INNsight articles by Peter Wittner, Interpharm Consultancy

A few months ago I wrote about Biosimilars and how there was finally some movement in the US on the topic of registering Biosimilars. For those who missed the article or have since forgotten it, I made the point that the US was lagging a long way behind Europe on the topic since it had only just got around to proposing a Bill on the topic.

Europe now has in place a regulatory procedure for Biosimilars but the FDA has refused for many years to issue guidelines as to what it wants from copy products. Senators Kennedy, Hatch, Clinton, and Enzi decided to force the issue by putting a Bill S.1695 before the 110th Congress in July 2007. The full title is for those who like such things is: “Biologics Price Competition and Innovation Act of 2007”. For those who are confused, the Clinton Bill does not refer to the former US president, but the Bill proposed to the Senate by his wife Hillary.

The reason for the excitement is that sales of biological medicines totalled US$63.8 bn in 2006, so that even a small slice of the pie would be very tasty indeed. As a result, a mechanism that will allow generic companies a knife to start cutting into the pie will be very welcome.

The major obstacle standing in the way of Biosimilars, or “follow-on biologics” as the US prefers to call them, is demonstrating equivalence. Proving bioequivalence for simple generic products is relatively easy, but proof of equivalence between original biological products and copies requires extensive clinical work.

In addition, it is probable that if the copies are only deemed to be similar, the regulators will not permit interchangeability, so that companies involved in Biosimilars will need to engage in GP detailing, an activity that would be completely new to most of them.

Added to that, a large number of patents and the complexity of the molecules makes copying original products much more difficult for generic competitors. A simple search reveals approximately 8038 results in the Worldwide database for patents with the word Interferon in the title or abstract. Just imagine checking out that number of patents to ensure that your version of Interferon is non-infringing!

Since the original Bill of February 2007 the proposals for creating a procedure have been amended somewhat and now include the intriguing idea that Data Protection for biological products should be extended to 12 years. If this proposal is accepted it will deal a blow to the Biosimilars market, albeit not a fatal one. It will not stop copy products coming to the market; merely delay them by a few more years.

As a sweetener to offset the 12 years of data exclusivity for the original brand during which a biosimilar product may not be approved, Senators are proposing to grant 1 year of exclusivity for the first interchangeable biological product. This is similar to the 180-day exclusivity granted to the first generic company to successfully challenge a patent in order to obtain a Marketing Authorisation from the FDA.

Even though a suitable mechanism now exists in Europe, the market for generic biodrugs, or follow-on biologics or Biosimilars, is still in its infancy, at least in Western markets even though they are marketed in Eastern Europe and parts of Asia. Only a handful of products have been registered in Europe and none in the USA due to the continued absence of any regulatory mechanism.

In Europe, the EMEA has so far approved 2 Somatropin products in 2006 and 3 Epoetin alfa and 1 Epoetin zeta  product in 2007.

 -Somatotropin products are Omnitrope (Sandoz) and Valtropin (Biopartners)
 -Epoetin α products are ‏Binocrit (Sandoz), Epoetin alfa Hexal (Hexal Biotech) and Abseamed (Medice Arzneimittel Pütter)
 -The Epoetin zeta product was submitted to the EMEA by Stada  and its Bioceuticals Arzneimittel AG subsidiary

Interestingly, Stada will sell it as Silapo in Germany and Hospira, with whom they have reached a co-marketing deal will sell it in other countries using Retacrit as the brand name.

EMEA stated in October 2007 that it had already received 8 Biosimilar applications by June and it anticipated receiving a total of 16 applications in 2007 for Biosimilars

Given the high financial and technical barriers to entry, the resultant market for Biosimilar products is likely to be characterised by a limited number of players, mainly the generic giants who can afford the high cost of entry. In addition, the limited number of players combined with high marketing costs means that there is not likely to be intense price competition – discounts will probably be limited to around 20 -25% off the original brand price.

Bigger discounts will be difficult as promotional costs will be high if the copies are deemed to be non-interchangeable. As evidence of this, Sandoz launched its Omnitrope with a 20% discount in Germany at €34.52 euros (~US$44.8) / mg. Apart from this, lower competition levels will reduce the incentive to cut prices so that those who do actually get into the market should make a nice living until cheap copies arrive from India or other Far Eastern sources.

While Europe already has Biosmilars with Marketing Authorisations, the US still does not even have a regulatory mechanism in place. A Biosimilars market in the US still looks a long way off.