From India's perspective,
we must first understand that the opportunity for Indian biosimilar
players is in four key growth segments of products, services,
technology and applications
When we say biosimilars, we tend to think about products and services
segment, however, we seem to forget the applications and technology
development segment. Some of the examples include:
recombinant glycosylated proteins, recombinant non-glycosylated
proteins and others.
development, contract research, manufacturing services and clinical
Oncology, infectious diseases, chronic and autoimmune diseases, and
other diseases which are typical to Indian genome which incidentally
contains Indo-European, Dravidian, Tibeto-Burmese, Austro-Asian and
covers almost 65 percent of world's population that has 90-95 percent
similar Indian genotypes.
Recombinant DNA technology, monoclonal antibodies technologies, protein
sequencing, bioassay, chromatography, nuclear magnetic resonance, and
In order to gain a fair share of the global biosimilars products,
services, technology and applications market, Indian biosimilar players
would need to invest heavily in creating alliances and discovery.
Looking at the biopharma patent expiries, Epoetin, Human Insulin, Human
Growth Hormone (HGH), Colony Stimulating Factors (CSFs), Interferon
Alpha and Beta are the key products that would offer huge opportunity
if Indian players are able to manage the time to market. While there is
still unclear regulatory hurdles that Indian players would need to
clear in the US and Europe, players who are able to pre-empt would be
successful in these major markets. Let us not forget that in the
biosimilars services space, India does have the advantage over other
Asian countries such as China, this is fast diminishing and eroding.
Indian companies likely to succeed in the biosimilar market need to
have an appropriate marketing structure as well as the financial
resources to develop the products and to accept higher upfront risks in
development, commercialization and capital investment.
for Indian players
The process to develop a biosimilar -essentially generic version of
biopharmaceuticals – is more complex than that of developing
a generic copy of a chemical-based compound. The regulatory pathway is
not completely finalized both in the US and EU which are the largest
markets for biosimilars. Apart from the regulatory and clinical
development hurdles that are costly and time consuming, Indian players
need to upgrade their capabilities as their organizations mature. Some
of these include joint venture and alliance management for
collaborative research, contract research, contract manufacturing,
developing technology transfer management, marketing arrangement for
biosimilars globally, to name a few.
The biosimilar market will be characterized by price competition, even
when there is only one or a very limited number of players for
biosimilars. This will constrain the commercial opportunity. Even a
small price difference reduces the incentive to switch. The consensus
seems to be that a 20-25 percent discount is optimum to increase the
switch back. Hence the ability of the Indian players to be
cost-competitive producers of biosimilar products, services,
applications and technology will enable them to lock in the customer
and the final consumer.
The required capital investment and operating costs of manufacturing
will be much higher for biosimilars than for generic drugs. Some of the
key players in India have been able to raise capital on the global
scale, however, with the recent downturn, the ability of Indian players
to sustain and raise capital seems suspect given their leverage and
capacity to raise funds.
Several potential biosimilars face competition from second-generation
products with more convenient administration schedules. In many cases,
the same biopharma or large pharma companies market the original and
second-generation products and there may not be a marked difference in
price. This would completely erode the incentive for Indian players to
launch products that are price competitive, given their R&D and
development investment loading.
Improved delivery devices can add significant value and enhance product
differentiation. There are, however, a limited number of drug delivery
companies, many of which are already working exclusively with the
branded incumbents. This would restrict the options for Indian players
trying out newer delivery systems as part of the differentiation and
into EU and US
Entry barriers are relatively low and there tends to be severe price
competition from several generic competitors reducing sales
significantly after the first year of presence in the market. It is not
clear if there will be enough biologic candidates for a company that is
focused on launching biosimilars to sustain growth. There are not
enough possible biosimilars for a company to rely on these alone to
launch a new product every year. Biosimilar players will therefore need
to adopt different business models and skill sets from those of
conventional generics companies.
Other regions that Indian players can target include countries like
Japan, Canada, Mexico and Latin America.
Many countries are now realizing the need for biosimilar regulation to
control and manage the growth of biosimilars in their country. Around
15 to 20 countries have put in some sort of guidelines in place. These
countries are in the race and also potential competition to Indian
The author has over 20 years of industry and consulting
experience of connecting the healthcare and life sciences
value-chain from early drug discovery, drug development, care delivery,
healthcare providers, intermediaries to payors.