Biopharmaceuticals are one of the fastest growing segments of the pharmaceutical industry, with more than 200 products on the market and over 500 estimated to be in development. Representing approximately 16% of total pharmaceutical sales, biopharmaceuticals had a market value of USD 138 billion in 2010, according to IMS Health.
Furthermore, EvaluatePharma predicts that by 2016 seven of the top ten pharmaceuticals worldwide will be biopharmaceuticals including five monoclonal antibodies.
Biopharmaceuticals are used to treat a wide range of complex and devastating diseases, some of which are life-threatening while others drastically reduce quality of life. Often there is no other available treatment for the condition, which means that biopharmaceuticals can be truly life-saving.
But with aging populations worldwide treatment of chronic conditions comes with a significant financial cost. In 2010 the Swiss Federal Supreme Court ruled that the maximum cost to a health insurer that could be considered reasonable per human life year saved was 100,000 Swiss francs (about USD 100,000). However, this is less than the annual cost of some biopharmaceuticals. Until recently biopharmaceuticals have experienced little competition. But with patents now expiring for many of the first generation compounds, this is changing.
There is a significant difference between the traditional “small molecules” pharmaceuticals and “large molecules biopharmaceuticals”: while the manufacturing of small molecules can be copied and verified as exactly the same product, large molecules are difficult to copy because production is based on or derived from a living organism.
Instead a biopharmaceutical “copy” is called a “biosimilar”. Such a product must be verified as similar in terms of quality, safety and efficacy to the reference biopharmaceutcial medicine with which it has been compared. The first biosimilar products were approved for the European market in 2006 and today 14 biosimilars have been approved in Europe and very few in the US. But there are many products in the pipeline.
Frost & Sullivan have estimated that USD 100 billion worth of biopharmaceuticals will have lost patent protection by 2020. Biosimilars therefore represent one of the most exciting and rapidly evolving areas of product development in the pharmaceutical industry.
While not as discounted as generics for small molecule medicines – which can achieve price reductions of 70-80% – the cost of a biosimilar is currently around 20-30% lower than that of the original biopharmaceutical. According to the European Generic Medicines Association, just a 20% price reduction on five off-patent biopharmaceuticals could save the EU over EUR 1.6 billion per year.
Biosimilars are making treatment of chronic diseases more affordable – which is good news for patients in developing countries, where healthcare costs are often paid outof-pocket, and also for developed markets where healthcare budgets are already overstretched. With more competition in the coming years these costs could drop even lower, making treatment more affordable – and therefore more attainable – for the millions of people around the world in desperate need of these essential medicines.