A presentation by Dr Jenny Hao, a pharma operating partner with Converge Partners at the Festival of Biologics meeting in Basel, Switzerland in November 2021, highlights the interest Chinese biosimilars producers have in Europe and the challenges they face.
According to Dr Hao and based on experiences with real cases, the challenges that Chinese companies have to face to bring biosimilars to EU are mainly clinical
development and commercial opportunities/competitiveness [1].
1. Clinical development
– For global trials, typically outsourced to contract research organization (CRO), with longer time for China approval and launch
– With China trials only, it leads to issues with additional investment in clinical studies for Europe and payment terms for licensing agreement
Additional clinical development for Chinese companies and potential EU partner is needed to receive European Medicines Agency (EMA) approval, this is an investment and risk-sharing relationship.
For Chinese companies, they primarily have a focus on domestic market and rely on EU partner to manage everything (clinical, regulatory and commercial); and they do not want to share development cost, but upfront payments are expected.
The justifications to this are:
• Fund new clinical programmes
• Intensified competition at home
• EMA approval will elevate standing in China
For potential EU partners, they usually are willing to take the risk and invest to get the product through EMA approval, but are unwilling to make upfront payments, and there are some concerns with Chinese manufacturing GMP.
The justifications to this are:
• Source quality products with lower costs
• Expand portfolio and build up capabilities
• Leverage existing sales network
2. Commercial Opportunities/Competitiveness
A few challenges dominate the biosimilars market in Europe
– Big players and strong competition in European biosimilar markets
– Price erosion and tenders
– Product development of Chinese biosimilar candidates is behind the competitors for EU market, relatively
The European biosimilars markets are very competitive, with the intrinsic cost and price challenges.
For Chinese companies, the supply chain is not optimized; the manufacturing cost is too high to support competitive pricing at launch in Europe, and it takes time to improve efficiency.
For potential EU partners, they are unable to compete in certain market segment, they need to factor in price erosion over time, and may eventually be unable to make it a feasible business.
Both the Chinese companies and their potential EU partners need to work hard and deep to understand market potential and to develop thorough forecasts in order to make a dynamic agreement.
Between 2013 and 2017 the market for biologicals in China almost tripled. Though, according to a report, the market for biologicals in China has already grown three-fold between 2017 and 2021 and could grow five-fold over the next 10 years, which could drive biosimilars growth, the market growth for copy biologicals in China is expected to increase the accessibility and affordability for biologicals in China [2]. This also means that these copy biologicals companies in China have the potential of cross-border expansion of biosimilars into the international markets.
Editor’s comment
European Medicines Agency regulatory requirements ensure the same high standards of quality, safety and efficacy for biosimilars as for originator biologicals, and also include a rigorous comparability exercise with the reference product but they are not universally accepted by regulatory bodies outside of the European Union (EU). It should be noted that ‘copy biologicals’ approved in China might not have been authorized if they had been subjected to the strict regulatory processes required for approval of biosimilars in the EU.
Related articles
China–EU market expansion for biosimilars
Pathways for Chinese pharmaceutical companies to enter EU markets
Chinese biosimilars (copy biological) in European markets
Challenges facing copy biologicals in China
First Chinese biologicals maker receives EMA GMP certification
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References
1. International Commercialization of Biosmilars. Focus on Chinese biosimilars entering European markets. PowerPoint presentation Jenny Hao. 9 November 2021, Basel, Switzerland.
2. GaBI Online - Generics and Biosimilars Initiative. The future of copy biologicals in China [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2022 May 6]. Available from: www.gabionline.net/reports/The-future-of-copy-biologicals-in-China
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