Scientist pipetting medium into 12-well plateDespite the fact that this kind of drugs is about to increase its popularity and market share worldwide, sales in the Peninsula are today expected to climb up to previously unexperienced peaks in the next five years, as stated in a recent report released by the consultancy firm Frost & Sullivan

Roberto Carminati

As a new wave of mergers and acquisitions is taking the global pharmaceutical markets by storm, experts say a number of them could actually impact on the bio-similar or generic drugs sector, the reason being that this industry is growing at a dramatic pace and is poised to keep on rocketing. Also, as previously noted in a recent PharmaWorld enquiry, whilst most of the M&A operations underway worldwide will possibly take place in the much promising Latin-American scenario, record-high values in the monoclonal antibodies bio-similar industry are instead expected on the opposite shore of the Atlantic ocean, with Italy leading the trend. The issue was largely debated during a very recent Frost & Sullivan’s appointment with its traditional Analyst’s briefing, meaningfully dubbed this time Analysis of the global bio-similars market, which is part of the Life sciences growth partnership program that the world-famous consultancy and market research company implemented. The definition of a bio-similar product is that of an approved subsequent version of an innovator biopharmaceutical drug, and in this category the monoclonal antibodies medicines are the ones that have to go through a tougher series of approval procedures before they are officially launched on the market. Also, their overall technological content is higher than that of other releases in the same generics arena, with much more complicated clinical implications. Whatever their precise nature should be, generic or bio-similar drugs are nowadays expected to jump from their 1.2 billion dollars global value, recorded last year, to a much more impressive 24 billion dollars, that analysts at Frost & Sullivan have forecasted for the end of this decade. Undoubtedly, in Frost & Sullivan’s opinion and figures, such countries as the United States are about to play an important role in the expected escalation, since it has been noted that brand products are still prominent in a variety of North American states, and Europe in its whole can also give an important contribution in the sector’s overall development. But it will be Italy, experts stated, to display the most impressive growth rate, flying high over the international average ratios.

The drivers for the tri-colored boom

If, due to relatively lower labor costs and less restrictive authorization and regulatory policies such countries as the South American ones proved attractive for a number of manufacturers, who have focused on merger and acquisition opportunities in order to better control the local markets, Italy can leverage on a series of different factor. The economic and financial crisis is pushing consumers to reduce their healthcare expenses and budgets, also due to recent debates on reforming the reimbursement system and much discussed healthcare spending review projects and policies. Whatever the drivers, analysts at Frost & Sullivan believe the annual compound growth rate for the tri-colored generics business is expected at 52.6 percentage points between 2014 and 2019. That means that if two years ago, according to researchers, the Italian market would be 19.4 million Us-dollar worth, by the end of the decade it could climb up to the astonishing amount of 373 million dollars. Frost & Sullivan foresees a possible enforcement of the spending review measures between 2014 and 2017, and this fact could provide the generic or bio-similar drugs with a further boost. Besides that, aggressive marketing strategies adopted by vendors in the segment, together with a weaker capacity to invest in new formulations and product lines by the originators brands, could as well end up pushing the generics business upwards in the country. The big picture is then completed, according to analysts, by price and tariffs attempts of reform, mainly based on the active principle paradigm as a measure to reduce the overall expenditure levels in the healthcare segment.

Europe as a whole is proving a very attractive market for monoclonal antibodies bio-similar producers, as the global consultancy firm has clearly pointed out in its early 2014 Analyst briefing. «The imminent entry of several companies, including big pharma, small biotech and generic participants, into the global bio-similars space», researchers at Frost & Sullivan stated, «will propel the market towards exponential growth. Already, some Indian groups such as Dr. Reddy’s Laboratories, together with Biocon and Reliance Life Sciences are making a concerted effort to enter the European market. Although these companies have not yet penetrated the European market due to the stringent regulatory pathway, new product launches are to be expected in the mid-term».

Halfway between business and regulatory framework

Further comments on the issue came from the company’s senior analyst for the healthcare sector K. Srinivas Sashidar: «On one hand, the market is powering ahead regarding the strength of participants’ global expansion strategies, and, on the other», Sashidar observed, «it is still beset by traditional patent-infringement issues. Moreover, the strategies adopted by innovator companies need to be taken into account. For instance, Johnson & Johnson has extended the European patent life of its innovator drug Remicade until February 2015, thereby delaying the launch of Hospira’s bio-similar monoclonal antibody (mAb) Inflectra and of Celltrion’s bio-similar mAb Remsima». Remicade, as sources reported, was approved in the indications for rheumatoid arthritis, ankylosing spondylitis, Crohn’s disease, ulcerative colitis, psoriatic arthritis and, last but not least, psoriasis. Frost & Sullivan’s analysts also focused on the exponential growth that the generic industry is today expected to face in the United States, that display «untapped markets with a strong bio-similars pipeline» as well as in Japan, poised to experience an impressive development over the next five years or so; while to mark the difference between one country or macro-region and another is often their respective regulatory landscape. The framework is seen as much more mature in Europe, where researchers believe it has «first been elucidated several years ago»; but nonetheless opportunities seem to spring up in different parts of the world too. «Bio-similar developers are cutting their teeth in emerging markets with less intellectual property protection» Frost & Sullivan noted, «and they will be able to launch quickly once the route is clear in established markets. For instance» the company continued, «Biocon said recently it is about to launch a bio-similar of Roche’s 6 billion dollars breast cancer blockbuster Herceptin (trastuzumab) in India next spring».

As we also pointed out earlier, the bigger the companies will become to compete in such challenging markets as those mentioned above, the better they will probably perform. This is why a number of brands is now considering the idea of partnering up or merging with former competitors or other names in the same arena. That’s what happened with Teva’s decision to team up with Cephalon, but also with Lupin Pharmaceutical’s alliance with Neuclone. A significant boost to research and development activities, in order to turn the country into a world leader in the bio-similar industry by 2020, also comes from the South Korean government, according to another Frost & Sullivan’s 2013 report. The research considered that the South Korean market was 62.3 million dollar worth in 2011; but experts estimate it could rocket up to a 89.8 million dollars value by the end of the decade, thanks to erythropoietin, that analysts consider «the biggest revenue generator in the country». Back to merely technological issues, senior analyst K. Srinivas Sashidar added and concluded: «In addition to monoclonal antibodies bio-similars, follitropins, interferons and low molecular weight heparins are likely to emerge in the long run. However, some companies may focus on specific therapeutic classes depending on their capabilities and strategic fit».