Are These Large-Molecule Twins Identical? The Biosimilars Paradox

Biosimilars may offer the promise of cheaper drugs, wider access and a panacea for over-stretched health care budgets, but they’re off to a mighty slow start.

So says Sandoz, makers of growth hormone Omnitrope, the first biosimilar drug approved in Europe and the only one available on both sides of the Atlantic. Number two epoitin alfa (equivalent to Epogen or Procrit) is expected to receive a green light from the European Commission in September and may be available by year-end.

But despite Europe's pioneering regulatory pathway for biosimilars, and reluctant grunts of acceptance from originator companies, most of which have realized that it’s pointless and counterproductive to keep resisting the biosimilar movement, the going’s tough, according to Ajaz Hussain, Sandoz’s VP and Global Head of Biopharmaceutical Development.

One might expect a drug that sells at a 20-30% discount—he did confirm this much--to fly off the shelves, given all the fuss around Amgen’s monopoly over EPO supply (and questionable bundling tactics) and the noise that most European governments and US payors are making about drug costs. But education and perception are blocking widespread uptake, as we and many others predicted they might.

“It will take time for physicians to fully understand what biosimilars are and how they fit in to the treatment options,” Hussain acknowledges. Reading between the lines: we’re not selling very much, yet (the company won’t say how much) but we reckon we will.

The slight paradox here: Sandoz reckons it needs more competition to help it drive wider acceptance and trust of biosimilars among prescribers, but not too much so as to render the economics of the game impossible. “It will take several products, and several companies to promote wider uptake of biosimilars,” he says.

But already, issues like manufacturing and the trial requirements make biosimilars a very different economic prospect to small molecules. (Genzyme’s issues with Myozyme, outlined in this WSJ piece, illustrate how even the innovators can’t always get manufacturing right.)

Biosimilars will nevertheless happen, assures Hussain (and it would be patients’ loss if they didn’t). By 2010, $18 billion’s worth of today’s biologics will be off-patent, and by then half of all products on the market will be biologicals, given the proportion of the R&D pipeline they currently account for.

Even with a few lingering perception issues, a potential $18 billion is a lot to share around among what may be just a handful of players. As for innovator’s follow-on efforts: that’s a significant competitive tool for originator firms, admits Hussain. “But the cycle will continue,” he adds. “We’ll copy them, too.”