Biosimilars are the next money makers of pharma industry

It has happened to everyone: got sick, went to the doctor, got diagnosed and received that desired white piece of paper named “drug prescription”. We run to the drugstore and just ask straight ahead for what has been prescribed. Until recently not many options regarding price of the drug or effect were available, but now some alternatives are there for us.

GENERIC DRUGS are one alternative. They are copies of brand-name drugs, and by ‘copies’ I mean in dosage, safety, strength, route of administration, quality, performance, characteristics and intended use. They have the exact same ‘active component’ of the brand name drug, which is the part that has the therapeutic function, while the ‘inactive components” which in general do not have any pharmacological effect can be different, and they can include dyes, preservatives, flavouring agents, etc.

Generic drugs are important options that allow greater access to health care… why?? BECAUSE THEY ARE WAY CHEAPER THAN BRAND NAME DRUGS. The latter are developed under a patent, which protect a drug company’s investment in developing the drug. This gives the company EXCLUSIVE RIGHTS to sell the drug while the patent is in effect for up to 17 years. After the patent expires, other drug companies can produce the drug. But generic drugs are able to be sold for lower prices because they are not required to repeat the costly clinical trials of new drugs and generally do not pay for costly advertising and marketing. In addition, multiple generic companies are often approved to market a single product; this creates competition in the market place often resulting in lower prices. Good for us consumers. (Story not told, is that 70 to 80% of all generic drugs are produced by the same companies who make brand name drugs… obviously).

BIOSIMILARS, the new kid on the block, are another alternative. They are biological products (not chemicals such as brand name and generic drugs) highly similar to brand name drugs with no clinically meaningful differences in terms of safety and effectiveness from the reference product. Only minor differences in clinically inactive components are allowable in biosimilar products. They also differ from ‘generics’ in that THEY ARE NOT EXACT COPIES of brand name drugs.

Producing generic small-molecule drugs is relatively simple–it’s like following a recipe with standard ingredients. Biosimilars are much more challenging because living cells (where they are produced) are highly sensitive to their environments, and manufacturers have to create their own, unique process to make these cells to produce an identical outcome to an existing treatment.

Biosimilars have made drug approvals challenging. Generics are approved based on matching chemical structure, but that doesn’t work for biosimilars. Each new biosimilar has to run clinical trials to prove the outcome matches that of the biologic it is imitating, even though it looks structurally different, according to recently announced guidelines from the Food and Drug Administration.

Let’s talk about money

When talking about Pharma business there is a lot of money involved and the opportunities for biosimilars are huge for both manufacturers and consumers. Many leading biologic medicines worth more than $81 billion global annual sales will lose their patent protections by 2020… only 4 more years, that means the war between pharma companies has begun.

Much like generics, biosimilars can help cut drug costs, though the savings are smaller because of their complexity as well as regulatory challenges of getting FDA approvals. Biosimilars cost about $75 million to $250 million to reach the approval stage, versus around $2 million to $3 million for a generic small-molecule medicine.

So far, an inflexion point in the pharmaceutical industry has been seen with the approval of two biosimilars: the Hospira’s biosimilar version of infliximab (a monoclonal antibody used to treat autoimmune diseases) in Europe and the subsequent approval in the U.S. of its first biosimilar in history, Novartis’ Zarxio (which targets Amgen’s Neupogen).

In September 2015, Pfizer  shelled out big bucks–$17 billion to be exact–to buy the much smaller drugmaker Hospira. A big reason for the rather expensive acquisition is to gain access to the company’s biosimilar portfolio, an insight on how important these new drugs are becoming for pharma industry.

What can be expected then? Well, that some of the big firms — including Abbvie, Roche and Pfizer — will be highly impacted by how this biosimilar market shapes up in near future. There are around 11 biosimilars under development to compete with Abbvie’s Humira (infliximab competitor) alone, which loses its patent exclusivity in the U.S. in 2016.

Biosimilars are extending to the rest of the world as well. Last month, Brazil registered the first latin-american biosimilar (filgrastim), one of the 20 existing biosimilars to date.

What’s great about these drugs is that many people will definitely benefit as biosimilars take off. Significant savings for medical programs will be seen, since the worldwide trends is that governments are pushing theirselves for granting marketing authorizations for biosimilars…. I hope less money spend in health means more money spent for good purposes for us all tax-payers.