I have more than a few thoughts about biosimilars, but will provide a more extensive version of my views at a later date. For now, I would like to point to two significant new developments in the biosimilars field, both in the news this week. In the first, the FDA released a Draft Guidance that provides more details of the Agency's approach to the nitty gritty of the clinical testing of investigational biosimilar products.1 In the second major biosimilar news of the week, Samsung (yes, Samsung the Korean electronics giant) announced that it is committing at least $2 billion dollars to developing biopharmaceuticals through two separate efforts. In one venture, "Samsung Bioepis" is partnering with Biogen Idec to develop biopharmaceuticals including biosimilar versions of Roche's Herceptin anti-cancer antibody as well Sanofi's Lantus diabetes drug.2 In Samsung's other biologics effort, Samsung Biologics will work with Quintiles, the global contract research organization (CRO), to develop biologics for Roche and Bristol Meyers Squibb. I believe that taken together these two events, the FDA's emerging regulatory requirements and Samsung's commitment to biologics and particularly biosimilars, underscore the two very different kinds of risk that confront entrants into the biosimilars field. The first risk, which is reflected in the FDA's Draft Guidance, is the scientific/regulatory risk that is entirely a function of the developing science of protein production and analysis. The second risk, which is reflected in Samsung's partnerships with Biogen Idec, Roche, and Bristol Meyers Squibb, is the market risk, which is a function of the difficulties of competing both against the original "reference" biologic as well as the other entrants into the biosimilars field. I am willing to stick my neck out on this issue and say that, in my view, it is this second risk that is more significant.
Let me explain why I believe the marketplace risk, or at least marketplace uncertainty, is greater than the scientific/regulatory risk of failing to achieve FDA approval to market a biosimilar drug. There has been a great deal written about the difficulty, or even impossibility, of creating a second biologic that is an exact duplicate of a reference biologic, regardless of whether the reference biologic is a signaling protein, such as erythropoeitin, IL-2, interferon-beta, and alpha interferon, or a therapeutic antibody, such as Rituxan, Avastin, Herceptin, and Humira. Leaving aside the question of whether or not perfect duplication with 100% confidence is indeed impossible, there is good reason to believe that functionally acceptable working copies of those proteins can be made with only a small chance of outright failure. The ability to engineer proteins (including the humanization of antibodies), assay their affinity for their pharmacological target, and produce therapeutic biologics has come a long way. In Europe, where biosimilars have been allowed for some time, as of 2011 there had been 14 biosimilars approved and one that was rejected for reasons relating to quality control, characterization, or manufacturing issues, with another application withdrawn.3 That success ratio has continued, and it is in marked contrast to the risks faced in developing new chemical entities as drugs. There are numerous extremely good university labs which could, for a few million dollars (on the high side), perform the contract research necessary to deliver a cell-line that would produce a very good version of a reference protein or antibody. Samsung has already partnered with Quintiles to do the clinical/regulatory development necessary to take a product through biosimilar approval. GMP (good manufacturing practice) contract biologics manufacturing is an existing and expandable resource. Nothing is absolutely certain, but the risk of outright scientific/technological failure is not very high.
While biosimilar approvals have been reasonably forthcoming in Europe, market share has been very slow to build, which is why I have taken the position here that the risk of the marketplace is actually more significant than the scientific regulatory risk. Biosimilars may not be freely substituted for the reference drug at the pharmacy, unlike generics of small molecule drugs. This means that, for the most part, biosimilar adoption requires marketing to physicians, just as brand name drugs are marketed, in an effort to persuade doctors to prescribe the biosimilar in place of a reference drug that the doctors have presumably been satisfied with and that is working in the doctors' patients. That is why a 2013 study by the European Commission’s (EC) Enterprise and Industry Directorate-General found that biosimilars only accounted for an 11% market share.4 However, that market share varied widely between countries, with Germany and Greece using the power of their national health authorities to boost biosimilar adoption to far higher levels than in the rest of Western Europe.
In fact, the high rate of adoption of biosimilars in Germany and Greece points the way to the real solution to biosimilar development (and pricing). My former colleagues, Brian A. Liang and Timothy Mackey, recently coauthored an article entitled Public-Private Partnerships to Promote Biosimilar Access, Affordability, and Patient Safety in Emerging Markets online in the Stanford Journal of Law, Science & Policy (April 2014). In their article Liang and Mackey propose that biopharmaceutical companies work with the national authorities in developing countries in order to ensure that patients in those countries have affordable access to needed biologics. I heartily endorse Liang and Mackey's proposal; however, I would suggest that entirely different public-private partnerships might well be needed to encourage the development of much lower cost biosimilars in developed countries, such as the U.K. and France. If I am correct in my assertion that marketshare is a more significant risk than the scientific and regulatory challenge of developing a biosimilar, then the answer is to greatly reduce, or even eliminate, much of the market risk. That is actually something that the National Health Service both can and must do if citizens in the U.K., for example, are to have expanded access to biosimilar drugs with ever tighter budgets. If the U.K.'s National Health Service were to actually put out an RFP for the development of an anti-TNF antibody, for example, how low would the price go? Could a lab at Cambridge or Oxford produce a lead cell line? Could Quintiles or Paraxel manage the clinical and regulatory development? Could Wacker Chemie AG, for example, manage the contract manufacturing and scale up? If Samsung or another lead partner had complete confidence that, at the end of the day, success in the U.K. marketplace were guaranteed, the bidding would be very interesting indeed.
So we can and should accelerate the development and usage of biosimilars by taking the marketplace risk out of the equation. The NHS and other national health systems in Europe can lead the way. It would take the market risk out of biosimilar development and potentially produce much greater savings in the biosimilars marketplace. One small step for pharmaceutical policy and a lengthy stride for health care cost reduction.
1 FDA, Clinical Pharmacology Data to Support a Demonstration of Biosimilarity to a Reference Product: Draft Guidance, May 2104, available at http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM397017.pdf.
2 BioSpectrum, Electronics giant enters the Pharma market, May 12, 2014, available at http://www.biospectrumasia.com/biospectrum/news/214601/electronics-giant-enters-pharma-market#.U3fySl6ukYQ . Yiddish speakers may find the name Bioepis ironic and amusing.
3B.S. Sekhon and V. Saluja, Biosimilars: an Overview (2011) available at http://www.dovepress.com/biosimilars-an-overview-peer-reviewed-article-BS
4Use of Biosimilars in Europe, posted on 10/05/2013 in Generics and Biosimilars Initiative, available at http://www.gabionline.net/Reports/Use-of-biosimilars-in-Europe.