Biosimilars or biobetters?
By: Raymond Huml, MS, DVM, RAC; Nigel Rulewski, MD | July 25, 2017
With patent expirations looming, biologic companies must innovate – or litigate – to protect their market share.
Biologic medicines have transformed the treatment landscape for dozens of chronic and life-threatening diseases -- but that innovation comes at a cost. The tremendous value of these innovative biologics, and the capital required to bring them to market, means they tend to command among the highest prices of any new drug on the market. In 2013 the average daily cost of a biologic in the United States was $45—compared to $2 for small-molecule drugs.
Many of these innovator biologics are nearing their patent expiration, which is spurring new excitement about the growing biosimilars marketplace in the US. Biosimilars, which are highly similar to the originator but come with lower price tags, promise more cost-effective access to valuable drugs.
Not surprisingly, the original biologic developers are less enthused. CVS Pharmacy, UnitedHealth and Express Scripts have already announced that once a biosimilar of an originator biologic is approved, they will no longer stock the originator product.
But they are not giving in without a fight.
Many biologic innovators are working to safeguard the market value of their products by developing enhanced product modifications (aka ‘biobetter’) of the originator. These better, faster cheaper solutions incorporate improvements over the original to prolong the lifecycle of an originator nearing patent expiry and give developers an edge over biosimilar developers. One example is Roche’s Gazyvara, an anti-CD20 monoclonal antibody that has shown superior efficacy in the treatment of chronic lymphocytic leukemia (CLL) compared to the originator MabThera. Gazyvara gained EU marketing authorization for previously untreated CLL in 2014 —before any biosimilar candidates came to market.
While attractive from a scientific perspective, these biobetters may not all find support with health authorities and payers as companies seek to justify their additional expense in light of the incremental benefit. Innovators must factor this risk into their development planning.
Improving on a product formula (another type of “biobetter”) can also extend the value and product lifecycle of an originator while improving quality for patients. For example, Amgen's Neulasta is a long-acting version of Amgen's Neupogen. Both drugs decrease the incidence of infection in chemotherapy patients, but Neulasta is only injected once per treatment cycle vs several times a day with Neupogen.
The delivery mechanism for a drug can also constitute a formulation improvement, as with the subcutaneous formulation for Roche’s Herceptin to replace intravenous infusions. The new mechanism is faster, more convenient and lowers healthcare costs while maintaining pharmacokinetics and efficacy.
Some developers are taking a more practical approach, by simply dropping the price of their innovative biologics and introducing patient assistance programs to mitigate cost differences so they retain their market share.
Experience from the EU has shown such moves can impact prices across an entire product class and potentially the therapeutic area. When the first biosimilars were launched in the EU in 2006, they were priced at a 20-to-30 percent discount compared to the branded product. As the market progressed, innovators dropped their prices in order to retain market share and biosimilar manufacturers have dropped their prices even further—with discounts reaching as deep as 70 percent of the innovator’s price in some cases. It remains to be seen if such deep discounts will be sustainable over the longer term and if such discounts can be replicated across all major markets.
Rather than lose market share to biosimilars, some biologics companies are launching their own biosimilar brands. These products bear brand names different from the original names and have lower prices, but are otherwise the same biologically.
While specific brand name versions for selected markets could potentially address the competition in these markets, this strategy may not be amenable to wider application. Further, these local brands are likely to face the same price competition from biosimilars as the original innovator brand.
To block or delay biosimilars from coming to market, innovators have sued biosimilars manufacturers in several emerging markets, citing insufficient comparability evidence. In other instances they have sued the regulatory agencies that approved such products.
In 2013, Roche filed a lawsuit against Biocon, Mylan and the Drugs Controller General of India (DCGI), questioning if the product was, indeed, a biosimilar. This led to prolonged litigation, a court injunction against the launch of the product, and a later ruling allowing the product to be sold, but preventing it from being labelled as a biosimilar. Biosimilar developers need to be prepared for such litigation, and set aside resources to address these suits if they occur.
The advent of the biosimilars marketplace is shifting the competitive landscape. These examples demonstrate the huge opportunity in the space, while underscoring the fact that innovators won’t give up their competitive advantage easily. This market will continue to drive innovation in the space, and the ultimate beneficiaries will be the patients and prescribers who have increasing numbers of efficacious and safe treatment options to choose from.
Vice President, Global Strategic Drug Development and Head of Global Biosimilars Strategic Planning
Recent thinking: Patents, IP and the biosimilars landscape