South Korea is aiming to capture a big share of the $190 billion worth global biologic's market. Seoul has set a goal to increase pharmaceutical exports to Won 23 trillion ($20.5 billion) by 2020 which is up tenfold from the 2012 figure when it wants to have three of the world’s top 50 pharma companies.
In the longer term, South Korea wants to use biosimilars as a stepping stone to its own life sciences innovation, just as Samsung moved from copycat electronics to become a serious rival to Apple. The government has provided the industry with more than Won 340 billion of annual support in pursuit of this objective.
According to an Allied Market Research (AMR) report , the global biosimilars market would reach $35 billion by 2020 from the estimated $1.3 billion in 2013. Deeper penetration with clearer regulatory pathways in developed markets and higher efficacy and safety in emerging markets will back the market growth during the forecast period.
Over 10 blockbuster biologics with annual sales of $60 billion are facing patent expiries in Europe and in the US during the next four years. Top pharmaceutical manufacturing brands are repositioning their strategic agendas from approvals to product launches to gain market capitalization.
"Biosimilars developers have been using emerging markets with less intellectual property protection as their launch pad for established markets" say AMR analysts. "With regulatory framework maturing in established markets, it will be easier for biosimilars manufacturers to quickly enter into such markets" analysts added, citing collaboration between Mylan and Biocon to commercialize biosimilar of trastuzumab in India and the approval of first biosimilar version of monoclonal antibody drug by Hospira in Europe. Due to lower intellectual property rights protection and higher activity of regional players, the Asia Pacific region has emerged as the leader in biosimilars market.
Biosimilars as a cost effective alternative provides room for economical biopharmaceutical medications for chronic disorders that are rampant around the globe. The widespread chronic disorders and the need for cost effective medication is driving the biosimilars commercialization.
Biosimilars are highly-similar versions of biological drugs that are indicated for cancer, kidney disorders and a wide range of autoimmune diseases. Originator biologics are the most expensive drugs in the pharmaceutical industry and many of them cost nearly $100,000 per patient per year.
These expensive biologics impose a heavy financial burden on patients and healthcare systems, limiting easy access and optimal care. Patent protection for some of the biologics has already expired and many more are to lose patent rights between now and 2020. This has given an opportunity to biotechnology companies to develop and market biosimilars with a cost benefit of about 20 to 30 per cent.
Biosimilars are designed to provide competition for the expensive, branded biological drugs that have swallowed a growing share of global pharmaceuticals spending over the past two decades. Whereas traditional chemical-based pills can be copied easily by generic manufacturers when their patents expire, “biologics” are impossible to replicate precisely. This has left a gap for companies to develop medicines that are a close enough match to the original to be recognized as “biosimilar”.
Forecasts for the growth outlook of the global biosimilars market vary, but South Korea’s state-run Biotech Policy Research Center expects the global market to grow at an annual average rate of 60.4 per cent to $24 billion in 2019 from $880 million in 2012.
In order to gain a slice of the biologic's market, many biotechnology companies have ventured into the biosimilar sector bringing out less-expensive copies of reference biologics. Biosimilars have been in the E.U. market since 2006 and less-regulated markets such as China, India, and South Korea have a number of biosimilars in their domestic markets. After a long delay, finally, the FDA took a historic decision to approve the first biosimilar Zarxio from Sandoz on March 6, 2015. The coming years will witness the flooding of large number of biosimilars into the U.S., which happens to be the largest market for biopharmaceuticals.
Demand for these drugs is expected to surge in coming years as several of the world’s best-selling biologics, such as AbbVie’s Humira for rheumatoid arthritis and Roche’s Herceptin for breast cancer, near the end of their patent lives, opening the way for competition.
As the market for biosimilars is heating up in South Korea, the country’s conglomerates are investing heavily in the business. South Korea’s biggest conglomerate, Samsung Group, through its biotech unit, Samsung Bioepis Co., is developing a biosimilar version of the blockbuster arthritis drug, Enbrel, which is marketed by global drug maker Pfizer Inc. Hanwha Chemical Corp, a unit of the Hanwha Group conglomerate, received approval from the Korean government for its biosimilar product of Enbrel last year and is looking for sales opportunities abroad.
Olivier Loeillot, Asian general manager of GE Healthcare’s bioprocessing business, which supplies manufacturing equipment to the industry, says Celltrion and Samsung Bioepis have moved “very quickly” to become serious players.
Biosimilars have higher barriers to entry than traditional generics because of the heavier investment and trickier science involved. Yet Celltrion overcame these hurdles to develop the first copy of Johnson & Johnson’s rheumatoid arthritis drug Remicade, the world’s third best-selling drug last year with sales of $10 billion.
This was seen as a landmark not only because of its high value but also because it was the first of a more complex category of biologics called monoclonal antibodies to face biosimilar competition.
The Celltrion version, known as Remsima or Inflectra, was launched in Europe in February and is now sold in 40 countries worldwide. But the biggest market by far is the US which so far remains elusive.
The US Food and Drug Administration approved its first biosimilar earlier this year in a sign that America is finally opening to the category after years of lobbying against it from some big pharmaceuticals and biotech groups.
According to industry analysts, the strategic collaborations for global expansion, especially for the high potential segments such as monoclonal antibodies (mAbs) and erythropoietin will be key to the market growth. However, the strategies are persistently threatened by traditional patent-infringements. Key product segments such as follitropins, interferons, and insulin biosimilars will emerge lucrative segments in the long run. Certain therapeutic classes such as oncology and autoimmune diseases will gain importance from the biosimilars developers as these classes will have higher room for growth due to awaited patent expiries during 2014 – 2019.