They are often called generic biologics or biogenerics; but, of course, they are not truly generic. Whereas chemical or simple small-molecule off-patent products can be perfectly replicated as generics, the nature of biologic or complex large-molecule products derived from living cells precludes exact generic copies. Thus, as these protein products come off patent, much debate has ensued-from what to call them, to can they be made efficaciously, to can they be marketed profitably?
What to call these therapeutically similar products has evolved to biosimilars or the preferred follow-on protein products, sometimes shortened to follow-on biologics or simply follow-ons. But after that, the debate becomes more complex due to their projected market size. In 2003, the global market of follow-ons was estimated to be $30 million. That has escalated to a projected $12 billion in 2010.
When Sandoz's Omnitrope (somatropin), a human growth hormone (HGH) similar to Pfizer's Genotropin, finally received Food & Drug Administration approval on May 31, the Generic Pharmaceutical Association (GPhA) hailed it as a significant first step toward opening the door for billions of dollars in potential savings for health plans and consumers. Yet the FDA downplayed the approval, even putting out a question-and-answer sheet to indicate it was not precedent-setting.
Second, according to Mayr, "The FDA has argued that it can't approve a generic product using an abbreviated process. This approval washed that away as well. They've approved it under existing authority-authority that the industry has argued they've had all along."
But the FDA disagrees. So the industry now needs to get Congress to convince the FDA that it does in fact have the authority to establish an approval pathway for other types of follow-on biologics. To that end, Rep. Henry A. Waxman (D, Calif.) plans to introduce legislation that would "accomplish this goal soon." In a best-case scenario, experts say, the legislative process will take at least three years.
In the meantime, Omnitrope will provide a marketing case study to perhaps answer the question, How large a market is there for follow-on biologics that can offer large discounts and substitutability?
Experts have predicted that price discounts for follow-ons will be as low as 15%-20% compared with the more typical 50% for small-molecule generics, due to the greater complexity and higher costs of biologics' development and manufacturing. Ajaz Hussain, Ph.D., VP of biopharmaceutical development for Sandoz, noted that the somatropin product Sandoz launched in Germany earlier this year is priced at a 25% discount and should be similarly priced in the United States.
Will savings of around 20% be incentive enough to switch from drugs patients are already stabilized? David Ridley, Ph.D., Duke University, an expert in the market for follow-on biologics, believes it may be. "Some hospitals, physicians, and patients will be reluctant to change; many of these generic biologics will go through an abbreviated approval process, so they won't have the backing of the full clinical trials that the branded product will have. Having said that, 20% off a high price might be sufficient motivation for some consumers."