Manufacturing News

Biosimilars provide new growth options

One ongoing concern for people and governments in Asia is the rising cost of healthcare. Every year, governments spend more on caring for their population while the people themselves worry that treatments and drugs could prove to be too expensive.

Since the 1990s, one way to lower costs has been to use generic drugs, which have made some of the most sought-after and expensive medicines in the world much cheaper.

But doing the same with the more complex biologic drugs that are often seen as the future of medicine may not be so easy.

Nevertheless, companies are betting heavily on the market for biosimilars, and health authorities are, slowly, making this possible. Across Asia, half a dozen countries already have active markets and more are on the way.

In the United States, generics brought down the price of drugs like the antidepressant Prozac from $40 per month to $10 per month. Over the last decade, the savings to patients from the use of generic drugs have risen three and a half times.

For emerging markets like much of Asia, the impact of generics on the pockets of patients has been even greater, particularly for complex and expensive chemical drugs like the antiretrovirals used to treat HIV/AIDS.

In 2007, a one-pill daily dose of the ARV combination tenofovir and lamivudine cost $613 per year in low-income countries and $1,033 in lower middle-income ones. The price has fallen 67 percent since then.

At the end of 2012, some governments negotiated a price of a little more than $100 for a two-pill combination of the same drugs, according to humanitarian organization Medecins Sans Frontieres, which tracks prices.

Generics are copies of chemical drugs that can be produced and sold once the patents on the original products run out. Patents last around 20 years, depending on which country grants them. A number of companies, most notably in India, emerged and expanded globally by producing and distributing generics.

Because chemical drugs are essentially mixtures of chemicals made in factories, the manufacturing process is relatively easy to copy to create a generic version. Now companies are trying to do the same with the biologic drugs that have emerged, over the last couple of decades, as the new wave of medicines.

But copying biologic drugs is much harder than chemical ones. In fact, it is almost impossible to make an exact copy. What companies are producing are types of drugs known as biosimilars.

"A similar trend will be seen with biosimilars," says Christopher Ko, CEO of Samsung Bioepis. Since its inception in 2012 as a division of the South Korean conglomerate, Samsung Bioepis has sought to emerge as a global player in biosimilars.

As of today, there are around 200 biologic drugs on the market. In 2010, global sales of biologic drugs added up to $138 billion. Jenna Oh of Thomson Reuters says that sales could hit $200 billion in 2015 and jump to $253 billion in 2020.

By 2016, many of the best-selling drugs in the world are likely to be cancer drugs or protein-based drugs.

"And I'll tell you, a lot of them are biosimilars," says Paul Bridges, worldwide head at Parexel Consulting.

The potential market for copies of biologic drugs is enormous and this fact has not been lost on drug companies in Asia.

"One of the reasons we went into biosimilars is because of this mega trend," said Ko, but he warned that no-one can predict how big the market will be because the market is not there yet.

The problem with copying biologic drugs is that these types of drugs are made inside living organisms. To oversimplify, they are grown inside tissue cells or microorganisms.

The process is exacting, and replicating it is both difficult and expensive. Ultimately, biosimilars are likely to be cheaper than the original biologic drugs but the price difference is not as big as it is with generics.

Another challenge for biosimilar manufacturers is that understanding and acceptance of these drugs is, for the time being, much smaller than with generics.

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