Biosimilar drugs to gain greater priority as decade progresses
This is a guest post from Keith Bradbury, Executive Director of Drug Information at Medco Health Solutions, Inc.
Biosimilar drugs to gain greater priority as decade progresses
The Patient Protection and Affordable Care Act will heighten the degree of competition in the field of biotech drugs, a fast growing area of drug therapy that is accounting for a larger portion of drug spending. The law creates a pathway for biosimilars, which are comparable versions of biologics and are also known as “follow on biologics,” to enter the marketplace. These medicines could create a wave of lower cost competition in the biotech industry starting in 2013, leading to savings by as much as 30 percent for some of the costliest drugs.
Biologic and recombinant drugs have been instrumental in treating a variety of conditions such as cancer, diabetes, immune deficiency, metabolic disorders, and autoimmune conditions, as well as rare medical conditions such as Pompe disease, Fabry disease and Gaucher disease. The difficulty making these drugs, the absence of competition and small patient populations in which some of these drugs are used has made biologics among the most expensive drugs currently prescribed, ranging from $6,000 to more than $400,000 annually.
The Congressional Budget Office had projected $25 billion in total savings from biosimilars between 2009 and 2018. Others have estimated substantially larger savings. For employers, health plans and patients, this could represent substantial relief from the double digit growth rates of specialty drug spending. According to Medco Health Solution’s 2010 Drug Trend Report, spending on specialty drugs, a group of drugs that is mostly recombinant proteins, represented 5.6 percent of overall prescription costs in 2003, but by 2009, the figure had soared to 14.2 percent.
Biosimilars will have to undergo analytical studies to demonstrate that they’re “highly similar to the reference product notwithstanding minor differences in clinically inactive components.” The biosimilar must utilize the “same mechanisms of action” and follow the same prescribing instructions and indications as the original product. In other words, there can be no clinically meaningful differences between the biosimilar and the reference product in regards to safety, purity, and potency. The FDA will determine the level of clinical studies needed for biosimilar drugs to gain approval, but some will likely be needed. Also, cross-over studies will be needed to allow a determination of interchangeability.
There are significant protections for the makers of the original product. The law provides reference product biologic manufacturers 12 years of exclusivity for data used in the submission, starting from the date of FDA approval. That data is a necessary part of any filing for a biosimilar to gain approval under the pathway.
The marketplace for biosimilar drugs is likely to be competitive with some leading pharmaceutical makers – namely Eli Lilly, AstraZeneca, and Merck & Co. – entering the area. But biosimilars are not likely to be a significant force in the marketplace until 2014 or 2015.
The drug categories where we’re likely to see significant competition include the following:
- Human growth hormones are likely to be among the first to face increased biosimilar competition, since they were among the first recombinant proteins to appear in the marketplace.
- Recombinant insulins and modified recombinant insulins, such as Humulin and Novolin, are apt to be early follow-on biologics, since the reference drugs’ patents have long expired. These insulins should be relatively easily to replicate and biosimilar versions of these drugs could be introduced between 2013-2015. However, as much of the insulin use has switched to modified recombinant insulins, this may not be a large opportunity.
- Follow-on versions of epoetin alfa, which has been sold under the brand names Epogen® and Procrit® to treat patients with kidney disease or chemotherapy-induced anemia, can have a significant effect upon specialty drug spending. However, it is not clear if cardiovascular safety data will be needed for follow-on versions of these drugs.
- Leukine® (sagramostim), a treatment to prevent opportunistic infections, could face follow-on competition in 2014.
- Drugs to combat neutropenia are already facing challenges to patents with Teva’s Tevagrastim seeking to compete against Neupogen® (filgrastim), which has a patent expiration in 2013.
- Interferon-alfa based treatments were among the first biologic drugs to reach the marketplace and have found uses treating leukemia, cancer, genital warts, hepatitis and multiple sclerosis. Many patents governing these drugs have long expired. Some of the pegylated versions of interferon drugs, such as Peg-Intron (peginterferon alfa-2b) or Pegasys (peginterferon alfa-2a), gained significant extra time on their patents because the reformulation creates a different molecule that improves the efficacy of treatment.
- Rheumatoid arthritis treatments and other biologics for autoimmune disorders are among the fastest growing drug categories, but this group is not likely to face a biosimilar competition until 2014 or 2015.
Later this decade, many treatments that gained FDA marketing approval from the year 2000 on may face greater competition from biosimilars, as well as new treatments under development. Herceptin® (trastuzumab), Avastin® (bevacizumab), Erbitux® (cetuximab) will be vulnerable to competition in the later second half of the decade, as well as some of the priciest drugs for rare enzyme disorders.
This new regulatory pathway for biosimilars could be a catalyst to greater competition in the biotechnology industry, much like the introduction of generic drugs under the Hatch-Waxman Act spurred competition among traditional small molecule drugs. Many of today’s blockbuster drugs emerged as manufacturers had to replace old revenue sources with new products. Although biosimilars are not exactly like the original products, the prospect of competition could drive the biotech industry to deliver new medicines that further improve the quality of patient care.
About the author: Keith Bradbury is Executive Director of Drug Information at Medco Health Solutions, where he has been employed for the past 14 years. Bradbury has more than 30 years experience in hospital pharmacy, managing pharmacy benefits for health plans, drug information services, developing drug formularies, and managing pharmaceutical benefits provided by a large PBM.
Bradbury also oversees Medco’s new drug pipeline management process, and is the lead author for the drug forecast section of the Medco Annual Drug Trend Report.
Mr. Bradbury makes some excellent points in this post. One of the emerging trends that I write about in my recent book, Get to Market Now! Turn FDA Compliance into a Competitive Edge in the Era of Personalized Medicine, is the increasing role in drug approval being played by reimbursement agencies such as CMS, NICE, and CHMP.
The way this influence plays out is not always obvious, so let me share a story from one of my current clients that may help illuminate this:
My client is working on a new biosimilar for a drug currently on the market. The drug happens to have an orphan designation and no current competition. In meetings with FDA officials, two points have come up:
1. FDA officials are eager for my client to submit their biosimilar for approval, and
2. Because in conversations FDA officials have had with their colleagues in CMS and throughout HHS, their is widespread internal HHS belief that the currently approved drug is vastly too expensive with the manufacturer taking advantage of their sole supplier position. Thus the desire for more competition.
Product development executives, regulatory affairs directors, and quality management personnel who ignore the financial realities facing the industry and the regulators do so at their own peril. Widespread adoption and approval of biosimilars is simply a natural result of the escalating need to contain healthcare costs. Combine this with a global, cultural reliance upon and expectation of constantly technology, scientific know-how, and innovation, and you have a rising global expectation for more and more biosimilars.
Executives must tackle this head-on throughout their development and commercialization efforts, from pre-clinical through postmarket surveillance. Adoption of any of the 100+ tactics and strategies in my book can help; and certainly, as reviewers have pointed out, biopharma firms that adopt all the tactics and strategies will have the blueprint for a successful and compliant future.
While critics of biosimilars point out risks – no doubt, in some cases, rightly so – companies that fail to adapt their new product development efforts to the increasingly competitive biopharma landscape of the next decade will only cause their bottom line…and their prospective patients…to suffer.
Me and my colleagues authored one of India’s most extensive reports on Biosimilars. Drop me a mail if you are interested in a copy. My email is [email protected].
Some of the topics we included are:
– Market Trends
– Growth Drivers
– Regulatory Bodies and Framework
– Major Players.
-Etc.
We interviewed over 200 individuals and firms to collect the data in what we believe is one of the most detailed study on the subject in India.
Nayan
[email protected]