million in Europe by 2019.
Indeed, biosimilars have the potential to be a real money-spinner for some companies, with analysts anticipating revenues for follow-on biologics in oncology, endocrinology, nephrology, immunology and infectious diseases to reach around $14 billion in 2019. And many in pharma are quick to grasp this, particularly as a whole host of blockbuster biologics face patent expiries in the coming years. The market already has access to biosimilar versions of some growth hormones and insulins, but it is the pricey oncology drugs that are creating waves of excitement. After rituximab, a biosimilar version of Herceptin (trastuzumab) could be expected in 2014, followed by anticipated copycats of Erbitux (cetuximab) in 2016 if not earlier, and Avastin (bevacizumab) in 2019.
All the top generics companies are vying for room, but as the reality sinks in that the first biologics – worth $63 billion in annual global sales – will lose patent protection by 2016, traditional branded pharma companies view a move into follow-on biologics as a commercial necessity. “Biosimilars offer an exciting and potentially highly profitable opportunity,” says Jamie Denison-Pender, chief executive of Prescient Life Sciences. “Novel drugs are still likely to be a strong focus of the large multinational companies but innovation and the investment required to innovate successfully is also extremely risky; biosimilars potentially offer a less risky alternative.”
But it’s not just about what is considered to be an extremely lucrative market, or a move to plug the gaping chasm in pharma’s pipeline. Importantly, biosimilars have the potential to increase patient access and cut the huge price tag that comes with the current biologic drugs.
At least, this is the ideal, but a number of barriers exist that make it hard for biosimilars to get off the ground. Much of the problem is rooted in the fact that a biosimilar cannot be treated in the same way as a small molecule generic. As the European Medicines Agency has recognised: “Due to the complexity of biological/biotechnology-derived products the generic approach is scientifically not appropriate for these products.” According to definitions, a drug that is biosimilar must have “no clinically meaningful differences” with the reference product “in terms of the safety, purity and potency of the product”. As such, similarity can only be determined through extensive clinical trials of the kind not required for small molecules.
Market access for biosimilars
“It is a significant challenge for biosimilars to gain market access,” explains Dr. Andrew Merron, director of Decision Resources’ biosimilars advisory service. “In terms of clinical requirements, the bar is set significantly higher than is required for small molecule generics, and regulators look for robust clinical studies to demonstrate biosimilarity.”
Indeed, the number of studies could be extensive, adds Carolyn Finkle, vice president regulatory consulting for North America at Catalent Pharma Solutions. Besides manufacturing comparability studies with the reference biologic, Finkle says non-clinical in vitro and in vivo studies, clinical pharmacokinetic and pharmacodynamic studies may also be required, as well as pre-specified and justified clinical efficacy comparability margins.
Though a regulatory framework does exist – the Biologics Price Competition and Innovation Act of 2009 now means the USA has an abbreviated biological licence application for the approval of biosimilars, while a legislative framework has also been established in the European Union – it is unclear what regulators will call for on a case-by-case basis, says Andrew Bourgoin, pharmaceutical research analyst at Thomson Reuters. This will be especially pertinent in the USA where the 2009 Act allows the copycat and reference product to be interchanged if there is sufficient clinical evidence, whereas in the EU there is a ban on automatic substitution.
So while a small molecule generic takes about eight years to develop and launch, at a cost of around $1-$5 million, a biosimilar can take up to 12 years and cost $100-$200 million. The approval process itself can take one to two years in the USA and EU with launch usually occurring within six months of approval, though an additional six months is expected for European reimbursement approval.
“The biosimilars space is highly dynamic, and still speculative to a large extent,” Merron says, adding: “Although the market has experience with biosimilars, uptake has remained relatively low.”
The all-important discount
One of the problems is there is no clear answer to whether biosimilars are cost effective – either for companies or the healthcare system. While small molecule generics are known for their low costs and therefore almost guaranteed market access, biosimilars are faced with increased costs for manufacturing, clinical trials and sales and marketing. As a result, the discounted price tag for a follow-on biologic is estimated to range from 10%-50% off the branded drug, which for many payers may be too limited. Says a UK payer surveyed by Decision Resources: “We don’t expect the same price drop as small molecule generics, but it must be at least 10%-20% below the branded product and we would expect more. In order to encourage their use and to make the shift to using biosimilars you have to have a good discount. It’s got to be competitive.
The reality is that pricing could make market access difficult for biosimilars in this era of austerity and reports already suggest they are less likely to “cannibalise” biologics sales in the same way small molecule generics have with their branded counterparts. On top of this, a price war between biologics and their copycat versions is widely anticipated; biosimilars will enter the market at a discounted price, but Merron says branded manufacturers may respond to this by reducing their own prices to compete more effectively. “Ultimately, the branded biologic manufacturer has greater flexibility in cutting prices of the biologic and could out-price biosimilars, leading to no net advantages of the biosimilar with respect to price.”
A question of trust
This situation is further exacerbated, Merron says, by physicians and payers placing a greater level of trust in branded manufacturers. Indeed, the safety profile of biosimilars is a key problem when it comes to market access. A slight change in the manufacturing process can affect its safety or efficacy and there is a very real risk of immunogenicity, which Johnson & Johnson experienced first hand when tweaking the manufacturing process for the anaemia drug Eprex.
“My issue with biosimilars,” says GP Dr Phil Hammond, “is that they’re often very complex molecules and we have to take it on trust that other manufacturers can reproduce them safely, with identical properties. So there’s a heavy onus on the regulatory authorities to make sure they’re up to standard, yet my experience is that they don’t always get it right, particularly on patient safety issues.”
It is this safety aspect that signals alarm bells for clinicians when choosing between biologics and the copycat counterpart; indeed, research suggests they are often reluctant to prescribe a biosimilar in the first instance. But Paul Tredwell, head of biopharmaceuticals at Sandoz UK believes clinical data and education will fuel uptake: “The more experience a clinician has with a product the more confidence they will have prescribing it. If a biosimilar is licensed in 25 countries and has seven years’ safety and efficacy data, including a head to head trial, the question for clinicians becomes how much data on a biosimilar is enough?”
It’s a moot point. Surveys by Decision Resources suggest that irrespective of what regulators demand, physicians want to see a greater level of, and more robust, clinical data before they feel comfortable prescribing a biosimilar. For instance, European haematologist-oncologists expect more extensive clinical trial data for biosimilar monoclonal antibodies than those in the USA. The majority of those surveyed would require at least two Phase III trials before they felt comfortable about prescribing biosimilar rituximab. And doctors also indicated they would only use a biosimilar monoclonal antibody in the indication it was tested in, even if the reference product was approved for several indications.
This attitude to biosimilars, particularly the monoclonal antibodies, is likely to pose a market access problem in Europe – particularly because of the automatic substitution ban – and this, Merron says, significantly restricts their potential uptake. Even though the FDA has developed a separate pathway in the USA that includes interchangeability, Merron believes uptake will still be a challenge both clinically and commercially because of the expected high clinical trial burden needed to prove substitution. First-in-class biosimilars will be most affected by slow uptake, he says, as “physicians are likely to adopt a wait-and-see approach or use biosimilars in only a few patients and wait for other physicians to use them before they feel comfortable”. Only because of prescribing quotas in Germany, which offer greater incentives to prescribe biosimilars, does this country pose an exception to the rule.
These barriers to entry add another level of complexity for the biosimilar manufacturer – the need for a more determined sales and marketing strategy than for small molecule generics, says Tredwell. “Teams must be clinically trained and marketing must be equivalent if not better than that of the originator companies’, while factual messaging must be focused at clinician level and communicated effectively.” Bourgoin agrees, saying the stronger the brand recognition the more success the biosimilar is likely to have. Adds Merron: “There is different potential for biosimilars to generate revenue but also different risks depending on which biosimilar is being developed.”
Is biobetter better?
The brand issue can also be a headache for biosimilar market access if there is competition from a biobetter – effectively a second-generation biologic with enhanced efficacy, safety or ease of use. Some companies, such as Teva, Pfizer and MedImmune, are pursuing the biobetter rather than the biosimilar route and this, say some analysts, could be a wise move as the USA has a 12-year exclusivity period for originator biologics, including biobetters. Says Dr Herren Wu, vice president and head of biosuperiors and antibody discovery and protein engineering at MedImmune: “Biobetters provide additional clinical benefits to patients over biosimilars and they also provide a good risk balance to R&D portfolios.”
Nevertheless, although multiple challenges and hurdles remain for biosimilars, analysts are optimistic about future success in this sector. Indeed, notes Denison-Pender, “even if a biosimilar comes in at half the price, you are still looking at a 30% margin, which is more than a small molecule generic and represents a ‘comfortable’ return on investment”. It’s a time of anticipation as we await 2013 and a biosimilar rituximab. Watching how the world reacts then will define how other companies move forward and how a new era of drug access and innovation is spurred.