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Analysis: Copycat biotech drugs slow to take off in Europe

By Ben Hirschler

LONDON (Reuters) - Despite austerity-driven cuts across European healthcare systems, most countries have been slow to embrace a new class of medicines that could save them billions of euros - copies of biotech treatments.

These cheaper versions of expensive biotech drugs, known as biosimilars, could slash the cost of treating diseases like cancer and rheumatoid arthritis in the same way that generics have curbed spending on traditional medicines.

But although Europe has pioneered their path to market - approving the first biosimilar drug in 2006 and the latest, an antibody drug from U.S.-based Hospira and Celltrion of South Korea, in September - uptake has been patchy.

Generic industry executives admit the market has been slower to develop than initially hoped, and a number of firms have hit snags in developing the complex new products.

Some cost-conscious health authorities are also frustrated and are seeking ways to stimulate use as a big cost-saving opportunity opens up with the expiry of patents on drugs made from laboratory-engineered antibodies.

Norway hopes to kick-start uptake of these products by funding clinical studies in which patients will be switched from original drugs to biosimilars in order to reassure doctors that the copycat versions are just as good.

"From all the evidence to date, we don't think there should be any problems but doctors tend to be reluctant," said Steinar Madsen, medical director of the Norwegian Medicines Agency.

The 2014 Norwegian studies will compare Johnson & Johnson's and Merck & Co's Remicade drug for rheumatoid arthritis - which sold more than $2 billion in Europe last year - to Hospira and Celltrion's new copy, Inflectra.

LIVING CELLS

Inflectra is being launched first in Norway, Portugal Ireland, Finland and eastern Europe, with major European markets delayed until early 2015 due to patent issues.

The results of Norway's government-backed research will be watched closely in health ministries across Europe, even though Norway, with a population of just 5 million, is a tiny market.

The reason is simple: injectable biotech drugs are among the most expensive on the market and their use is growing fast. They cost tens or even hundreds of thousands of dollars a year per patient, representing a vast pool of potential savings.

But creating copies of protein and antibody drugs is tricky because they are produced in living cells, bringing inevitable unpredictability. As a result, copies can only ever be "similar", not exact replicas.

In theory, the use of biosimilars could produce savings of up to 33.4 billion euros ($45.5 billion) by 2020 across Europe, according to a study last year by researchers at the health-focused IGES Institut in Berlin. Antibody drugs alone could contribute savings of 20.4 billion, the IGES analysis found.

In practice, the pace of savings may be a lot slower, reflecting caution among doctors, as well as the small number of manufacturers competing in the biosimilar space and the modest 20-30 percent price discounts on offer.

Prices for traditional generic drugs, by contrast, are often 90 percent less than the original product.

Healthcare information firm IMS Health believes the global biosimilars market might be worth somewhere between $11 billion and $25 billion in 2020, equivalent to a modest 4-10 percent of total biotech drug sales by that time.

Today, with European sales patchy and the United States yet to finalize regulatory rules, biosimilars account for less than 0.5 percent of biotech drug spending in developed markets.

Slow-burning biosimilars are good news for big makers of branded biotech drugs, like Roche, which can expect patent "slopes", rather the "cliffs" seen with traditional drugs that lose nearly all their sales as soon as patents end.

"For branded companies, this has been a marginal threat so far. It has been a mid-summer fly that you have to wave away occasionally but which doesn't actually sting," said Andy Smith, chief investment officer at fund manager Mann Bioinvest.

And even though Europe now has a clear path to market for biosimilars there can still be significant delays, as seen with Roche's blood cancer and arthritis drug Rituxan, or MabThera.

After initial forecasts of copies this year, a biosimilar form of Rituxan is not now expected before 2016.

CLINICAL TRIALS

One of the problems for developers has been finding enough patients to take part in the clinical trials that are required to win approval for biosimilars. In the case of Rituxan, this has meant trying to persuade patients to enroll in a study testing a lookalike drug at the same time as Roche was recruiting for studies of a new, improved form of its drug.

The need for trials means that biosimilars cost $100 million to $200 million to bring to market, against less than $5 million for a traditional pill-based chemical drug, said Paul Greenland, Hospira's vice-president for biologics.

That is a hurdle for smaller generics firms, leaving the field to a few players like Hospira, Novartis' generics arm Sandoz and Teva Pharmaceuticals, along with a few brand sector interlopers, including Pfizer.

Usage in Europe remains inconsistent between countries. Penetration has been fairly high in Germany, which historically uses a lot of generic drugs, but different medical systems mean it is far slower in Britain, another big generics market.

It also varies a great deal between products.

Biosimilar versions of granulocyte colony-stimulating factors (G-CSFs), given to treat low white blood cell counts in patients after chemotherapy, are the most widely used, with penetration rates of more than 50 percent, while copies of anemia drug erythropoietin (EPO) have around a third of the market and human growth hormone some 10 percent.

When it comes to antibodies for treating long-term chronic conditions like rheumatoid arthritis, Hospira's Greenland acknowledges that winning market share may again be slow. ($1 = 0.7345 euros)

(Editing by Philippa Fletcher)

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