In the report 'Biogenerics: Drivers and Resistors of Market Development', Datamonitor evaluates developments in the regulatory environment for biogenerics in the US and EU. The research also analyzes possible market entry strategies and assesses the market potential of biogenerics, and the barriers to companies wishing to enter the industry.
Growing demand for biogenerics
Despite strong opposition from the biotechnology industry, regulatory bodies are expected to establish approval pathways for biogenerics in the next few years, driven by the potential cost savings that would be made by governments and healthcare payers if they had access to lower cost biologics.
The large market potential makes biogenerics an attractive prospect for companies currently faced with limited scope for profitable expansion in the commodity generics markets.
As yet however, there is no abbreviated pathway for approval of generic versions of biological products. Without such a route, potential biogenerics players will have to undertake the same large-scale clinical development process as the originator companies, thereby preventing a healthy profit margin.
Currently, the consensus is that any such pathway would need to provide flexibility in data package requirement, in order to cover the spectrum of simpler to more complex products. The requirements are therefore likely to be defined on a case-by-case basis and the approval process is likely to be somewhat more protracted than that currently in place for small molecule drugs.
Regulators have thus far struggled to introduce a faster approval process for biogeneric drugs because of the difficulty in establishing bioequivalence of a biological product.
Biologics are large, complex, heterogeneous molecules, for which the manufacturing process can be a determinant of the end product. For a would be biogenerics manufacturer, demonstrating that its product was as safe and effective as the originators would be a difficult task, since establishing that immunogenicity had not been altered, and that any undetected differences in the product would not impact safety and efficacy, would be problematic without conducting clinical trials.
Due to the limited ability to characterize the structure and measure the activity of the clinically active component of a biological molecule, such a product is often defined by its manufacturing process, and players in the biotherapeutics market have traditionally held the view that "the process makes the product". Minor modifications in the manufacturing process such as change in reactor size, operating conditions, culture media, cell line etc can lead to variations in the quality or properties of the resulting product. Such changes, which often may not be detected by analytical techniques, can result in alterations to the safety and efficacy profile.
Although the FDA does appear to be moving toward a regulatory pathway for approval of generic versions of a handful of biologics, the biotech industry has contested the US regulator's legal right to lay out an abbreviated approval pathway for generic versions of small molecule drugs. The FDA has nevertheless argued that the 505(b)(2) provision of the Hatch-Waxman Act allows the approval of a biological therapy that is different from the originator product.
In November 2003, the FDA used the 505(b)(2) provision to approve Dr. Reddy's application to sell a version of Pfizer's blood-pressure medication. Following Pfizer's legal action however, the FDA is re-evaluating its decision to allow Dr. Reddy's to market AmVaz. The submission has been placed on hold because of "questions raised about the source of data" the agency relied on in its review.
The FDA nevertheless looks set to defend its interpretation of section 505 (b)(2). With a faster approval process for biogeneric drugs gaining support, it is unclear whether opposition groups will be able to delay the initiative indefinitely.
Leading generics companies like Teva and Sandoz are particularly well positioned to target biogenerics as an opportunity to drive revenue and profit growth. Sandoz expects to be the first company to launch a biogeneric product in Europe. The company's generic human growth hormone, Omnitrop, is currently being considered for approval by European regulators, having received a positive opinion from the CPMP in June 2003.
Of 14 potential biogenerics players assessed by Datamonitor, the majority have a growth hormone in development, reflecting the fact that this is anticipated to be the first class of biogeneric product to be approved in Europe and the US, while erythropoietins and colony stimulating factors are also well represented due to the large market size and imminent patent expiries of the brands.
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