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Niall Dinwoodie is head of product characterization, biopharmaceutical services, at Charles River
Despite their difficult approval pathway, biobetters offer the potential for innovation and decreased healthcare costs.
The development of biological products is now a mature industry and, as befits a mature population, the next generation of products is starting to appear. This next generation fits loosely into the category of follow-on biologics, a title that covers various products that are copies, near-copies, or improvements of original biologic products (see Figure 1). Within this group there appear to be both easy wins and challenging approaches that will require great effort to bring a product to market. However, a detailed analysis of the costs and benefits of follow-on biologics shows how increased investment in development can offer a better marketing opportunity.
Figure 1: Follow-on biologics fall into the biosimilar (highly similar), imitator, or biobetter classes. Within biosimilars, there is a subset of products that can be substituted for the originator product (i.e., they are interchangeable).
On Mar. 23, 2010, the Biologics Price Competition and Innovation Act (BPCA) became law in the US, the world's single largest pharmaceutical market. As a result of this act, FDA is developing mechanisms for the approval of products known as biosimilars that may be considered "highly similar" to and "interchangeable" with authorized biologics that have lost market protection (see sidebar "Product Protection"). There is a vital distinction between these classes; not all highly similar products will be "interchangeable," but all "interchangeable" products are "highly similar" to the product cited in their application. An interchangeable follow-on biologic can be substituted for the original product by a pharmacist, thus increasing potential market usage. A product that is similar is deemed to have the same clinical effect but must be prescribed in its own right. This distinction is necessary because of the complexity of biological products, the potential for different immune responses, and other side effects which are extremely difficult to characterize through analytical methods or in vivo testing. In other strongly regulated markets such as Europe, Australia, Canada, and Japan, the same principles have been enacted for some time (1–4). The European market, in particular, has extensive experience with the two-tier approach to similarity.
While markets with strong regulatory oversight have been struggling with the definitions and approval routes for biosimilars, markets that are not as well-regulated have seen the introduction of imitator products. These products are intended to mimic originator products, but because of differences in quality and composition, they cannot, in general, be considered similar to the originator (5). Any claim of high similarity by many of these products is likely to be disputed by the more regulated markets (6).
The final class of follow-on biologics is not intended to be similar to the original products; it is are intended to be better. Biobetters, also known as biosuperiors, are improvements on original biological products that provide enhanced safety, efficacy, or dosing regime. As a result of chemical modification, protein fusion, altered amino acid sequence, or humanization of the glycosylation pattern (see Table I), the biobetter aims for the same target as the original biological, but has its effect on that target for a longer period of time, typically at lower doses and with fewer side effects. To license a biobetter, existing regulatory pathways for a new product must be followed. That is, a unique portfolio of quality, safety, and clinical efficacy data must be generated.
Table I: Routes to biobetters and their supporters.
The development costs of a biosimilar product that meets the requirements of a strongly regulated market have been estimated by those developing such products to be $75–250 million and by the Federal Trade Commission to be $100–200 million (7,8). When considering the global registration of a biosimilar, one variable still to be assessed in these estimates is whether clinical trials will be required in each regulatory market. At present, the EMA has requested testing against a locally approved, European-labeled reference product and there are signs that FDA will require testing against a US-approved and labeled reference product. Duplication of the pivotal clinical trials is thus a possibility. In the US, the extent of data required to prove that a product is "interchangeable" is undefined, but it can be expected to be significantly greater than the requirements for a claim of "highly similar" to the reference product. With this high entry cost, a biosimilar will only be a viable prospect when the potential sales of that product exceed $250 million per year (9).
Data from European experience with biosimilars can be examined to investigate the probable returns on the level of investment needed to bring a biosimilar to market. In Europe, a biosimilar is approved through the central process common to all member states, then each country decides whether the product may be substituted for the reference product and at what level that substitution may occur. Table II provides data for biosimilar market penetration in Europe, by country, in the second quarter of 2009. At this time, biosimilar human growth hormones (HGH) had been approved for three years, biosimilar epoetins (EPO) for two years, and biosimilar filgrastims (G-CSF) for less than nine months.
Table II: Market share value for biosimilars in Europe (10). HGF is human growth hormone, EPO is epoetin, and G-CSF is granulocyte colony stimulating factor.
The relatively high penetration of G-CSF in a short period of time suggests that increased familiarity with biosimilars in the European market is improving uptake, but it could also reflect differing substitution concerns. What is noticeable is that the originator product maintains a significant market share in the face of biosimilar competition. There is no evidence of the dramatic erosion of sales seen in the patent cliffs of small-molecule originators.
The second part of the picture for biosimilar sales is the number of entrants to the market and the period over which they launch products. With no equivalent of the Waxman–Hatch 180-day exclusivity period for the first generic competitor, the European experience has been that several biosimilar products enter the market at the same time. While this has in part been influenced by the timing of the development of the European biosimilar guidelines, the situation is likely to be mimicked in the US as guidelines are issued or market exclusivity or patent periods expire. Figure 2 shows the situation in Germany following the approval of the EPO biosimilars Binocrit and Mircera on Sept. 28, 2007, and Silapo and Retacrit on Dec. 18, 2007. Although overall sales value for biosimilar EPO products has increased since 2008, the split between the manufacturers has been maintained.
Figure 2: Epoetin (EPO) sales in Germany following approval of the first biosimilars (data, ref. 11).
Based on a European market of approximately $600 million for EPO, extrapolation of these figures would likely give a biosimilar uptake of $185 million, with the single biggest seller obtaining European sales of $100 million. These figures are theoretical; for an example of real sales figures, Sandoz, which has been the leader in the biosimlar business since launching Omnitrope (HGH) in Europe in 2006 and in the US in 2007, achieved combined global sales of the biosimilars Omnitrope, Binocrit (EPO), and Zarzio (G-CSF) of $185 million in 2010 (12).
The key factor in these calculations is the uptake per country, which is governed by the substitution policy. Including the potential US market, which is approximately 1.5 times that of Europe, achieving a sales target of $250 million per year for a biosimilar will only be possible if a product is granted interchangeable status with the originator in the US market. The requirements for interchangeable status have yet to be set but they can be expected to be very challenging.
In contrast to the regulations for biosimilars, the route to approval for a biobetter is clear. A full biological licence application (BLA) will be required in the US, and the equivalent procedure will be required in other markets. The cost of bringing a new product through the BLA process has been estimated at $1.24 billion (13). This figure, however, incorporates a 30% success rate for molecules entering the process. With biobetters, it is arguable that the success rate will be significantly higher because the target and efficacy of the originator product are known. Thus, failures during the development period will be due to unwanted side effects, as opposed to lack of efficacy. The average development costs for a biobetter will therefore be closer to the estimated direct costs for a single product of $375 million.
As each modified molecule progresses through the development process, more is learned about the effect of the modifications, and this knowledge can then be applied to the design of studies to test subsequent molecules. As a result, companies can further improve success rates by developing platform technologies. Using consistent platforms also reduces manufacturing design costs and can simplify the analytical characterization program. A typical example of the platform approach is the carboxy terminal peptide attachment developed by Washington University in St Louis, MO. Merck brought a follicle-stimulating hormone (FSH) modified in this way to the European market as Elonva. Prolor Biotech is using the technology as well, to develop modified HGH (Phase I completed), Interferon (preclinical), Factors VII and IX (preclinical), EPO (preclinical) and other therapeutic peptides. The platform approach is also readily applicable to antibodies. MedImmune and Xencor are among those modifying amino acid sequences in the Fc domain to develop biobetter versions of existing monoclonal treatments.
Platform approaches also allow smaller companies to enter the market. By developing and protecting the technology of the modification, such companies can enter partnerships with larger organizations that have the necessary production, distribution, and sales capability, rather than funding the full development package themselves.
If the costs of bringing a biobetter to market are two- to fourfold higher than those of a biosimilar, what are the advantages? The most obvious is that the product will be new, and therefore subject to 12 years of market exclusivity in the US. In Europe and other markets, exclusivity is more closely aligned with patent protection. The data from the European experience of biosimilar competition presented above suggest that biosimilar competition will be weak, and thus a long period of exclusivity may not be as necessary for profit generation as would be expected. The benefits to the license holder will be earned by the nature of the product; its improved characteristics must be used to attract patients and increase sales. While the biosimilar aims to take market share by being slightly cheaper than the originator, the biobetter has to gain market share on merit alone. Sales presentation of a newly approved biobetter will thus extol the benefits of the product rather than relying on price alone to drive business.
What are the potential benefits to patients? The main intention of the BPCIA was to drive down costs of biologics to the healthcare system, recognizing that biologics will form an increasing component of the drug expenditures and have high relative treatment costs compared with traditional small molecules. The Federal Trade Commission report estimated that the introduction of biosimilars represented a potential savings of 10%–30% (8). Given the European experience of biosimilar uptake and the effect of biosimilar introduction on originator price, the overall impact on the drugs bill for a particular indication where biosimilar treatment becomes available is likely to be a 10–20% reduction (8).
A biobetter will command a premium price for its improved characteristics, but the improved dosing regimes common to such products can result in significant cost savings for the treatment of a particular indication. For example, based on the treatment used in a pivotal trial for Neulasta—an Amgen biobetter version of their own Neupogen—a single treatment cycle costs $3400 for Neulasta and $6000 for Neupogen, despite the unit prices being $3400 and approximately $300 (body weight dependent), respectively (14). The biobetter in this case represents a 40% reduction in overall costs for the healthcare provider.
The global biologic market will grow—of that we can be certain—but what form will the market take? Globally, imitator products will continue to generate significant sales volume, if not value, in the less regulated markets. Some manufacturers of these products may be able to develop sufficiently detailed quality, safety, and efficacy data packages to convert the imitator to biosimilar status in the regulated markets. With established production facilities and sales generated from the imitator product, the additional investment to bring the product up to biosimilar status may be justified by the returns from biosimilar sales. Direct entry to the regulated markets as a biosimilar is less likely to be economically viable.
Biobetters offer the opportunity to establish brand-to-brand competition within treatment indications. Where in the past the identification of a mode of action has prompted the generation of multiple analogues, or "me-too" products, such as Lipitor, Crestor, Zocor, and Lipostat in the statin market, the identification of a target receptor by the originator product will spur the creation of biobetters. With many possible routes of modification, several companies will be able to target the same indication with novel products and thus create competition within the market.
New targets will continue to be identified, and the first product to be marketed for an indication may be more sophisticated than a simple copy of the natural human protein. As platform technologies are established, partnerships between innovators and the owners of the platforms will grow.
The follow-on biologics area appears crowded with product divisions dependent on what seem to be slightly different regulatory definitions. Much attention has gone to biosimilars as the class with the potential to reduce healthcare costs through increased competition. With the experience gained from the introduction of these products in Europe and the conservative approach to regulation in the US, it is unlikely that biosimilars will meet this hope. However, biobetters represent an opportunity to be innovative with reduced risk and increased sales for the manufacturer while improving the treatment of patients and reducing healthcare costs. Why be similar, when you can be better?
Niall Dinwoodie is head of product characterization, Charles River, Edinburgh, UK, firstname.lastname@example.org.
1. EC Directive 2004/27/EC, amending Directive 2001/83/EC The Community Code Relating to Medicinal Products for Human Use (Brussels, March 2004).
2. TGA News, 57, November 2009.
3. Health Canada, Guidance for Sponsors: Information and Submission Requirements for Subsequent Entry Biologics (Ottowa, March 2010).
4. MHLW, Guideline for the Quality, Safety and Effectiveness of Biosimilar Products (in Japanese) wwwhourei.mhlw.go.jp/hourei/doc/tsuchi/2005I210304007.pdf.
5. H. Schelleckens, Eur. J. Hosp. Pharm. 10, 243–247 (2004).
6. EMA, "Questions and Answers on the Withdrawl of the Marketing Authorization for Insulin Human Rapid Marvel, Insulin Human Long Marvel and Insulin Human 30/70 Mix Marvel" (London, 2008).
7. M. McCamish and G. Woollett, mAbs 3 (2), 212–220 (2011).
8. Federal Trade Commission, "Emerging Health Care Issues: Follow-on Biologic Drug Competition" (Washington, DC, June 2009).
9. J. Woodcock et al., Nat. Rev. Drug Disc. 6, 437–442 (2007).
10. A. Sheppard, Pharm. Tech. 22 (9), 72–74 (2010).
11. H Teissel, presentation at Sandoz Day Investors Event (September, 2008).
12. Novartis Q4/full year 2010 results, January 2011.
13. H. Grabowski, Nat. Rev. Drug Disc. 7, 479 (2008).
14. M.D. Green et al., Ann. Oncol. 14, 29–35 (2003).