Although currently tiny and narrowly focused on a handful of disease areas and countries, the biosimilar industry is set to expand as patents expire on top biologics, payers push for their broader adoption to cope up with burgeoning costs and vision for pharma emerging markets. The biosimilar market is expected to grow from $3.4 billion in 2016 to $11 billion in 2021. Substantial savings with these productive alternative treatments have been promised, but the question is will they deliver a feasible alternative treatment?
The signs of the success of biosimilars are apparent but many questions still loom. How will the commercial prospects play their role? What will be the go-to-market model for new entrants? Which region has the greatest potential?
Pharmaceutical companies and research organizations are all set to leverage on the impending biosimilars markets. The factors necessary for maximizing ROIs include high-levels of commitment, well chalked-out strategies and spirit to overcome formidable hurdles. The changing face of biosimilars comes at a time when the global pharmaceutical industry is bearing the brunt of two important events-unprecedented patent expirations on the world’s top pharma brands along with the financial crunch that has entailed healthcare systems to make sustained and significant cost reductions.
So what exactly are biosimilars and what are the main challenges/threats facing the industry?
What are Biosimilars?
A biosimilar is a biologic drug that is highly similar to an existing approved product with some inconsequential differences in clinically inactive components. However, there are no clinical differences between the reference product and the biosimilar in terms of purity, safety and potency.
Challenges Faced By Biosimilars
- Increased Timeline for Production and Approval
In order to cut down patient costs, pharmaceutical manufacturers turned to developing small molecule generics in the beginning, a commonly accepted identical version of brand name drugs. But now manufacturers are turning their focus on developing biosimilars of large molecule biotechnology drugs to leverage on low developmental expenses, such as avoiding initial clinical safety and research discovery besides efficacy testing expenses. They often, however, do not have the same level of flexibility to slash production expenses like many generic manufacturers. Common challenges faced by biosimilar manufacturers in processing and packaging are the variability of large molecules and providing the FDA with adequate proof of clinical safety.
The various conditions under which cells are cultured can change the structure of the molecules and clinical behavior of biosimilars. This can potentially introduce impurities, contaminating viruses, traces of cell protein and DNA. Additionally, since the molecular structures of biosimilars are greatly complex, there’s a strong dearth of the right analytical tools to precisely identify the difference between the original therapeutic protein and the biosimilar. While the degree of similarity in a molecule’s biological and chemical identity can be shown, the ability to explicitly demonstrate that each biosimilar can accurately act as a drug with the identical amount of effectiveness and clinical safety as the original product hasn’t been found yet. All of these factors could considerably decelerate the time required for production and approval. Also, as biosimilar manufacturers target more complex proteins, the development costs will possibly skyrocket as developers face regulatory challenges to prove heavy degrees of similarity.
The complicated nature of biological molecules needs specific nomenclature guidelines. And naming biosimilars has heightened this complexity. So far, several inconsistent and different models have been applied in different parts of the world, which has resulted in increasing concerns over the toughness of the World Health Organization’s International Nonproprietary Name (INN) system currently in place. According to Mindy Prasad, a clinical pharmacist for Blue Cross Blue Shield of Michigan, biosimilars use proprietary names, which shows how different biosimilars are when compared to generic small-molecule drugs. This naming system can pose a strong challenge in environments that depend heavily on non-proprietary names when referring to drugs, like hospitals, and can puzzle patients since a biosimilar can apparently seem like a completely different drug compared to the reference product. Such challenges require a high level of education on the part of pharmacists, providers and patients.
In January 2017, the FDA issued guidance on naming of biologics and biosimilars, which explains that each biosimilar must have a proper name comprised of a core name hyphenated to a four-letter suffix that represents the manufacturer. For instance, the biosimilar of AbbVie’s Humira is Adalimumab-atto (Amjevita). The suffixes designated by the FDA should forestall inadvertent and reckless product substitution. This move by the agency will make these products discernible so that only those drugs that have been approved as biosimilars for a given indication will substitute innovator treatments for that indication thus preventing accidental alternation between various biological products with the same core name.
- Recruitment Challenges
Even with minor clinical trials, biosimilar sponsors face a number of challenges in identifying clinical sites and investigators who really understand their unique development issues and can entice a decent number of participants. Investigators favor involvement in research on impressive new treatment advances, in contrast to follow-on therapies. This directs sponsors to non-academic sites, many of which have limited experience and require extra staff training. Similarly, patient recruitment for these products is difficult and can derive benefit from study protocols that set proper inclusion/exclusion criteria and meticulously define the right patient population.
In developing nations, recruitment is comparatively easier. However, distant research programs face challenges in obtaining timely and adequate quantities of reference comparators on account of import/export demands and concerns about waster and overage. According to former director of theOffice of New Drugs (OND) in the Center for Drug Evaluation and Research,John Jenkins, open market sourcing of reference products could be a better fit for smaller phase 1 trials because of shorter lead times and concerns among the sponsors about keeping study data confidential. He adds for larger phase 3 trials, direct sourcing from the reference product manufacturer can lead to a more timely and reliable supply at a more foreseeable price only if the innovator doesn’t hesitate to provide its product.
There can be some serious issues when switching patients back and forth between reference products and biosimilars. This is the next big obstacle in the path of biosimilars and could create an enormous challenge to the reference products’ markets. Such interchangeability is what permits generic drugs to gain rapid market share. However, some prescribers may be concerned about the safety. Pharmacists might also struggle with interchangeability since just 23 states and Puerto Rico have regulations governing the use of biosimilars, with the laws varying considerably. Adverse events like immunogenicity reactions should immediately be reported to the FDA and the manufacturer.
Immunogenicity studies are an extra consideration, especially for interchangeable biosimilars although they are normally not required for manufacturing changes. However, designation of interchangeability should allow companies to substitute such a biosimilar for its reference, just as they do with small-molecule generic drugs. The candidate on which interchangeability examination would be conducted must be the same as the one approved in the absence of an interchangeability designation. Biosimilars have no higher regulatory standard, and the data burden to get a designation of interchangeability is heightened.
According to the Biologics Price Competition and Innovation Act, an important factor for biosimilars to be considered interchangeable is they need to produce the same clinical result as the reference product in a given patient. Developers also should have enough proof that switching a patient back and forth between the biosimilar and original products does not pose a risk.
- Difficulties of Biosimilar Pricing
Biosimilars were supposed to be priced between 20% and 40% less than their reference products, but such has not been the case, partly because of a shortage of interchangeability designations from the FDA. Prasad states that biosimilars have no incentives to be made preferable over their brand counterparts as far as the pricing is concerned. Even if biosimilars alleviate some of the cost burden, the economic effects of introducing them into clinical practice remain vague. The wholesale price of Zarxio was approximately 15% less compared to its reference product Neupogen in the US in 2015. This prudent price gap may cause a sluggish uptake of biosimilars, especially if insurance payers, physicians and patients are unwilling to substitute the reference drug over growing concerns of safety and efficacy. In addition, tiny price gaps may galvanize the manufacturers of reference products to remain on the market. The reference manufacturer can also reduce the price of their drug to remain in the rat race. Alternatively, the price of a biosimilar may shoot if the reference drug manufacturer avoids competing with the biosimilar. When taken together, the evolution of costs for reference drugs and biosimilars cannot be predicted in the nascent stages and will possibly determine the acceptance of biosimilars among prescribing physicians, insurance payers and patients.
It’s no secret that the general public is worried about the rising cost of healthcare, particularly on the escalating price of drugs. People now want quality drug at lower prices and biosimilars have the potential to meet this demand. However, the topic of biosimilar pricing remains complex and the path forward is still unclear.
To unlock the potential of biosimilars all that is required is a strong focused strategy along the entire value chain right from optimizing the clinical development program to developing the most suitable strategy for commercialization. There also has to be a right balance on in-house investments in relation to strategic alliances in order to achieve cost effective outputs. The time-to-market will also be reduced and extra tailoring of geography will help cope up with heterogeneous landscapes. For example, entry into pharma emerging markets will be strongly governed by partnerships with powerful local players.
The experiences with biosimilars have so far remained limited, indicating that they hold immense potential in the years to come. However, a set of obstacles is destined to creep in the way of its success. The development of biosimilars will take different paths in different continents during their process of evolution. And from among the diverse mix of potential players and entrants, there will be an ultimately tiny set of winners.
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