Biogenerics: Opportunity In Abundance

In The Midst of Thick Challenges

A number of factors are coinciding to make biogenerics a hot topic at the moment: Government agencies around the globe especially US and Europe are busy devising a balanced regulatory policy for biogenerics to address the rapid and a more urgent priority for governments and consumers healthcare spending on ageing populations.

As key patents on some of the early recombinant protein therapeutics have started to expire the generic companies are developing the capabilities to develop and create their own versions of these off-patent products while Innovators on the other side are trying there best to exert a much greater influence and slow down the reforms.

In this context the people’s representatives in US have taken a big leap forward to open the much debated market barrier for biogenrics. The bill passed by the Senate health, Education, Labor and Pension committee by a Voice vote is fairly assumed to be included in the broad FDA bill expected to be passed in the coming months is one such effort taken by US and being eagerly tracked by all the stake holders involved.

The authors who wrote the bill say "The bill reflects a balanced approach that enables patients to have safe, effective and affordable biological drugs, while preserving the incentives that have brought these life-saving advances to the American public,"

The major highlights being provision of a 12 years of marketing exclusivity for Biologic medicine to the Innovator against the traditional 5 years of marketing exclusivity for new chemical entities.

If this becomes law it could open doors for multibillion dollar biotech products such as Epogen (Amgen), Procit (Johnson & Johnson) since their patents have expired and have already enjoyed at least 12 years of monopoly.

So what this means to generic drug maker is an Opportunity in abundance: The big attraction in terms of market potential for biogenerics however in the midst of thick challenges in terms of massive barriers to entry.

Basic barriers to market entry in biogenerics are much higher than for any small molecule generics such as

¨ High development costs since the investment needed to put a biogeneric through the necessary clinical trials is considerable
¨ Greater time in development (due to required clinical testing)
¨ Quality requirements, as well as demanding and uncertain regulatory approval and not but the least
¨ Intellectual property issues in terms of Patent.

As a result, the situation demands the companies to move beyond typical generic company strengths and develop new skills in biotechnology, manufacturing, clinical trials, regulatory compliance, pharmacovigilance testing and marketing.

The investment needed to put a biogeneric through the necessary clinical trials is considerable and illustrates the great importance of strong financial backing and regulatory expertise.

All in all, generics companies will have to create an entirely new business model for biogenerics: in many ways closer to the branded biotech model.

Industry observers says that only a select bunch of top biogeneric players are expected to make use of this opportunity and have an initial impact on the market due to there present strength and capabilities. Five key players will be Novartis's Sandoz, Teva, BioPartners, BioGenerix a subsidiary of Ratiopharm and Stada through its affiliate Bioceuticals. However, based on the current outstanding success of Indian pharmaceuticals companies on follow on generics we can certainly look forward for Biotech Industries in India joining the race.