On September 3, 2015, in a Press Release, Novartis announced, “Zarxio(TM) (filgrastim-sndz) is now available in the United States. Zarxio is the first biosimilar approved by the US Food and Drug Administration (FDA) and the first to launch in the US.” Zarxio is being marketed by the generic drug unit of Novartis – Sandoz.
The company highlighted: “With the launch of Zarxio, we look forward to increasing patient, prescriber and payor access to filgrastim in the US by offering a high-quality, more affordable version of this important oncology medicine.” This statement may be interpreted as an acknowledged of a research based global pharma major that high-priced biologics create a notable access barrier to a large number of patients, even in a rich country such as the United States. It also underscores the increasing prescription opportunities for cheaper biosimilar drugs.
Zarxio will initially be available with a 15 percent discount. This needs to be viewed against usual price drop of around 20-30 percent for biosimilar drugs in Europe, as compared to the original molecules. It is expected that price differences between biosimilar drugs and the original ones, would vary widely from as low as 10 percent to a hefty 60 percent, in the global markets.
Prior to Novartis’s Press Release, USFDA announced Zarxio’s approval in a separate ‘FDA News Release on March 6, 2015, indicating that it can be prescribed by a health care professional for:
- patients with cancer receiving myelosuppressive chemotherapy
- patients with acute myeloid leukemia receiving induction or consolidation chemotherapy
- patients with cancer undergoing bone marrow transplantation
- patients undergoing autologous peripheral blood progenitor cell collection and therapy a
- patients with severe chronic neutropenia.
Though such types of drugs are available in the important markets such as, Europe, Australia and India, the launch of Zarxio heralds the dawn of a new era of biosimilar drugs in the United States – the numero uno of the global pharma market.
Incidentally, USFDA’s approval of biosimilar drugs is an outcome of a relatively recent healthcare reform in the United States, when President Obama signed into law the ‘Affordable Care Act’ on March 23, 2010.
The key benefit:
In its above ‘Press Release’, Novartis captured well the key benefits of biosimilar drugs , as follows:
“While biologics have had a significant impact on how diseases are treated, their cost and co-pays are difficult for many patients and the healthcare budget in general. Biosimilars can help to fill an unmet need by providing expanded options, greater affordability and increased patient access to life-saving therapies.”
Major growth drivers:
According to July 2015 report of ‘MarketsandMarkets (M&M)’ the global biosimilars market is expected to grow to US$6.22 Billion by 2020 from US$2.29 Billion in 2015, growing at a CAGR of 22.1 percent from 2015 to 2020.
The major growth drivers of the global biosimilars market are expected to be:
- Growing pressure to curtail healthcare expenditure
- Growing demand for biosimilar drugs due to their cost-effectiveness
- Rising incidences of various life-threatening diseases
- Increasing number of off-patented biologics
- Positive outcome in the ongoing clinical trials
- Rising demand for biosimilars in different therapeutic applications such as rheumatoid arthritis and blood disorders.
European Union (EU) had a head start of 5 to 7 years to put its regulatory pathway for biosimilar drug development and approval process. Thus, at present practically most the entire value sales of biosimilar drugs take place in the EU.
As, cheaper biosimilars would continue to hit the US market, insurance companies are expected to encourage the use of such drugs instead of highly expensive original ones.
According to Express Scripts report released in December 2014, the US healthcare system could clock savings in drug costs around US$250 billion in the first decade of availability of biosimilars drugs and the approval of Zarxio would help patients saving more than US$5 billion in the the world’s largest market for biologics.
By 2020, several blockbuster biological products with global sales of more than US $67 billion would go or are going off-patent, creating great opportunities for biosimilar drugs the world over. Some of these drugs are Avastin (Roche), Humira (AbbVie), Synagis (AstraZeneca), Aranesp (Amgen) and Enbrel (Amgen, Pfizer).
However, the crux of its success, to a great extent, would lie on physicians’ confidence to prescribe large molecule biosimilar drugs, as these are new and not exact replicas of the original biologic molecules, unlike the small molecule generic drugs.
Possible growth barriers:
The success requirements of large molecule biosimilar drugs would not mimic the same for small molecule generics, anywhere in the world.
In my view, there are two types of critical barriers to success with biosimilars, both tangible and intangible in nature.
The same M&M report lists the following factors as possible tangible barriers to fast growth of biosimilar drugs:
- High manufacturing complexities and costs
- Stringent regulatory requirements in countries
- Innovative strategies by biologic drug manufacturers to restrict the entry of new players
I would very briefly touch upon each one of these, hereunder:
I. High manufacturing complexities and costs:
This is primarily because, the therapeutic characteristics of biosimilar drugs are significantly influenced by their manufacturing methods. For example, it is quite possible that based on the manufacturing system that is adopted, the same starter ingredients may give substantially different results.
II. Stringent regulatory requirements:
Among many other stringent regulatory requirements, I would highlight in this article just the following two:
A. The labeling:
It is noteworthy that USFDA has named Zarxio with the placeholder nonproprietary name “filgrastim-sndz” and not as ‘filgrastim’, the nonproprietary name for Amgen’s, Neupogen, for which Zarxio has been approved as a biosimilar.
To quickly recapitulate its background, in July 2014, the World Health Organization (WHO), which oversees the system of International Nonproprietary Names (INN), recommended that biosimilar drugs would receive the same nonproprietary name, but with a four-letter code at the end.
This is primarily because, innovator biologic drug companies and also some doctors’ groups argue that molecular structures of biosimilar drugs are similar, but not exact replicas of the original ones. Hence, there is a need to differentiate them, while assigning INN.
They reiterate that giving biosimilars the same INN as the original biologic molecule may cause confusion among both the doctors and the patients. It could also make the tracking of adverse reactions, as and when these will be reported, more challenging.
Consequently, it has now been accepted by the regulators that biosimilars would receive the same nonproprietary name but with a four-letter code at the end to differentiate such drugs from the original biologics.
The above labelling issue, in turn, creates a barrier to possible interchangeability or automatic substitution of expensive original biologics with much cheaper equivalent of biosimilar drugs. I reckon, this could pose a critical obstacle in the initial take-off of the later.
According to a July 4, 2015 article, titled “Fate of cost-saving biosimilar drugs may hinge on naming policy”, published in ‘Modern Healthcare’, the USFDA has the following two pathways for licensing of biosimilar drugs:
- For being designated as “similar” in efficacy and safety to an original biologic.
- For being approved as being “interchangeable,” which requires a much higher review standard and could take years and millions of dollars to obtain the needed clinical trial data.
According to this article, none of the biosimilar products currently under USFDA review are in the interchangeable pathway.
III. Innovative strategies to restrict entry of new players:
All the above innovative strategic moves and arguments, where biologic drug manufacturers are allegedly involved, may seriously restrict not just the entry of newer biosimilars, but also their faster prescription throughput.
Safety concern (immunogenicity):
Additionally, a critical safety concern on biosimilar drugs is being raised by the manufacturers of original biologics. This concern involves immunogenicity, which means the way a biosimilar drug provokes an immune response in the body. Original biologic drug manufacturers contend, since biosimilar molecules are not exactly the same as originals and their long term safety, related to immunogenicity, has not been tested, these drugs cannot be construed as having the same safety profile as the innovators’ biologics.
Besides, ‘Free-Trade-Agreements (FTAs)’ are also likely to be cleverly used by the original biologic drug manufacturers through their respective Governments, to the extent possible, for safeguarding the beachhead from the marketing onslaught of biosimilar drugs.
A perception barrier too:
Here comes an important perception-based intangible barrier to desirable prescription growth for biosimilar drugs.
Probably gauging it, post Zarxio launch, none other than the CEO of Novartis – Joe Jimenez, reportedly said: “He’s not expecting too much of a splash before 2020.”
This is understandable, as the doctors’ favorable disposition towards biosimilar drugs would be a crucial factor for prescription growth of these medicines.
A recent doctor community survey from QuantiaMD primarily captures the doctors’ thoughts and feelings on biosimilar drugs. This study was done with 300 specialists and primary care physicians.
Some of the notable findings of the report are as follows:
- While 78 percent of the doctors polled said they were familiar with the term “biosimilar,” only 38 percent could name a biosimilar that’s under consideration for USFDA approval and would be relevant to their patient population.
- Only 33 percent could name a biosimilar at all.
Researchers then narrowed down the original 300 physicians polled into a group of 120 “prescribing specialists.” This group of 120 doctors are currently prescribing biologics and most likely to prescribe biosimilar drugs in the years ahead. The study reported:
- Only 17 percent of that segment said they are “very likely” to prescribe biosimilars.
- And 70 percent said they either aren’t sure or are “somewhat likely’” to prescribe a biosimilar.
- Only 12 percent of prescribing specialists are “very confident” that biosimilars are as safe as the original biologic version of the drug.
That said, 12-year ‘Data Exclusivity’ period for biologics in the United States, is one additional barrier to early introduction of cheaper biosimilar drugs, as considered by many.
On this issue GPhA – the generic drug makers’ group in America reportedly issued a statement, criticizing a paper of Biotechnology Industry Organization (BIO), saying:
“Market exclusivity acts as an absolute shield to their weak patents. Thus, from a practical perspective, extending market exclusivity beyond the Hatch-Waxman period would block the introduction of generic competition for almost 20 years, derailing any potential cost savings by Americans.”
The challenges ahead:
Considering all these together, the challenges ahead for quick acceptance of biosimilar drugs are indeed mind-boggling. The situation necessitates enough innovative and painstaking work by all concerned to gain the doctors’ confidence on biosimilar medicines. It goes without saying that success in generation of enough prescriptions for these drugs is the fundamental requirement to benefit the patients, which, in turn, would lead to significant savings in health care cost, as estimated above.
As more innovator companies start joining the biosimilar bandwagon, the physicians’ perception on these medicines, hopefully, would change sooner.
The status in India:
Although it appears strange, but a fact nonetheless. Biosimilar drugs approved in India till August 2012, followed the requirements of the regulators as provided mostly in the Drugs and Cosmetics Act for small molecule drugs, which are incidentally quite a different kettle of fish.
According to GaBI-online, the first locally produced biosimilar drug was approved and marketed in the year 2000. India announced implementation of its ‘Guidelines’ for ‘Similar Biologics’ much later, on September 15, 2012.
Indian ‘Guidelines’ for ‘Similar Biologics’ were jointly developed by the Department of Biotechnology (DoB) and the Central Drugs Standard Control Organization (CDSCO). The ‘Guidelines’ outline requirements for pre-clinical evaluation of biological products, claiming ‘similar to already approved biologics’. Thus, Indian regulators will partly rely on data from the already approved products to ensure safety, purity, potency and effectiveness of these drugs.
A wide variety:
A wide variety of biosimilar drugs have been approved and marketed in India, since then.
According to International Journal of Applied Basic Medical Research (2014 Jul-Dec; 4.2: 63–66), biosimilars in India consist primarily of vaccine, monoclonal antibodies, recombinant proteins and diagnostics, insulin, erythropoietin, hepatitis B vaccine, granulocyte colony stimulating factor, streptokinase, interferon alpha-2B and epidermal growth factor receptor.
The above article states that there are about 100 biopharmaceutical companies actively involved in research and development, manufacturing and marketing of biosimilar therapeutic products in India. Only 14 therapeutic drugs (similar biologics) were available in 50 brands in 2005. This number had grown to 20 therapeutic drugs in 250 brands in 2011.
The status of similar biologics approved and marketed in India is elaborated in this Table 1.
Some of the key Indian players of biosimilar drugs are Dr. Reddy’s Laboratory (DRL), Lupin, Zydus Cadila, Serum Institute of India, Biocon, Reliance Life Sciences, Wockhardt, Zenotech Laboratories and Intas.
I wrote on a related subject in this blog dated December 15, 2014 titled, “A Great News! But…Would This ‘Golden Goose’ Lay Golden Eggs?”
Opportunities for biosimilar drugs are expected to expand significantly all over the world, basically driven by the need for affordable biologics and healthcare cost containment pressure in many countries.
As I had articulated before, unlike small molecule generics, unlocking the true potential of large molecule biosimilar drugs in a sustainable way would demand innovative, clear, razor sharp and highly focused business strategies across the value chain.
For faster growth in prescriptions, biosimilars would call for a hybrid marketing model of small molecule (branded) generics and large molecule original biologics. Ability to craft impactful value proposition and ensuring its effective delivery for each stakeholder, smart and innovative use of interactive and participative digital tools both for doctors’ and patients’ engagement, of course sans complexities, would decide the ultimate commercial fate for each of these types of products.
To effectively reap rich harvest from the new space thus being created, the challenges are also too many. The concerns expressed on biosimilars may also be genuine, but the regulators should take care of those before granting marketing approval to benefit the patients, in a meaningful way.
Overall key drivers and barriers for success with biosimilar drugs would remain almost the same, both for global and local players. However, carving out and thereafter expanding share in this market, sizably, won’t be a piece of cake for any company, understandably.
Quite naturally, the innovator companies for biologics would go all out to retain their turf as much as possible, despite the entry of cheaper biosimilars. This is expected to continue by reinforcing the belief of the physicians and the patients that biosimilars are not quite the same as the original biologic molecules.
Effective proactive measures need to be initiated, soon, by the regulators and all other stakeholders to spread the right message, protecting the patients’ interest. Otherwise, apprehension of the doctors on biosimilars in general, regarding safety, efficacy, substitution and interchangeability may persist for some time to come, negatively impacting faster and desirable prescription growth of these drugs all over the world, including India.
By: Tapan J. Ray
Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.