Biosimilars gain momentum — and pharma leaders are noticing
Biosimilar development in the U.S. appears to be gathering momentum, following the approval of Celltrion and Pfizer’s Remicade copy by the Food and Drug Administration in early April.
The drug, marketed as Inflectra, is only the second biosimilar to clear regulatory review in the U.S., after Sandoz’s Zarxio in March 2015. But there are a number of other biosims entering late-stage development or with applications filed at the FDA. And with several blockbuster biologics nearing patent expiry, competition is likely to increase.
Respondents to BioPharma Dive’s first State of Drug Development survey picked up on this progress, with nearly a quarter choosing biosimilars as the most promising therapeutic class among the many innovative technologies entering the market. This was a higher share than any other technology.
The survey reached nearly 850 biopharma and life sciences researchers, executives and managers, with over a third coming from pharmaceutical companies and nearly a quarter from biotechs. Respondents shared their views on the leading opportunities and challenges in drug development, from initial manufacturing through clinical trials.
The optimism among respondents over the growth of biosimilars serves as a good framework to provide an update on where things stand as Q2 gets started. But the entirety of the report, including insights on key industry trends, can be downloaded here.
Zarxio and Inflectra
Although biosimilars have been on the market in Europe since 2006, the approval of Zarxio and Inflectra over the past 12 months only marks the beginning for the U.S.
Both were approved under the shortened 351(k) licensure pathway, which was created by the Biologics Price Competition and Innovation Act in 2010. This act created two categories, “biosimilar” or “interchangeable,” for biologic products with an approved reference product. Biosimilars must be highly similar to the reference product and show no clinically meaningful differences. Interchangeables are required to meet higher standards, and can be substituted for the reference product by a pharmacist.
Notably, both Zarxio and Inflectra were approved as biosimilars and not as interchangeables. They do, however, carry the same indications as the biologics they copy, Amgen’s Neupogen and Johnson and Johnson’s Remicade (respectively).
Although both Neupogen and Remicade have been on the market for years, they still rake in substantial sales. Remicade earned nearly $4.5 billion in the U.S. last year, the best 12-month performance domestically since its approval. (Global sales did decline, however.) Neupogen’s market is smaller but still significant, with sales of $793 million in the U.S. in 2015.
Biosimilars promise to increase competition and lower prices across a number of other blockbuster biologics. They also represent new avenues of growth for companies seeking to enter previously protected markets.
There is still a long way to go before biosimilars have anywhere near the market impact of generic drugs in the U.S. But examining the impact of generics can serve a framework for envisioning the upper bounds of biosim potential. Last year, 88% of all prescriptions dispensed were generics, netting $254 billion in drug savings, according to a report compiled by the IMS Institute for Healthcare Informatics for the Generic Pharmaceutical Association. But these savings did not happen overnight, instead building over decades. Biosimilars are still very much in early stages domestically.
Sandoz initially discounted Zarxio 15% compared to the price of Neupogen—a significant price gap but less than that in Europe, and a smaller reduction than what is sometimes seen in generic pricing. There is no public information so far on the price of Inflectra.
More biosims in the wings
In addition to the two biosimilars approved, there have been six other applications accepted by the FDA. One, Hospira’s copy of Amgen’s Epogen, failed to win approval although Pfizer has indicated it intends to resubmit an application in the first half of this year.
Novartis’ Sandoz has two other biosim applications submitted for copies of Enbrel and Neulasta, two Amgen drugs. Both were accepted by the FDA in late 2015. Given the FDA’s stated goal of completing its review on biosimilar applications within 10 months, there could be action on these drugs sometime this year.
Another company, Apotex, submitted applications for two products (copies of Neupogen, Neulasta) in 2014, but neither have been scheduled for an advisory committee meeting to date, according to the Biologics Law Blog of the law firm Patterson Belknap Webb & Tyler.
Perhaps the most promising target for biosimilar competition is AbbVie’s Humira. A treatment for a broad range of inflammatory conditions, Humira is one of the world’s bestselling drugs. In 2015, it pulled in a shade over $14 billion in revenue, with $8.4 billion coming from U.S. sales.
In late January, the FDA accepted Amgen’s biologics license application for ABP 501, a biosimilar version of Humira. A target action date is set for September 25, 2016, but the drug has been delayed before. Merck is also developing its own copy of Humira, pushing into Phase 3 trials last month.
FDA approval is just the first step, however. Biosim companies will need commercial manufacturing capabilities for their biologic drugs, which are more complicated and harder to produce. This is a challenge across the industry, and not specific only to biosimilars. In BioPharma Dive’s survey, late-stage development for scalability and manufacturability was the top manufacturing-related challenge among respondents, chosen by about 13%.
Further entry of biosimilars is likely to bring with it more litigation. A high-profile case between Amgen and Sandoz has already reached the Supreme Court. Sandoz is petitioning the Court to overturn an earlier decision by a federal appeals court over when a biosim manufacturer must notify the branded company that it plans to market a copy.
Under the Biologics Price Competition and Innovation Act, the original drugmaker must be given 180 days of notice. Sandoz had tried to argue it could start this clock 180 days before the FDA granted biosimilar approval, enabling it to enter the market soon after clearing regulatory review. However, the appeals court ruled Sandoz needed to wait until after approval, effectively giving Amgen an additional 6 months of market exclusivity.
The two companies are also embroiled in a patent infringement suit over Amgen’s Enbrel. Amgen claims Sandoz’s biosim submission for a copy of the drug infringes on its patent and seeks an injunction to block sales of the biosim, if it is approved.
On a broader level, biosimilars will test how the industry copes with the issue of liability. Unlike generics, biosimilars are not identical copies of the reference product (by virtue of being a biologic). This could open up manufacturers to new liabilities. Dan Brettler, Life Science practice leader at Conner Strong & Buckelew, sees potential for liability differences between biosims and generics in the area of failure to warn and in manufacturing and design defects. But, with only two products on the market, the risks and legal issues are only beginning to develop.
Overall, biosimilars look set to present a number of important opportunities and challenges to the U.S. biopharma landscape. Respondents to BioPharma Dive’s inaugural Drug Development survey ranked growing interest in biosimilar development as the fourth biggest trend impacting the industry. A fifth of those surveyed identified rising chronic disease levels as the most important trend—something implicitly linked to biosims as most biosimilars are for chronic disease indications.
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