India: An Emerging Market for Biosimilars

By Neha Mittal & Akriti Kapoor

Posted: 25th November 2015 11:57

The Pharma World, in the mid-1990s, revolutionised the healthcare sector-globally as well as in India, by introducing the next big thing to market; wonder drugs known as Biologics; a new generation of bio-therapeutics in terms of large complex molecules that provide a cure to major life-threatening diseases.  In 2007, the biologics market witnessed an expeditious growth rate of around 20% generating striking sales revenue as enormous as $95 billion amounting to nearly 15% of global pharma revenues (Blackstone, et al, 2012).  Scientists around the world started analysing their potential in making generic versions of these large complex products.  Since most of the Biologics going off patent by 2020 that amountto global sales of more than $67 billion.  It has caught attention of a plethora of both global and Indian players in the healthcare sector, towards the development of similar version of these Biologics known as Biosimilars.
 
A “Biosimilar” is a biological product that is highly similar but not same to the original biological product i.e. the “Biologics”.  A Biosimilar is clinically similar to Biologics in terms of safety, purity and potency.  The biggest challenge for Biosimilar producers is to manufacture it at a “lower cost” as compared to the Biologics.  The Ministry of Health in India strives to provide its citizens quality health care at affordable costs for which it encourages the innovators to produce essential drugs in sufficient quantities to meet the ever-increasing demand for pharmaceuticals.  As a result, the Indian Health Ministry focuses on maintaining a balance between the requirements of the society while simultaneously ensuring market growth.  The poor availability of pharmaceuticals and unknown health issues of small chemical drugs have fostered the Indian generic industry to tread into multimillion dollar strategy for developing Biosimilars in India.
 
Emergence into the Indian Market
 
Biosimilars were launched in India during the onset of the millennium 2000; even before they ventured their way into developed markets of US and Europe.  It was only in 2006 that Biosimilars entered the European market and very recently in USA.  There are more than 30 biotechnology companies who have shown their presence in the Indian Market as potent Biosimilar producers.  Some of the big names include Wockhardt, Biocon, Intas Pharmaceuticals, Panancea, Reliance Life Sciences, Virchow and Dr. Reddy’s Laboratories.
 
Commitment between Health and Revenue
 
For Healthcare purchasers and Health Ministry, Biosimilars offers an equivalent, yet more affordable alternative to Biologics.  Biologics have grown exponentially in the last decade.  In recent years, pharmaceutical industry is emphasising more on biotechnology and this may be attributed to the safety of Biologics as compared to small chemical molecules.  The similar version of these Biologics enters into market only after successful clinical trials and after establishing equivalence in terms of safety, efficacy and quality with respect to the original Biologics and thereafter attaining regulatory approvals; making Biosimilars the preferred choice and acceptable substitution in generic drug industry over small chemical generic molecules. 
 
Having dominated the Generic Drug industry for several decades now, India is a fast running player in this race to make copies of complex bio-therapeutic drugs, and is expected to generate sales, worth billions of dollars in the coming years. 
 
It is estimated that the cost used to develop a chemical generic moiety is approximately $1 to 5 million but for developing a Biosimilar, the cost can go as high as $200 million in the highly regulated markets.
As reported by a recent HSBC report; Biosimilar sales grew at the rate of 20% annually to approximately Rs 2,000 crores or 2.5% of the overall market sales at the end of November 2014.  Also, according to analysts, sales margins on Biosimilar drugs range from 20% to 80%.  Naturally, export of these Biosimilars from India to regulated market brings on table exorbitantly high profits and enormous revenue generation in the healthcare industry, thereby boosting stock market valuations of India. 
 
The Indian market accounts for about 60 approved biologics today, of which more than half are Biosimilars.  The sale was expected to expand at a 14.5%compounded annual rate through 2020 according to a Livemint report which estimates India to become a $55 billion Pharmaceutical market by 2020. 
 
India is ready
 
“With the advancement of Biotechnology; India is all set to dominate the Biosimilar market.”  To develop a Biosimilar in India, the estimated investment required is about $10 to $20 million with a time period of four to six years as compared to $50 to $100 million and more than eight years in developed countries.  Taking advantage of this pricing difference, it is anicing on cake situation for Indian generic players to offer their products at almost 40% cheaper price than original Biologics.
 
The Indian Pharma Market reflects different trends for block busters, generics and personalised drugs.  Generic drugs, especially the branded ones have shown a great depth of their presence in both developing as well as developed markets.  Further, there has also been a considerable increase in ‘In-licensing’ and ‘Out-licensing’.  Joint ventures like Mylan and Biocon; Merck and Reddy; Cipla and Hetero have successfully left a positive essence on the Indian Generics.  Shorter time to market and the ever-increasing demand for low cost products is constantly pushing the pharma industry towards semi-regulated markets.  India being a hub of contract research, affordable labour, highly educated manpower and efficient workplace is attracting massive foreign capital from the developed countries.  It can be rightly said that with considerable time, competent atmosphere and adequate financial resources for preparing Biosimilars, India is preparedto outshine as a capable market leader in Biosimilars as well.
 
India being a pharma-emerging sector is now considered by the Pharma Industry worldwide as a major potential market, which is steadily stepping into a world of large molecules.  India is also a famous centre for conducting global clinical trials with its shares rising from 2% at present to 5% in 2012.  The credit goes to low cost, large and diversified patient pools, easy recruitment, strong government support, availability of specialised doctors, trained investigators, and a gradual strengthening of the IP environment.
 
Recently, in June 2015, Pharmaceutical major Intas became the first company to launch a Biosimilar version of Lucentis in India, costing about 25% cheaper to the consumers than the imported Lucentis.  Similarly, in August 2015, Hetero launched its Biosimilar Rituximab in India.  Ranbaxy is not far behind.  They launched the first biosimilar in India under the name Infimab, theRemicade (Infliximab) biosimilar.  Other Pharmaceutical players like Lupin, Cipla and Teva are also in the pipeline.  The rate, at which the pharmaceutical companies are venturing into the Biosimilar business, makes it evident that India is all set to capture the generic world of large molecules owing towards its proactive nature towards Health Industry. 
 
Neha Mittal
Principal Associate
Ms. Neha Mittal, has a work experience of approximately 10 years in the pharma field with utmost exposure to chemistry stream.  Her career spans around working with some of the best names in the pharma industry, such as Ozone Pharmaceuticals, Sphaera Pharma (Singapore Subsidiary), Jubilant Chemsys Ltd. and Mankind Research Centre.  She has done her PG Diploma in Patent Laws, MBA in Project Management-Government Affairs and M.Sc. in Industrial Chemistry.
 
Akriti Kapoor
Associate
Ms. Akriti Kapoor has done her LL.B (Hons. in Intellectual Property) from Rajiv Gandhi School of Intellectual Property Law, IIT Kharagpur.  Prior to that she completed her B.Tech (Biotechnology) from Amity University, Noida.  Her LL.B thesis project involved work on Compulsory Licensing and the Right to Health.  She has also co-authored an International Research paper titled “Oncoprotective role of chelation therapy in hypoxic solid tumors” which was published in 2012 in the International Journal for Biosciences, Biochemistry and Bioinformatics. 
 
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