With the FDA staff now scrutinizing applications for the first two biosimilar drugs seeking approval for sale in the US (Zarzio by Sandoz/Novartis and Remsima by Celltrion/Hospira, see FiercePharma article , I thought I would replay my take on the potential of biosimilars as ROW (rest-of-world) products from September 2013.
Regular readers (Retronymers? just made that up) will know that I think that biosimilar drugs (that is, generic versions of biologically-derived therapeutics like antibodies and growth factors) are one of the few product opportunities on which to base a viable global health business (others being vaccines and some diagnostics, and medical devices). The value of these drugs is that they address difficult-to-treat, often-chronic diseases (like cancer, diabetes, and arthritis) and, if generic, could be affordable to the world’s growing middle class, and, with subsidy, to many of the world’s poor, especially if non-injectable versions were available. My not-too-distant-future scenario is that the major generics companies, like Sandoz, Teva, Mylan, and Hospira, in addition to fighting for shares of the markets in the US and EU, will also sell into the ROW (rest-of-world) markets and competition will drive prices as low as possible. (I should note that a few companies, like India-based Cipla, already have an explicit ROW strategy.) My scenario hit a speed bump in July though when Teva, the world’s largest generic pharma, and Lonza, a Swiss-based biomanufacturing company, formally dissolved their 2009 partnership to develop biosimilars, citing a reassessment of the costs of clinical testing and getting approval in the US (FierceBiotech article). Although Teva stated it will take on biosimilars in a “highly selective approach,” it and Lonza apparently concluded that the USFDA, as indicated by its ongoing biosimilar regulation drafting, will require almost the same level of clinical evidence and manufacturing scrutiny on follow-on biologics as for the original drugs. And higher costs mean lower profit margins in the usually high-margin US market.
In contrast to Teva’s and Lonza’s redirection, other companies are continuing their pursuit of biosimilars. In June, two companies received recommendations for approval from the European Medicines Agency for drugs similar to Johnson and Johnson’s antibody drug, Remicade: Remsima made by South Korean biotech Celltrion and US company Hospira’s Inflectra (another FierceBiotech article). In August, Biocon, India’s largest biotech company, announced that it expects its copy of Roche’s anticancer drug, Herceptin, to be available next March (FiercePharma article). Roche has already reduced the price of Herceptin in India by a third so it looks like it plans to compete with Biocon on price. Last June, Sandoz, the generics subsidiary of Novartis, started a Phase III trial of its version of arthritis drug, Enbrel (formerly made by Wyeth now Pfizer), one of five biosimilars it has in development (yet another FierceBiotech article). And in April, Cipla launched its version of Embrel in India (another FiercePharma article). As for Samsung Biologics, a new venture of the electronics giant launched last year that I had theorized the company would be a major player (“Discount Drugs”), the company seems to be off to a slow, quiet start.
Interestingly, there are two startup companies based in the US with the explicit business plan of bringing low-cost biosimilar generic drugs to the ROW markets. Epirus Biopharmaceuticals, a Boston-based company that I wrote about in July (“Soup to Nuts”), has an approach, which it has branded, to “combine new technologies and strategies to address macroeconomic trends in emerging environments in order to deliver biosimilar products to patients” (Epirus Approach). Last week, the company released results from a comparative Phase III trial of BOW-015, its version of Remicade, that showed a slightly better response rate than the original drug (Epirus press release). The company also said it planned to submit filings for regulatory approval in “targeted emerging markets” over the next year. The second company is Coherus Biosciences, Inc. (Coherus) that is “focused on delivering high quality biosimilar therapeutics that will expand the access of important medicines to patients worldwide.” Started in 2010 in the San Francisco area by Amgen and Genentech veterans, the company has raised about $30 million from VCs including Helix and Lily Ventures and has licensed in two biosimilar products from Daiichi-Sankyo of Japan for unspecified Asian markets. Last week, the company struck its first big corporate deal with Baxter International, a mega health care product company, which agreed to $30 million upfront payment and $216 million in contingent milestones for an etanercept/Enbrel biosimilar for Europe, Brazil, Canada, and other markets (Coherus press release).
A question still to be answered is what will be the regulatory strategy of companies developing biosimilars for global markets. One strategy may be just to pay the price for US approval and bear the costs of US regulator scrutiny of their manufacturing. Another may be to skip the US and get approval in the EU that requires human equivalency trials but may be more lenient on the extent of preclinical and manufacturing data than the US. Going directly to ROW countries is problematic since some require approval by the US or EU first, have no biosimilar approval path (Russia), or are still developing their own regulations (like India and China). Brazil and South Korea are the exceptions with their own biosimilar regulatory process (for a nice write-up see Cliff Mintz post at Lifescienceleader.com). Needless to say patchwork regulation is expensive and a barrier.
I suggested my own modest solution, especially relevant for the lower-income countries, in two previous posts (“Bottleneckrophobia” and “Trick not Treat”). I proposed beefing up a WHO-based program, the Prequalification of Medicines Programme (PQP). The PQP evaluates generic drugs for the “big three” global diseases for purchase by international agencies like UNICEF, and it also inspects manufacturers and clinical trial companies and certifies national quality control laboratories (PQP Fact Sheet). In 2011, in addition to approving 35 products, the PQP conducted 90 inspections in 18 countries, ran 32 training courses, and certified six labs, all with a budget of about $10 million per year provided by UNITAID, the global health drug purchase financing group (UNITAID Programs). In my posts I suggested strengthening the PQP approval process with donated expertise from wealthy nations’ regulatory agencies, like the FDA, and the multi-national pharma companies, and generating revenue through “user fees,” like the FDA does, to paid by companies seeking to avoid the expense of country-by-country registration in that with the PQP-approved products would be eligible for purchase by PQP-approved buyers, which would be any government or group able to commit to negotiated volumes and prices. Clearly, substantial funding and political will are needed to strengthen the PQP, but WHO has been successful in setting up a similar system for the pre-approval of vaccines for UN supply (WHO vaccine program). My guess is that if companies realize a global generics approval system will improve their profit potential, they will motivate, and maybe fund, the authorities.