Biogenerics are generic forms of biopharmaceuticals. They are generally large protein molecules derived from living cells, as opposed to smaller, chemical molecules derived from a chemical process that can be precisely controlled. For chemical products, proving the essential similarity of the active ingredient and the bioequivalence of the drug to the brand-name product is pretty straightforward, because a small molecule can be precisely characterized.
But proteins are more difficult to characterize than small molecules. And consequently, pharmaceutical regulatory agencies in North America, Europe, Australia and New Zealand have been debating how best to determine bioequivalency or biosimilarity.
Obstacles
Biotech industry argues that because a follow-on manufacturer can never duplicate exactly the innovator's process FDA should apply a very stringent standard to such products and require "all of the preclinical and clinical data needed to support the label being claimed. Also, they are prepared to fight tooth and nail to protect them.
Referring to the issue of bioequivalence, generic manufacturers argue that there was no point in exposing patients to unnecessary clinical trials by duplicating them to win approval for biogenerics. However, bioequivalence testing would have to be decided on a case-by-case basis in a process that would need to be discussed by the industry and regulators. The science is in place and the generic manufaturers are merely waiting for some regulatory clarity.
In the past, EU regulatory authorities have been more flexible than those in the US on biogeneric approval process since 2001. In addition, unlike the US situation, the regulatory framework is the same whether the product is a biological or a chemical.
In the US, early biopharmaceutical products were regulated under standard pharmaceutical legislation under the control of the Center for Drug Evaluation and Research (CDER). These early products were therefore governed by the Food, Drug, and Cosmetics Act and later, Hatch-Waxman. A separate process was then developed for biologicals supervised by the Center for Biologics Evaluation and Research (CBER). Approval for market for most biotechnology drugs is under the Public Health Service Act (PHSA).
In June 2003, the FDA transferred oversight for many new biotechnology therapies from CBER to CDER. The move provided FDA with an opportunity to examine its policy on generics. Much of the debate in the US hinges on whether biogenerics should go through the simplified approval process allowed under section 505(b)(2) NDA. This is a controversial hybrid statutory approval mechanism established by the Hatch-Waxman Amendments to the Drug Price and Competition and Patent Term Restoration Act of 1984. 505(b)(2) was initially drawn up to cover chemistry-based generic pharmaceuticals rather than biologicals.
The FDA has announced that the 505(b)(2) pathway is permissible for approval of 'generic' versions of biological products that were originally approved under an NDA as opposed to a biologics license application (BLA). Many generic companies are advocating a 505(b)(2)-like approach to approval of generic versions of more complex biologics originally approved under BLAs. Such a system might resemble certain aspects of the recent guidance by the EMEA (Directive 2003/63/EC, June 2003).
There are many arguments for and against the proposed moves by the FDA. The complexity and details of a stringent rule-based system such as that seen in the US means that it is always open to legal challenges, which will inevitably delay changes.
The FDA has indicated the direction that it wants to take. Inevitably, it will take longer than hoped, due to the delaying tactics of the Big Pharma lobby.
The European Union laid out a regulatory framework for what a generic manufacturer must do in terms of studies and findings to win approval of its generic biotech drug. This information must include "a full characterization of the molecule as 'biosimilar'." In addition, the company must perform a small study with a specified number of patients. For example, for EPO a company must include 500 patients in order to show biosimilarity, This process takes about one year from application to approval .
This process isn't going to make it all that much easier for follow-on biologics to come on the market. If you're doing a clinical trial, it's not a generic anymore.
For traditional pharmaceuticals, lost patents and expired exclusivity periods provide an incentive for companies to develop new products - an incentive that is missing in the biotech industry; 70% of FDA-approved small molecules have generic counterparts, whereas Epogen/Procrit could have 28 years of exclusivity if its patents do not expire until 2017 - something no small molecule would have.
The stakes are significant for generic manufacturers, who have to make a series of investments to produce biogenerics. Production of biopharmaceuticals remains a relatively complex science. Many argue that subtle differences in the make up of these products, caused for example by slightly different manufacturing processes, and organisms used, place a question mark on their safety. Thus, there is a very real requirement to ensure that the conditions and manufacturing base are correct.
You can analyze the purity of a chemical drug substance with known analytical technology. For the biological products, they tend to be complex mixtures of proteins and other biological substances that are not easily characterized and identified 100 percent.Successful strategies for overcoming some of these manufacturing barriers include:
- Acquiring biopharmaceutical expertise.
- Collaborating to gain access to production technology.
- Gaining production expertise outside the EU
- Moving production facilities inside the EU.
Europe and the US represent the largest markets, with the highest prices and therefore the potential for greater profits. These are consequently becoming the focus of biogeneric manufacturers' plans. Marketing for biotech generics is likely to present different issues than marketing for chemically based generics. That's because if a drug is approved as a biosimilar it can't be directly substituted for the name-brand drug that it is seeking to replace. Instead, the situation is more analogous to "me-too" drugs, where a plan will need to consider which of several similar, competing drugs to include on its formulary.
Once these generic versions of biologics are finally approved, it will mean a different playing field for the companies that produce them. If they're not going to be substituted in Europe or in the U.S., they'll need to compete on price and brand.
Worldwide sales of biological products could reach $50 billion in 2004, representing 10-15% of the total pharmaceutical market. Biologics also represent approximately one-quarter of the total industry's pipeline. Moreover, the top 10 biotech companies have a market share of 84%, versus 51% for the top 10 pharma firms
In order to reach the goal of profitability, biogenerics companies need to find the right strategy.
Major players
In the past few years, the environment for biogeneric companies has changed significantly and consolidation has started. For example, Sicor originally acquired Biotechna UAB, Lithuania; then in late 2003, Teva acquired Sicor. In 2002, Novartis purchased Slovenian generics company Lek, the third largest player in European generics. The number of marketed biogenerics is likely to be limited to four to five initially; but there would be potential for much more development as the market progressed.
There seems some consensus that the main biogenerics companies in Europe will be Novartis, Pliva, Teva, BioPartners and possibly BioGeneriX. In the US, the main contenders are likely to be Cangene and Transkaryotic Therapies. Companies which are beginning to identify themselves as protein manufacturers such as GeneMedix may not be successful on their own; they may be too small and will need to partner to remain in the competition. There is also the question as to whether any of the Indian companies, such as Wockhardt and Ranbaxy, will be successful in penetrating Western markets with biogenerics.
The first companies will take time to gain entry to the market; but once this has happened, the biogenerics market will evolve more rapidly. The biogenerics market will be different from the generics market. There will be fewer players due to consolidation brought about by complex manufacturing processes, difficulties in gaining approval and the high cost of successfully marketing products. It will be three to four years before the limited numbers of main players have their first products on the market. Most consider that these main players will have the market to themselves for the first few years.
The public authorities might be expected to promote biogenerics, encouraging price competition to ease the burden of payment for biotechnology-derived treatments. This, however, is unlikely to be the strategy that the early biogeneric entrants will wish to adopt, having had to invest significantly to: bring their products to market and gain market acceptance for their products.
The general view is that the US will represent a harder market for biogenerics to access. The Big Pharma lobby is very strong, with patents lasting longer. The situation is becoming increasingly legalistic and the biotechnology innovators are likely to challenge every change in legislation, essentially employing effective delaying tactics. Changing current regulations will need political intervention, and there is some evidence that this is starting to occur.
- (The author is Sr.Executive -- Business Development -Strides Arcolab Ltd, Bangalore)