Biologics currently make up half of the pharmacological market for oncology, but the steep cost of these drugs is a barrier to access globally.
In 3 years’ time, patents on nearly 20 oncology biologics will expire, which is likely to result in the launch of biosimilars offering reduced prices. In the past, the biosimilars market was focused in Europe and the US. However, biosimilars have recently begun to emerge in countries with existing biopharmaceutical infrastructure and companies.
In Asia, pharmaceutical manufacturers which have traditionally focussed on generics are joining the fray, motivated by advantageous global and local regulations, an influx of investments, a culture of innovation and government support. Celltrion has become the first company from the Asia Pacific region to successfully gain regulatory approval in both Europe and the US, with infliximab, a monoclonal antibody. There are now signs of strong intent from other companies located in Asia to bring biosimilars into Western markets (US, EU, and Canada) which are potentially profitable markets with several patents expiring or close to expiry for originator biologics.
Regulatory and payer support
Several Asian countries are accelerating the development of biosimilars. Whilst these do not enjoy patent protection, there are regulations which demand a period of exclusivity in marketing to ensure a return is guaranteed:
South Korea currently leads the pack, having allocated 35% of its medical research budget in 2012 to aid local pharma companies in this goal. On top of capital and generous tax breaks, the government also provides regulatory guidance to local biosimilars companies, and has set an ambitious goal of providing 22% of global biosimilars in 2020.
Efforts to balance drug access and costs through public health schemes seen in China and Vietnam have allowed biosimilars to enter the public healthcare systems, resulting in 60% and 38% market uptake respectively.
Asia-based companies have also benefited from a lower cost base relative to their western counterparts, including lower biosimilar development costs, lower capital expenditure for manufacturing facilities and labour. In China, a regulatory change permitting pharmaceutical companies to outsource manufacturing to contract manufacturing organisations (CMOs) (common in other parts of the world) has brought new opportunities for biotechs to concentrate on innovative drug development without heavy infrastructure investment. This change allowed WuXi to open the world’s largest biologics manufacturing facility providing contract services for both Chinese and international pharmaceutical companies.
There are a number of challenges manufacturers of biosimilars still have to face, namely:
Interchangeability and substitution
Biosimilars offer a similar clinical outcome as their reference counterparts at a lower price, but it is crucial to note that this has yet to be fully recognised in the US, which limits their uptake. Potential differences between biologics and biosimilars have led to global regulatory concerns about drug interchangeability and substitution, which has also hindered uptake in the EU.
This is a major concern for physicians familiar with biosimilars. Several peer-reviewed journals acknowledged that small changes in the structure of the biologic or a different route of administration could increase the risk of adverse events.
Awareness and perception
In Asia, brand perception is often equated with quality. Both physicians and patients show a strong preference for branded drugs, despite the lower cost and proven efficacy of unbranded generics.
This includes identifying cases for preferential use of biologics in core patient segments and indications for which the biosimilar has not been tested. Collaborating with physician and patient groups (patient access programmes, strategic pricing schemes) to gain advocates also affects biosimilar adoption.
How to win
We would recommend the following strategies for Asia manufacturers looking to win with biosimilars:
1. Time your entry with the right portfolio
A combination of regulatory and patent trends resulting in a delay in launch dates have created scenarios where multiple players enter the market for the same drug at the same time, increasing competition for government tenders. Consequently, ensure effective targeting when deciding choice of product portfolio in biosimilars. Think about which therapeutic areas have the highest unmet needs both regionally and locally. Consider the selection criteria set by drug and therapy committees, taking into account both clinical value and cost effectiveness in the real-world setting.
2. Create an agile go-to-market strategy
Consider partnering with other companies to capture opportunities and reduce risks when expanding your presence in the developed countries. This is often how biosimilars were first launched in APAC. For instance, Mylan struck up a successful partnership with Biocon, an Indian biopharmaceutical company to form an exclusive collaboration to manufacture, supply and commercialise multiple, high-value generic biologic compounds for the global marketplacee. Biocon lacks commercialisation experience and payer familiarity, but Mylan was able to provide these while leveraging Biocon’s manufacturing knowledge and capabilities in a lower-cost market.
3. Expand the prescriber base
Invest in building awareness and in physician and patient education. This is critical to grow the number of prescribers and drive higher volumes of prescriptions. Patients rely on reassurance from their doctors on efficacy and safety of their medicines, and are also actively looking for ways to reduce out-of-pocket expenses. Providing real world data to help physicians understand the broader value biosimilars have in increasing patient access to critical treatments could also prove beneficial.
Whilst there are a vast number of potential gains from launching biosimilars, winning in this area is not an easy feat. It is important to know and play to your organisation’s particular strengths. Whether through acquisition or partnership that gives you diversification and access to developed markets, you need to craft a strategy that addresses the specific challenges of your target markets, using the lessons learned from predecessors.