03 Nov 10 Biosimilar products – Is it really a boon?

When India based biotechnology firm Biocon entered into an agreement with Pfizer recently, a lot of hype was generated on biosimilars being the next big cash cow for India. Biocon struck this deal to introduce biosimilar insulin products in India – the second diabetes capital in the world after China.

Biosimilars[1] are generic impersonation of biotech products. They are near identical to the original and pass through strict mandates of regulatory bodies in the US and Europe. One of the reasons that make this concept so attractive is the gradual expiry of patents of innovator companies, which will give room to other companies who wish to introduce copies.

According to Universal Consulting, the Indian biosimilar market was worth USD 200 million as on 2008 and is expected to be USD 580 million by 2012 – a jump of more than 100%. The expiry of patents will create market opportunities till 2016 – between 2012 and 2016; the market will witness a patent expiry of almost USD 60 billion of biotech drugs

So what is the problem? Regulation. Biosimilar products create major safety concerns due to its growing popularity, which is not regulated as per international norms. FDA (Food and Drug Administration) in the US and EMEA (European Medicine Agency) in Europe are the key watchdogs for biosimilar products, that conduct extensive clinical trials and a detailed study before launching the product into the market. In India however, biosimilar products are approved by minimum clinical trials conducted over a few months with no imperative set of guidelines. The hype about biosimilar products may actually land up as a concern in the long term due to the lack of a complete regulatory framework.

The increasing popularity, large application areas and low costs (biosimilars cost one third of biopharmaceutical products) makes this segment lucrative, but it is too early to come up with projections especially during the absence of a comprehensive regulatory framework of international standards. Experts across the country are asking if there is enough regulation to face the safety of clinical trials, genetic engineering and discrepancies in pricing. What will happen should something go wrong? The question is critical.

[1] As a note, the difference between biosimilar and generics is that biosimilars are large, complex molecules produced by living organisms whereas generics are small molecules, produced by chemical synthesis (Sandoz FAQ)

Tina Nagrani

Tina was a research analyst with ValueNotes.

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