Biosimilar Insulin Worth The Effort? For Some, Maybe
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With most eyes fixed on the imminent arrival of biosimilar antibodies – billed as the most valuable copy-cat biologics, given originators' high prices – it may be easy to overlook the potential of first-generation biosimilars such as insulin. And issues such as delivery technologies and cost comparisons with marketed products pose particular challenges for biosimilar insulins. But some key players are hoping for advantages in identification with well-known products, an emerging markets strategy, and placing biosimilar products within a range of diabetes offerings, including perhaps most creatively, a range of disease management services. Several high-profile companies have already been lured into the biosimilar game. Among the most prominent recent entrants: Pfizer Inc., via its October 2010 tie-up with India's Biocon Ltd.; GlaxoSmithKline PLC, which the same year secured rights to market Polish firm Bioton SA's insulin in Russia; and generics firm Actavis Group, which is finalizing terms of a joint venture with the same company, for a 50% share of profits on sales of Bioton's insulins in the U.S., EU, Japan and some other countries. The insulin market is substantial: global sales topped $15 billion in 2010 and growth is projected to top $21 billion by 2017, according to Decision Resources. Patents on several of the rapid-acting or regular insulin analogs have already expired in the U.S. and EU, but there's more to come. 2014 will be a bumper year for copycats as Sanofi-Aventis' long-acting Lantus (glargine), the top-selling insulin with €3.5 billion ($5 billion) in 2010 sales, loses exclusivity in Europe, along with Novo Nordisk AS' Levemir (detemir) and rapid-acting Novolog (aspart) (see following chart).
Not The Most Attractive Biosimilar Target Still, at least at first glance, insulin looks a relatively unattractive candidate for biosimilars. At about $5 a day, insulin is cheap, certainly relative to antibody-based drugs like Roche/Biogen Idec Inc.'s cancer-focused Rituxan (rituximab). But insulin is nevertheless complex and expensive to manufacture, and the modern insulins require sophisticated delivery-pen technology for any chance of reasonable uptake, at least in most developed markets. Thus, feasible discount levels for copycat insulin – anticipated at about 25% – don't represent significant savings for most payers nor financial enticement for patients to switch. Those companies firmly entrenched in the diabetes market, including Sanofi-Aventis, Novo Nordisk and Eli Lilly & Co., are heavily committed to the success of their franchises. Most continue to pursue incremental innovation around their insulin analogs, and to combine them with novel treatment alternatives such as the much newer GLP-1 analogs. The incremental innovation may include ultralong-acting insulins such as Novo's Phase III Degludec, but also improvements to production processes that can affect innovators' margins – and thus their pricing flexibility. (Also see "Novo Nordisk: Riding High on Diabetes" - In Vivo, 1 Jun, 2007.). As such, "biosimilars won't be as successful in the insulin market as in other markets," predicted Decision Resources' Donny Wong, director, Metabolic Disorders, at a June 2011 conference in London. Indeed, most of the first generation of biosimilars, including insulin, haven't yet had a huge commercial impact in developed markets. There are a few notable exceptions, including Momenta Pharmaceuticals Inc./Novartis AG's Sandoz copy of Sanofi-Aventis' low-molecular weight heparin Lovenox (enoxaparin), whose $247 million first-quarter 2011 U.S. sales are eating significantly into those of the originator, and EPO in Germany. But by and large in Europe, a mix of prescriber skepticism, ill-adapted health care systems, innovator scare-mongering and insufficient compulsion to switch to cheaper versions have conspired to limit biosimilars' potential savings to payers (Also see "Biosimilars: Nearly The End Already, Or Is The Best Yet To Come?" - Pink Sheet, 20 Apr, 2011.). Biosimilars first broke into Western Europe in 2008 with the EU approval of Sandoz's growth hormone Omnitrope, becoming the first to go through the European Medicines Agency's centralized approval route in 2008. Perhaps tellingly, no biosimilar insulin has yet been approved via this pathway; India's MJ Biopharm Pvt. Ltd. tried to get three of its Marvel-branded insulins through in 2007 but failed due to the poor quality of its submission, and to the fact that its insulins were less efficacious than the comparator original drugs. Thus, for the moment, the closest Europe has to biosimilar insulin are a couple of branded generics in Germany from the likes of Teva Pharmaceutical Industries' ratiopharm division (which sells an old animal insulin) and Berlin Chemie, a German subsidiary of Italy's Menarini Group. Just Part Of The Portfolio Challenges aside, for Pfizer and Actavis, laying a stake in generic insulin is part of a broader strategy aimed at offering better-value drugs across diabetes more generally – and even beyond. In its deal with Biocon, Pfizer secured exclusive global rights to biosimilar versions of recombinant human insulin, glargine, aspart and lispro (Lilly's Humalog) in exchange for $200 million upfront and up to $150 million in development and regulatory milestones, plus further potential sales-linked payments (Also see "Pfizer Teams Up With Biocon In Bid to Dominate Global Biosimilar Insulin Market" - Pink Sheet, 18 Oct, 2010.). While the deal is the largest ever signed by an Indian biotech, Pfizer isn't betting the farm on this opportunity. Milestones are back-end loaded, and most of the risk remains with Biocon, which is responsible for development, manufacturing, supply and approval. Still, Diem Nguyen, Pfizer's general manager, Biosimilars, Established Products Business Unit, was clear on the opportunity that this tie-up represents for Pfizer – and how it can stand out relative to competitors. "We'll be able to offer endocrinologists a portfolio of products that will be cost-effective," she said. Pfizer's own portfolio includes a metformin generic that has been launched in India, as well as other innovative pipeline programs. And that portfolio won't necessarily be limited to diabetes – it may include other, related areas such as cardiovascular disease. "It's rare that a patient suffers only from diabetes," Nguyen observed, citing the growing incidence of metabolic syndrome. Innovator companies like Pfizer and Merck & Co. Inc. hope to position their biosimilars as both cost-effective and high quality, thanks to their association with a well-known brand. Stamping Pfizer's name on Biocon's insulins in markets such as India may help overcome some of local physicians' reluctance to prescribe biosimilar insulin, suggested Decision Resources' Wong. "Local Indian manufacturers only have about 15% of the insulin market," he observed, "because doctors don’t trust them." But price sensitivity is high in such markets, since a lot of patients have to pay out of pocket. As such, the Pfizer-Biocon tie-up could be a winning combination not only in India but in other emerging markets as well. Emerging Markets Not So Device Sensitive Emerging markets are the first wave of opportunity for Pfizer and Biocon, due to the timing of patent expiration dates. The partners plan to launch insulin and glargine in India in the coming quarter (Also see "Armed With A Range Of Insulins, Pfizer Is Weeks Away From Its First Biosimilars Rollout In India - BIO 2011 Conference" - Scrip, 30 Jun, 2011.). Launching in markets such as India first lowers another hurdle to insulin success: having the right device. In the innovator segment, Novo in particular has differentiated itself not just with its range of insulins but via its delivery-pen devices – a key determinant of commercial success in a market where even some of the sponsors themselves readily admit that the product substances are relatively similar to one another. Pfizer's Nguyen acknowledged the importance of devices in the developed world insulin segment but also pointed out that in many emerging markets, including India, the majority of patients still prefer the older vials and syringes. Still, biosimilar insulin "is a global opportunity," asserted Nguyen, reflecting the geographic scope of the deal with Biocon. The partners will need a competitive device to compete in developed markets. In those markets, "if you launch with a bad delivery device, the product is unlikely to get used," warned Andrew Merron, director, Biosimilar Advisory Services at BioTrends Research Group, part of Decision Resources. Pfizer is apparently "evaluating multiple opportunities" regarding delivery pens; "we have many pens in development in our portfolio more broadly," affirmed Nguyen. The company has experience in a similarly device-driven market, growth hormone, where it sells Genotropin (somatropin). Meanwhile Biocon expects to launch a reusable insulin pen, Insupen, by the end of the next quarter, the company said during its July 21 earnings report. Pfizer's broader in-house biosimilars portfolio, like those of several other innovators entering the game, is largely skewed towards monoclonal antibodies, the more obviously lucrative targets (Also see "And Now For The Real Biosimilar Opportunity: Antibodies And Complex Biologics" - Pink Sheet, 27 Jun, 2011.). But the fact that Pfizer didn't choose to develop its own insulins in-house (it would have anyway come along far too late for most key patent expiries: it only joined the biologics party in 2009 after its acquisition of Wyeth) "doesn't mean insulin is a less attractive opportunity than antibodies," Nguyen insisted. According to her, the insulin market is plenty big enough to accommodate several players, notwithstanding the strength of the incumbents. "We need to provide choices to our patients, as opposed to just looking at the same suppliers," she argued. "We wouldn't be pursuing [biosimilar] insulin if we didn't believe it was attractive and that we could differentiate ourselves." Actavis Envisions One-Stop Diabetes Shop Actavis' CEO Claudio Albrecht, like Nguyen, sees biosimilar insulin as "a great opportunity." His vision resembles Pfizer's, even though Actavis is a pure generics player. Like Pfizer, Actavis is coming late to the party, and thus is seeking a tie-up with a more advanced partner. For Albrecht, accessing biosimilar insulin – which it expects to do any day now, via its Bioton deal – is a means to complete an already large portfolio of generic oral diabetes therapies, thus allowing the group to present itself as a one-stop diabetes shop. The deal will see Actavis pay €50 million to €70 million in installments to Bioton, which will transfer certain rights and distribution licenses to insulin products – including the more modern insulin analogs – to the joint venture, in which the partners will equally share development costs and profits. Albrecht's confidence stems in part from the fact that Bioton's insulin has been on the market in Poland for over 20 years, and thus has a safety and efficacy data trail that is unusual for a first-generation biosimilar; indeed the lack of such clinical data is one further reason other biosimilars failed to take off elsewhere in Europe. He also outlines his company's "real advantage" in having a pen device to deliver the insulin, and, "perhaps more importantly," the fact that Actavis has a wide range of chemical diabetes drugs in its portfolio or in development. "We'll be able to offer a full choice and a one-stop shop in diabetes," Albrecht enthused, pointing to the forthcoming patent expirations of several glitazones (generic versions of Takeda Pharmaceutical Co. Ltd.'s Actos (pioglitazone) will appear in 2012), and the potential to offer diabetics cheaper metformin-based drug combinations. Details of the delivery pen are under wraps because of a confidentiality agreement with the manufacturer, but "we are confident that we can offer a device which is not missing any functional feature and will take into consideration that pens have to reflect a certain lifestyle element,” said Albrecht. Assuming it finalizes the Bioton deal, Actavis doesn't expect the European regulators to approve its biosimilar insulin before 2014. But already, the company's ambition spreads beyond, to diagnostics and blood sugar monitoring devices too, akin to Sanofi- Aventis' "holistic" ambitions in the space (Also see "Sanofi-Aventis Enters Diabetes Pact With AgaMatrix For Blood Glucose Monitors" - Pink Sheet, 31 Mar, 2010.). "We are negotiating with blood sugar monitoring machine manufacturers," he told "The Pink Sheet, saying the company would like to provide certain services as well as a full product range. Bundling Biosimilars By becoming "the first company to offer a complete package of generic diabetes drugs" – including insulin – Albrecht believes Actavis will gain an advantage in its negotiations with payers. Many are becoming more open to negotiating with single providers around full disease management packages – bundled products and services – and that can mean better deals all round. Germany's new pricing and reimbursement law contains a special provision allowing companies to negotiate full disease management packages with insurance funds, according to Albrecht (Also see "New German Reimbursement Process Splits Opinion Ahead Of First Assessments" - Pink Sheet, 25 Jul, 2011.). The potential of bundling cheaper insulins with other agents hasn't escaped innovator companies, either: Lilly's basal insulin analog LY2963016, part of the company's January 2011 diabetes tie-up with Boehringer Ingelheim GMBH, is a "new insulin glargine" product – a biosimilar, in other words – that will complement other drugs within the portfolio (including a "structurally novel" basal insulin, likewise due to enter Phase III during 2011) (Also see "Lilly/BI Eye Diabetes Leadership In Expansive Risk-Sharing Collaboration" - Pink Sheet, 11 Jan, 2011.). Such defenses make sense, particularly since innovators may find that a first biosimilar leads to cross-product erosion, warned Decision Resources' Merron. "If generic Lantus became available, it might switch patients not just from [branded Lantus] but from other insulins [such as Novo's long-acting Levemir] as well, because of cost," he suggested. It's unclear quite how widespread such a practice would be in reality. But it may be unwise for innovator companies to get complacent about the threat posed by biosimilars, even the first-generation drugs."When chemical generics first arrived, 30 or 40 years ago, there was reluctance [among prescribers]. It takes time to build trust," reflected Actavis' Albrecht. And that's why, in his view, the market share achieved by the first generation of biosimilars "isn't so bad. Over time, [market] shares will grow," he predicted. |
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