Global Market Description & Drivers
Global biosimilar market is currently driven by presence of large geriatric population and increase in the prevalence of chronic diseases such as cancer, diabetics, cardiac disorders, growth hormone deficiency, chronic kidney disease and autoimmune diseases. American Cancer Society estimated that in 2016 ~1.6 lakh people suffered from cancer and in the same year oncology accounted for 32% market share. With worldwide biotechnology drug market projected to grow to $ 337 billion by 2022, the global biosimilar market which was pegged at USD 3.81 billion in 2016, with a conservative CAGR of ~26% is now expected to reach USD 15.43 (25-35) billion by 2022.
World is witnessing a rise in demand for Biosimilars as they offer an affordability factor equivalent to being ~30% cheaper than innovator drugs which have been driving healthcare costs to the ceiling. Lower prices increase market penetration and as the number of players increase greater price erosion is observed. These scenarios have triggered faster drug approvals, transformation of reimbursement policies and government support via initiatives to encourage biosimilar development worldwide to increase accessibility. Last year WHO launched a pilot program for prequalification of biosimilar drugs for various types of cancers to enhance accessibility of these drugs in the developed nations. Rituximab (targeting non-Hodgkin’s lymphoma and chronic lymphocytic leukaemia) and Trastuzumab (targeting breast cancer) were primarily covered under this program. Coupled with blockbuster drug expiries, high margins, increasing awareness among patients and doctors and rising interest from insurance companies biosimilars has become a lucrative market for various players.
However the industry still offers considerable barriers to entry with high manufacturing cost, high complexity and availability of low priced generic drugs. Also the presence of Non-original biologics and bio betters which are invading the market with fewer regulations and relaxed IP protection offer challenge to biosimilars which continues to struggle with the lack of clear guidelines for interchangeability and substitution in many countries. However companies are gravitating towards strategic collaborations including merger & acquisition to widen their product portfolio and are continually exploring innovative ways for partnerships to counter these barriers. Most recently Biocon and Sandoz announced a global partnership to develop, manufacture and commercialize new next-generation biosimilars. Outsourcing of manufacturing to third parties is also being explored in a big way to increase capacity as means for quick expansion.
The Evolution of Regulatory Pathway
European Medicines Agency (EMA) has pioneered in biosimilars regulatory space by providing the first Biosimilar Regulatory framework in Oct, 2005 which
paved way for the subsequent approvals of 41 biosimilars beginning with Sandoz’s Omnitrope [somatropin] back in 2006. EMA dominance in biosimilars continues owing to speedy approvals and improving healthcare infrastructure.
USFDA: The U.S. biosimilar market is relatively new. The legislation to create a regulatory pathway for biosimilars was passed in 2010, with the Biologics Price Competition and Innovation Act (BPCIA), as part of the Affordable Care Act. In 2012 FDA issued the first draft guidelines for developing and registering a biosimilar in the United States, and it took further three years to approve Sandoz’s Zarxio (filgrastim-sndz) as the first biosimilar. Since then FDA has gained momentum and has approved 7 products in 2017 alone. Close to 40 biosimilars are in clinical development, most of which are in late stages. In the last 5 years, there has been a rapid rise in the R&D projects in biosimilars. Over the next five years more players are expected to launch their biosimilar brands of blockbuster drugs in the U.S. biosimilar market.
Rest of the World: Emerging markets including the Asia Pacific region will continue to be of key focus in any company’s business strategy owing to lower regulatory barriers resulting is early revenue streams. These countries have mix out of pocket, payer and government payment models, flourishing medical tourism and developing health infrastructure which will contribute greatly towards the growth of the market in next 5 years. Countries like Japan, Singapore, South Korea, ANZ, Taiwan and Brazil already have biosimilar pathways in place while other countries like Columbia, Jordan and Venezuela are playing catch up and are in the process of developing and establishing the same. Some countries like Vietnam and Philippines have also been seen to adopt approval pathway similar to generic products.
Other Factors: Interchangeability, Switching and Substitution
EMA refers to interchangeability as the possibility of exchanging one medicine for another medicine that is expected to have the same clinical effect. This could mean replacing a reference product with a biosimilar (or vice versa) or replacing one biosimilar with another. Replacement can be done by either switching or substitution. Switching happens when the prescriber decides to exchange one medicine for another medicine with the same therapeutic intent. While substitution (automatic) is the practice of dispensing one medicine instead of another equivalent and interchangeable medicine at pharmacy level without consulting the prescriber
EU doesn’t have an official position on interchangeability, these falls within the remit of EU Member States. Hence various countries like Germany, Finland, Netherland and Scotland have taken national positions to bring interchangeability of biosimilars under the supervision of the prescriber. The caregiver in charge of the patient is allowed to use his/her judgment to prescribe appropriate medicine reference or biosimilar. Biosimilars in general are regarded to be safe and efficacious as the reference and are not expected to cause or increase immunogenicity.
US legislation on the other hand clearly distinguishes between biosimilars and interchangeable biosimilars in terms of clinical evidence. Draft guidance on the same was released by the agency last year. Since US define interchangeability under federal law, it might lead to misconception about product quality. It also implies the need for additional and specific data for already stringent FDA requirements for biosimilar approval.
Hence to gain designation of interchangeability as per the FDA firstly a demonstration of biosimilarity is required wherein he product produces same clinical results as the reference product in any given patient and that it doesn’t pose any greater risk (in terms of safety or diminished efficacy) to switch to the biosimilar rather than staying on the reference. Post being granted the interchangeable status, pharmacy-level substitution can take place (as governed under applicable state laws).
In May 2017 Pfizer conducted an internal survey in 82 countries to assess pharmacy mediated substitution and found that it only occurs in 22% of the countries. In Europe, North America and the Asia-Pacific region, many countries have developed specific policies on the subject; however in Latin America, Africa and the Middle East to a major extent no policies were in place to address the same. It was noted that countries looking to develop such policies need to establish legal frameworks, check for grant of interchangeability status, devise and incorporate a robust Pharmaco-Vigilance system and provide means for keeping both Doctors and patients updated with the latest information. These criteria were also found to be consistent with the International Federation of Pharmaceutical Manufacturers Associations (IFPMA) position as well.
Other Factors: Pricing
Pharmaceutical Pricing and Reimbursement Information (PPRI) network completed a survey relating to the biosimilar pricing in EU countries. It emerged that most European countries employed the pricing method of setting their biosimilar prices at a defined percentage below the reference product price. Though generic drug have long been a part of hospital tenders, biosimilars have been a recent addition to the list and have hardly been applied to outpatient sector. Substitution is also an uncommon phenomenon and has been seen only is few Central and Eastern Europe countries.
Meanwhile in US here has been a slow uptake of the biosimilars owing to pricing, legal and aggressive promotion tactics by innovators and lack of confidence in biosimilars. Pricing and availability were also reported to be the leading cause of sluggish growth of Zarxio and Inflectra initially in the US market. In Feb 2018, Council of Economic Advisers (CEA), an executive office of the President of the US released a report which outlines various changes in policies targeted at reducing the prices which essentially includes changes to the Medicare and Medicaid programmes and recommends payers to share the savings from drug rebates more directly with patients. However many remain skeptical on whether it will make any actual impact on the prices. According to Pharmaceutical Care Management Association, representing the pharmacy benefit managers, who argue that the proposal would effectually end up raising premiums for all seniors, benefit only a meager 10% who use select drugs, and be completely futile for low-income seniors, who already pay no cost sharing in Medicare Part D. Also payers who have a preference for innovator brands for cost or clinical reason have so far no established policy on Biosimilars. In the next 5 years there will be visibility on whether payers allow equal access to biosimilar and innovator products or give preference to biosimilars through formulary tiering and restrictions to promote usage in new patients and switching in existing patient base
Other Factors: Awareness
Many have identified that one of the key components for biosimilar success is stakeholder education, primarily the healthcare providers. In the last year we have observed that the regulatory agencies have been making an effort towards active promotion of biosimilar awareness among Doctors. During the 3rd biosimilar workshop by European Commission’s a biosimilar information guidebook was launched which was directed at boosting trust and building confidence in biosimilar use. U.S Doctors have also been requesting more clinical data to overcome their concerns about safety, immunogenicity and efficacy. Also patient advocacy groups such as Patients for Biologics Safety & Access (PBSA) have been demanding FDA to make changes in their site in order to provide more complete and robust policy and clinical elements which enables better patient understanding
