Manufacturing Costs Will Be Critical to Biosimilars’ Success

Attaining low costs is critical for biosimilar manufacturers to support discounts and defend against competition

By Ronald A. Rader, BioPlan Associates Inc.

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Biosimilars have finally entered major markets, including the U.S., and are starting to have an impact on the current approximate $200 million biopharma products market. This includes four biosimilars approved in the U.S., while the European Union (EU) has already approved over 20 biosimilars, including some that are capturing big market share from their reference products.

Big (Bio)Pharma companies — those with the most number of biopharmaceuticals for whom filling out portfolios with biosimilars is not a major challenge, are the early leaders in biosimilars development, manufacture and approvals, particularly in Europe. However, while a small number of current major players dominate these earliest product launches, there are a hundreds of companies worldwide developing biosimilars targeting diverse markets, ranging from major Western market countries to the poorest developing countries [1,2]. More biosimilars competition, more products, will becoming in most every country and biopharmaceutical market niche.

But many companies developing biosimilars ultimately targeted for Western markets are slow with their product development. Some are letting others blaze the regulatory trail with analytical, clinical trials, regulatory approval and marketing. The biosimilars pioneers are also spending substantial resources on biosimilars-related patent disputes. Others are waiting for more approvals and finalization of regulations, especially by FDA, or want more regulatory guidance concerning interchangeability. These biosimilars are very attractive, because they will essentially be A-B generic drug products with full interchangeability and substitution at the prescription/pharmacy level. These products will not require marketing as branded products, as most generic equivalent drugs are sold with no brand marketing at all.

VERY HEALTHY PIPELINE
Despite the delays, many more biosimilars, and new players, will soon be entering markets worldwide as more legacy reference products go off-patent.

The biosimilars pipeline is healthy. BioPlan’s Biosimilars/Biobetters Pipeline Database (www.biosimilarspipeline.com) currently reports more than 750 biosimilars in various stages of development [1]. The number of biosimilars for major reference products are shown in Table 1. Soon enough, we can expect the number of marketed biosimilars to exceed the innovative biopharmaceuticals. At present, the largest portion of biosimilars are cancer therapeutics, with 482 different biosimilars in the pipeline. More than 100 biosimilars are now in clinical trials. In addition, 277 are either mAbs or fragments. Gaining major market biosimilar approvals is proving to not be too difficult and with negligible development failures so far, a higher percentage of these products in the pipeline can be expected to enter world markets compared to innovative biopharmaceuticals.

Even removing from consideration as ‘biosimilars’ about 200 lower-end (non-GMP) ‘biogenerics’ targeted to lesser- and non-regulated international markets, there are a large number of products in development, with the vast majority targeting the U.S market. This includes biosimilars for nearly every current biopharmaceutical product.

CURRENT LOWEST COSTS FOR BIOSIMILARS APIs
Having low(er) costs for biosimilars manufacturing will be critical. The point of biosimilars is to provide cheaper alternatives to off-patent innovative reference products. Biosimilars must be priced at a discount relative to their reference products, currently ≤30 percent, in Europe; but likely to increase to 50 percent or more, eventually, in the U.S. Biosimilars must also compete with other biosimilars, with 10 or more for each major reference product likely in major markets. Plus they must compete with biobetters and other innovative products targeting the same indications. So there will be a lot of competition, much of it on the basis of prices. Pricing of biosimilars may not always be rational (by conventional biopharma standards). Some developers are expressing intentions to low-ball their prices to capture market share. Others will be interested in protecting or growing their product portfolios and may bundle sales. Competition on prices could well become more extreme as interchangeable biosimilars enter world markets, with these competing directly with the earlier branded biosimilars.

BioPlan Associates recently evaluated costs associated with biosimilars API manufacturing. Bioprocessing professionals with biosimilar developers pre-qualified as knowledgeable concerning bioprocessing costs were interviewed regarding their views on costs currently attainable with biosimilars API manufacturing, particularly monoclonal antibodies. We also evaluated types of manufacturing approaches and facilities most suitable for low costs commercial manufacturing; and what that cost would be for a “typical” mAb biosimilar. As a basis, we presumed that a minimum of 100 kg/year of mAb is required once manufacturing has ramped-up, such as 3-5 years after launch.

Today, biosimilar manufacturing facilities include:
Big (Bio)Pharma 10,000+L bioreactor-anchored facilities
Smaller, flexible single-use facilities
Stainless-steel facilities, mid-scale
Stainless-steel facilities, very large-scale; and
New facilities in developing regions

Table II shows general consensus data collected from interviews. Not unexpectedly, the very lowest costs for biosimilar mAb GMP manufacture were reported for facilities operating the very largest scales using stainless steel. This particularly includes Big Pharma legacy facilities with multiple 10,000 L bioreactors. These are followed very closely by the new super-sized facilities coming online — Samsung Biologics and Celltrion, both in S. Korea. The very lowest costs attainable at Big Pharma facilities were reported to be about or slightly below $100 for legacy large-scale facilities. Costs are reported to be just a few percent more for the totally new Korean super-sized facilities.

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