Over 150 biological drugs are currently available in the United States, with many more in the pipeline, providing treatment for common diseases through to rare genetic conditions. Although many biological products have been used for decades (such as insulin, somatostatin, erythropoietin, and interferon), newer and more expensive treatments (notably monoclonal antibodies) are becoming available for a rapidly growing range of diseases. The newer biological therapies are among the most expensive drugs available. Many factors contribute to such high costs, including the complex manufacturing processes, high costs of research and development, the huge perceived value of such drugs to patients, and the fact that there is less competition in the marketplace to drive down prices. In-hospital costs of administering the largely parentally administered drugs, subsequent additional travel costs of patients to receive treatment, and costs of monitoring and managing adverse events (such as infections) also contribute to the overall expenditure.

Demand for these therapies is enormous, as both patients and doctors seek to improve health outcomes in difficult-to-treat diseases. Pressure is now growing to use biologicals earlier in disease progression rather than reserving their use for disease that is refractory to cheaper traditional therapies. Clinicians are prescribing biological therapies at increasing rates. Average US annual sales growth in revenue for biologicals was 20% between 2001 and 2006, compared with overall drug market growth of only 6%–8%. Worldwide sales of major cancer antibodies increased by 48% from 2006 to 2007, capitalising on these new opportunities, drug companies have shifted research and development resources to focus on lucrative biological drugs, and over 500 biological therapies are currently in clinical development.

The introduction of cheaper ‘biosimilar’ versions of biological drugs could potentially greatly reduce costs and increase access to treatment. Potential cost reductions with biosimilars are estimated at 18%–50%.

Hurdles
Several important hurdles are faced by potential generic manufacturers of biological therapies, leading regulators in the US and Europe to conclude that it may never be possible to create a true identical generic biological drug. Biological drugs are usually produced from a proprietary bank of living cells (mammalian, bacterial, or yeast). Even the smallest variability in production conditions can lead to important differences in the final product’s efficacy or safety profile, and this may be difficult to detect. Furthermore, the cell lines are the protected intellectual property of the originating drug company and are therefore not available to potential generic competitors. Thus reproducing the successful business model used by traditional generic manufacturers may prove difficult. Commercial viability of biosimilars depends on reasonable development costs, but these increase exponentially if clinical trials are required to prove equivalence. Interchangeability, whereby a branded drug can be automatically substituted for its biosimilar counterpart, is also fundamental to ensure sufficient sales. However, such interchangeability is contentious.

According to Mr Kelly and Dr Mir, industry regulators need to encourage competition and find a new model for pricing drugs, while clinical research could contribute to improving the cost-effectiveness of new biological treatments.

They conclude that biosimilars are becoming an increasing reality. Biosimilar human growth hormone, erythropoietin, and granulocyte-colony stimulating factor are now available in Europe. Efforts need to be focused on introducing careful legislation to facilitate competition. Issues such as lack of trust in biosimilar drugs by prescribers and patients, plus the absence of interchangeability for biosimilar drugs in many markets is holding back growth in Europe. Policies are needed to improve confidence in equivalence without compromising patient safety. However, patent protection on most top-selling biological products is still valid for at least another five years, limiting the speed and extent to which real financial benefits can be gained. A concerted effort is required to ensure that legislation is in place to create a favourable environment for development of biosimilar products once patents expire.

References:
Christopher Kelly and Fraz Mir in BMJ 19 September 2009 Volume 339, p.666-9, Biological therapies: how can we afford them?