Introduction to Biologics and

Biosimilars
Defining Biologics and Biosimilars

Biologics are produced in

genetically engineered living
cells. They include
therapeutic proteins, which
replace or augment
beneficial human proteins,
and monoclonal antibodies,
which can strike disease
targets with enhanced
precision.
 Small Molecules v/s Biologics
Biologics are grown from living things
Chemical medicines are
chemicals made by chemists out A biologic must be manufactured under precise conditions,
of other chemicals. That’s why following many exacting steps, to yield a consistent product
they are also known as “small
molecules” or “chemically- Biologics are highly sensitive to manufacturing conditions
synthesized drugs”
Reprogrammed cells make protein,
Following the same “recipe” Genetic blueprint reproduce in large numbers
yields exactly the same
product
Inserted into cells

Protein is harvested
and purified
Biologic medicine

= Many further
processing steps
Diclofenac
Small Molecules v/s Biologics

Distinctive Biologics Small Molecules

Characteristic
Living organisms (human,
Source animal or microorganism) Chemical Synthesis
with DNA/RNA synthesis

Complex mix of heterogeneous

Active
proteins Unique, well defined
Ingredients
and impurities

Limited characterization, Well-defined structures, sensitive

Characterization methods, available standards,
difficult to quantify
discriminators

Potential formation of
Immunogenicity1 antibodies, difficult to Rare
predict

Sensitive to minor changes, Highly reproducible, products that do

Manufacturing
products generally very sensitive to not depend extensively on the
Process the manufacturing process manufacturing process
Role of Physician, Pharmacist and Patients
Type of Product  Physician Pharmacist Patient

Dispense as written by Always gets what physician

Biologic Can switch
physician prescribes

Dispense as written by Always gets what physician

Biosimilar Can switch
physician prescribes

Can substitute between

Gets what pharmacist dispenses
Can switch (may check reference and any
Interchangeable (any interchangeable biologic
dispense as written to interchangeable biologic to
Biologic can be substituted for reference
prevent substitution) that reference (without
without consulting physician)
consulting physician)

Can substitute between

Can switch (may check Gets what pharmacist dispenses
Generic Small reference and any generic to
dispense as written to (substituted without consulting
Molecule Drug that reference (without
prevent substitution) physician)
consulting physician)

Note: Most prescribing by Brand name; Biosimilars have brand names too
FDA Approval Pathway
 Reference Product vs. Biosimilar Development

 While a biosimilar may require more

analytical characterization and
functional assessments than reference
products, it may need fewer clinical
trials and clinical pharmacology studies
than its reference product to obtain FDA
approval.
 Due to the ability to rely on the FDA’s
previous finding of safety and
effectiveness for the reference product,
a biosimilar may have a shorter and less
costly development program

 The goal of a biosimilar development program is not to independently establish the safety and efficacy of the
biosimilar product, but to demonstrate that the proposed biologic product is biosimilar to the reference product.
 No single study is considered “pivotal” to a biosimilar application; rather, the totality of data and information
submitted to the FDA support the demonstration of biosimilarity.
 Extrapolation, Interchangeability, Switching, and
Substitution
 While reference products with
multiple indications require clinical
studies to establish safety and efficacy
for each indication, biosimilars are not
required to be evaluated clinically in
every indication held by the reference
product
 Instead, a manufacturer can
“extrapolate” data and information
supporting biosimilarity in one
condition of use to other conditions of
use for which the reference product is
licensed
 The biosimilar manufacturer must provide scientific justification to support extrapolation, which may include knowledge
of the mechanisms of action, pharmacokinetics, pharmacodynamics, efficacy, safety, and immunogenicity of the reference
product
 The expectation for most biosimilar drugs is that they will be approved for the same indications as the reference product.
However, a biosimilar may be approved with fewer indications than the reference product because of a manufacturer’s
inability to provide adequate scientific justification to support extrapolation or due to intellectual property protections
 Extrapolation, Interchangeability, Switching, and
Substitution
 A “biosimilarity” determination by the FDA is a necessary, but not sufficient finding to allow substitution at the pharmacy
 Per US state pharmacy laws, a biosimilar must also be designated by the FDA to be “interchangeable” with its reference
product to be eligible for pharmacy substitution.

 The FDA designates a biosimilar as

“interchangeable” if, in addition to
demonstrating biosimilarity, the
manufacturer demonstrates

 For interchangeability, FDA guidance indicates that it is generally expected for a manufacturer to conduct 1 or more
“switching studies” that will assess the safety or efficacy of alternating between the reference biologic drug product and
the biosimilar
 In the absence of the FDA or a state permitting the automatic substitution of biosimilars, hospitals, health plans, and
pharmacy benefit managers may use other formulary management techniques including “therapeutic interchange” as a
mechanism to substitute a biosimilar for its reference product
Why Biosimilars

 Biosimilars are expected to have a robust impact on lowering healthcare costs

 Biosimilars are expected to save the EU up to $44B in healthcare costs by 2020. 1
 Over the next 5–10 years in the US, it is estimated that biosimilars can save the healthcare system
approximately $150B.2

 The value of biosimilars in the marketplace

 Biosimilars offer the opportunity for system-wide cost savings 3
 The introduction of biosimilars can provide headroom for greater investment in innovator products 3
 Biosimilars can provide more treatment options to patients with serious illnesses 3
The Cost of Biologics on the system
 In 2019, US spent $493 billion on medicines at ex-manufacturer invoice prices, including $211 billion on biologics, which now
comprise 43% of total medicine spending. Manufacturer net revenues for medicines, after discounts and rebates are reflected,
totaled $356 billion, of which 48% stem from sales of biologics
 Even including the effect of biosimilar competition over the past decade, biologics spending increased significantly since 2014,
at a CAGR of 14.6%, outpacing the 1.6% CAGR for small molecules and raising the total market CAGR to 6.1%.
 The three classes with the highest spending — oncology,* antidiabetics, and immunology agents — account for 66% of biologics
spending, and their biologics growth is at 21.0%, 13.7%, and 21.2% CAGRs, respectively, in the past five years.
There are biosimilars launched, approved, or in
development for 35 molecules
Development of biosimilars is being driven by smaller
companies, while marketing is done mostly by large companies
 Currently, 13% of the biosimilar products in the pipeline are being developed by six large pharma companies; those with
more than $10 billion global sales. The remaining 87% are being developed by 41 smaller companies with varying degrees of
biologic or biosimilar development experience.
Expected launches and uptake are likely to increase overall
spending on biosimilars significantly to $16–36 billion by 2024
 Biosimilar spending of $5.2 billion in 2019 is expected to rise to nearly $27 billion in 2024 in the base case, with scenarios
ranging from $16 to $36 billion.
Commercial Analytics – Small Molecule v/s Biosimilars

 Biosimilar companies need to engage in

competitive intelligence and analytics for Distinctive
the product assessment Biologics Small Molecules
Characteristic
 The purpose of the competitive intelligence
is to understand the competitive landscape Development life long development Short development times
of the other biosimilar developed as well as cycle times 7-9 years < 3 years
to foresee the molecules therapeutic
relevance for the future
 Product assessment is done by analyzing Substantial investments US$ Limited investments US$
Investment
various data set for Competitive 50-200mm 1-3 million
intelligence, in market product demand and
companies internal data (on COGS,
development spend and future SG&A cost) Probability of High probability of
Lower probability of success
development development success
 Companies employ mainly 2 strategies to 50- 75%
success > 95 %
enter the market – Either self develop and
commercialize or in license a in development
molecule and commercialize.