Indian Generic Pharma Companies in a Race to Develop Biosimilars

Almost a year after the Indian Central Drugs Standard Control Organization issued new guidance for biosimilar drug development that eases the required procedures for bringing drugs from clinical trials to market, a race has developed among Indian companies to develop biosimilars. Indian pharmaceutical companies dominate the global generic drug market and are poised to develop biosimilars—copies of large, complex biologicals—with annual sales of up to $60 billion as they go off patent in advanced economies.

Kiran Mazumdar Shaw, chairman and managing director of India-based Biocon, said the United States and Europe are seeking ways to combat the high prices of biologics, and biosimilars are a segment of the industry with rich margins. “I think that’s a compelling reason why people want to get into biosimilars,” she said. KPMG consultants estimates that the global biosimilar segment is expected to increase the value of sales at list prices from $2 billion in 2016 to $12.1 billion in 2020. The Indian biosimilar market is forecast to increase from $186 million in 2016 to $1.1 billion in 2020.

However, the manufacturing process for biosimilars is much more complex and expensive than for generic drugs. Biosimilars also accrue higher clinical trial costs than generic entities. Thus, the investment needed for development of biosimilars is much higher: $1 million to $4 million for generics versus $100 million to $250 million for a biosimilar. The cost savings are much larger for generics than for biosimilars: biosimilars generally cost 15% to 30% less than the reference biologics, whereas generics cost 50% to 90% less than branded drugs, which may be a factor that slows down adoption of biosimilars.

Biogen is currently awaiting FDA approval of pegfilgrastim (its biosimilar of Amgen’s Neulasta)—it is 1 of 6 biologics co-developed by Mylan and Biocon for global marketing, and more products are planned, according to Biocon’s Shaw. She expects biosimilars to contribute to about 20% of the company’s top line when they get regulatory approvals in the United States and Europe.

Generic drug manufacturers Cipla, Aurobindo Pharma, and Dr. Reddy’s have announced increased research budgets to focus on biosimilars over the next few years. Cipla has dedicated $130 million to the effort, Aurobindo announced a doubling of its research budget to $80 million with a focus on biosimilars, and Dr. Reddy’s is already developing 2 new biosimilars (trastuzumab for breast cancer, a biosimilar of Genentech’s Herceptin; and bevacizumab for metastatic kidney cancer, a biosimilar of Genentech’s Avastin). Reliance Life Sciences purchased global rights for biosimilars of infliximab from Epirus Pharmaceuticals, and Zydus Cadila is collaborating with a Turkish pharma company to market biosimilars in the Turkish market.

Biocon, in partnership with Japan’s Fujifilm Pharma, already markets the insulin analog glargine in Japan, which is embracing biosimilars to keep healthcare costs down for its rapidly aging population. Biocon’s concentration in diabetes and oncology will drive the company to continue to seek partnerships with other companies that have valuable assets in diabetes, cancer, or immune oncology, Shaw noted.

It remains to be seen what changes the new administration will bring to the table, but the US healthcare depends strongly on generics, Shaw points out, and needs affordable biopharmaceuticals to lower healthcare costs. “India is a strategic partner for the US in its healthcare models—in drug innovation, drug development, and finally developing these affordable drugs for the US market,” she points out. As regulators in the US and Europe become more comfortable with biosimilars, she says, the pathway will likely clear and costs of production will come down. Shaw believes India has a rich pool of talent in biotech and the life sciences, and there is no reason for Indian companies to miss the huge opportunities that biosimilars represent.