The Tortoise and the Hare: Evolving Regulatory Landscapes for Biosimilars

The Tortoise and the Hare: Evolving Regulatory Landscapes for Biosimilars

TIBTEC 1314 No. of Pages 14 Review The Tortoise and the Hare: Evolving Regulatory Landscapes for Biosimilars Chamindika S. Konara,1,2 Ross T. Barnar...

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TIBTEC 1314 No. of Pages 14

Review

The Tortoise and the Hare: Evolving Regulatory Landscapes for Biosimilars Chamindika S. Konara,1,2 Ross T. Barnard,1 Damian Hine,2 Evan Siegel,3 and Vito Ferro1,* Challenges in demonstrating interchangeability and safety, as well as the ongoing evolution of regulations governing biosimilars, have meant that the development of the biosimilars industry has not been, and will not be, a carbon copy of the generics industry. Complexity in the development process reduces the cost advantages for biosimilars that generics offer over originators. There has been a marked difference in the number of biosimilars approved by the European Medicines Agency (EMA) and US FDA[3_TD$IF] due to a lack of consensus and the different rates of progress in establishing both law and stable evidence-based regulatory guidelines for biosimilars. In this review, we provide a précis of the history and status of the regulatory regimes in the USA and Europe. Included is an assessment of market and nonmarket factors that may continue to influence the development of the biosimilars industry.

Trends After a burst of activity from 2006 to 2008, EMA approvals of biosimilars has slowed. FDA released new guidances from 2013–2015 and approved its first biosimilar in 2015. [5_TD$IF]Despite recent regulatory progress, the field is still problematic. ‘Biobetters’ may yet emerge as a more attractive alternative for biologics developers.

The Race to Market for Biosimilars Within the next decade, the biologics market is expected to grow rapidly, continuing to expand its share of the entire pharmaceuticals market [1]. Within biologics, the biosimilars market is expected to generate US$4–6 billion in 2016, or 2% of the US$200–210 billion in spending on biologics, and US$10–25 billion by 2020 [2]. This growth has been helped by both the increasing acceptance of biosimilars globally and evolving regulatory pathways [3]. The biosimilars industry is entering a crucial juncture, because from 2012 to 2019, patents of originator or novel biologic drugs accounting for global sales close to US$60 billion will expire [4]. This is driving all-time-high research and development investments within the biosimilars space [5]. Analysts predict that 99% of the biologic drugs that are coming off patent by 2017 have biosimilars currently being developed or marketed [5]. At present, more than 420 biosimilars are being developed, along with over 360 ‘biobetters’ in a field of approximately 120 reference products [6]. Despite this growth, the development of biosimilars continues to be time consuming, expensive, resource intensive, and difficult. As follow-on biologic drugs (Box 1), biosimilars face many of the same technical, manufacturing, and analytical challenges as originators. In addition, biosimilars also face a unique set of regulatory, clinical development, and commercialization challenges [7,8]. Furthermore, biosimilar developers will need to continuously monitor and adapt to the regulatory criteria that will continue to evolve as the first wave of biosimilars enters the market. Thus, concerns and doubts regarding the ability of biosimilars to be commercially successful, especially in developed countries where biosimilars must negotiate stringent and evolving regulatory processes, while overcoming complex barriers to entry, remain.

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1 School of Chemistry and Molecular Biosciences, the University of Queensland, Brisbane, Qld 4072, Australia 2 UQ Business School, the University of Queensland, Brisbane, Qld 4072, Australia 3 Ground Zero Pharmaceuticals, 2600 Michelson Drive, Irvine, CA 92612-1550, USA

*Correspondence: [email protected] (V. Ferro).

http://dx.doi.org/10.1016/j.tibtech.2015.10.009 © 2015 Elsevier Ltd. All rights reserved.

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Box 1. Definitions of Biosimilars and Biobetters FDA definition ‘A biosimilar is a biological product that is highly similar to a US-licensed reference biological product notwithstanding minor differences in clinically inactive components, and for which there are no clinically meaningful differences between the biological product and the reference product in terms of the safety, purity, and potency of the product.’ [57] EMA definition ‘A biosimilar is a biological medicinal product that contains a version of the active substance of an already authorized original biological medicinal product (reference medicinal product) in the EEA (European Economic Area). Similarity to the reference medicinal product in terms of quality characteristics, biological activity, safety and efficacy based on a comprehensive comparability exercise needs to be established.’ [21] A biobetter is defined as ‘an improved or optimized version of an existing biological drug, or a new biologic carefully designed to maximize clinical performance, i.e., safety and efficacy’ [54].

In this review, we first examine the implications of the molecular complexity of biosimilars for both production processes and regulatory compliance. We then consider the current EMA and FDA regulatory processes for biosimilars, with identification of key differences and similarities between the regulatory frameworks. We follow the development pathway and identify the major bottlenecks in the development of biosimilars in meeting the requirements of the two leading regulatory bodies globally. We then consider the pricing and intellectual property (IP) environments, and their implications for the pace of biosimilars development. Finally, we discuss alternative pathways for the development of second-generation biologic drugs and examine whether biobetters will emerge as a more attractive option for developers.

Molecular Complexity Affecting Progress Through the Regulatory Hurdles

Process complexity

Monoclonal anbodies

Growth factors Heparins

Insulins Synthec pepdes Small-molecule drugs

Complexity of molecules

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Cytokines

Conclusiveness of analycal data

In comparison to small-molecule generic drugs (generics), the path of biosimilars to successful market entry and commercialization is filled with obstacles. Due to their high molecular weight and structural complexity, biosimilars face similar development challenges as originators, particularly with respect to process development and analytical characterization (Figure 1). Therapeutic proteins and antibodies are particularly complex because of the heterogeneity of the many different glycans attached to them, resulting in multiple glycoforms [9]. The development of a biosimilar is in fact more technically challenging than generating an originator product because of the narrow constraints in terms of product quality. Some characteristics of an originator biologic, such as post-translational modifications and/or glycosylation, can change over time from operational variations in the manufacturing process [8,9], the details of which are industry Figure 1. Effect of Molecular Complexity on Process Development and Analytical Data Requirements to Support Drug Marketing Applications. Adapted from [13].

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secrets. In some cases, differing product profiles may exist in different regions. This requires biosimilar developers to thoroughly characterize multiple lots of the reference biologic and to design a manufacturing process that produces a biosimilar that closely resembles the reference biologic product without intimate knowledge of the manufacturing process of the originator [8]. Beyond the technical difficulties associated with complex molecules, evolving regulatory frameworks, IP issues, and potential product pricing and reimbursement issues persist [10–12]. Market entry rates for biosimilars in the USA and the EU have not met expectations, not because of lower than anticipated demand, but due to slower than anticipated development speed [10]. This is reflected in a recent announcement by Roche, one of the largest biopharmaceutical companies, stressing the need to constantly re-evaluate and revise the market entry of biosimilars competing with originator biologics [10]. Roche initially expected competing biosimilars to their highly successful originator drugs to enter the market by 2016, but now expect to avoid substantial competition from biosimilars until 2020 [10].

How Fast Have the FDA and EMA Regulatory Frameworks Responded to Biosimilars? Another key issue for the development of biosimilars in the USA has been the uncertainty and evolving nature of the regulatory process (Box 2). This has been recently ameliorated by the release of updated detailed FDA guidelines on manufacturing processes and controls; analytical comparisons of innovator molecules and those developed by biosimilar sponsors; nonclinical testing; and clinical support for submission of marketing applications for these follow-on biologic drugs [13–16]. Yet, inconsistencies between the FDA and EMA regulatory environments remain. The EMA was the first of the two agencies to develop a biosimilars regulatory framework, establishing biosimilar guidelines in 2005 and approving the first biosimilar in 2006 (Figure 2). To date, the EMA has approved 21 biosimilars (Table 1). In comparison, the FDA only established biosimilar guidelines in 2012 under the Biologics Price Competition and Innovation Act (BPCIA), 2009 (Figure 2). The filgrastim biosimilar Zarzio®[8_TD$IF] (Sandoz) was the first biosimilar to obtain FDA approval in early 2015 (Table 1). Not surprisingly given the relative status of the markets, currently the European Union (EU) countries comprise the largest market for biosimilars in terms of revenue, accounting for 80% of global spending on biosimilars [17]. At the end of 2011, Germany and France accounted for the largest biosimilar sales, with 34% and 17% market share, respectively, across Europe [17]. It has been predicted that the USA will become the

Box 2. Complexity Affecting the FDA Decision-Making Process The foundation for an assessment and demonstration of biosimilarity between a proposed product and its reference product includes analytical studies that demonstrate that the proposed product is highly similar to the reference product, notwithstanding minor differences in clinically inactive components. This involves robust characterization of the proposed product, including comparative physicochemical and functional studies with the reference product. The information gained from these studies is critical to the overall product assessment that, as a scientific matter, is necessary for the development of a proposed product as a biosimilar. In addition, for the FDA, a 351(k) application for a proposed product must contain, among other things, information demonstrating biosimilarity based on data derived from animal studies (including the assessment of toxicity) and a clinical study or studies [including the assessment of immunogenicity, pharmacokinetics (PK) and pharmacodynamics (PD)]. The ability to discern and understand the impact of relevant analytical differences between the proposed product and its reference product will depend on the available analytical technology and complexity of the product. Any information regarding differences between the proposed product and the reference product should be considered to determine whether the statutory standard for biosimilarity can be met. The FDA has the authority to waive or modify the specific requirements for licensing a biosimilar product candidate, based on the weight of evidence supporting a determination of biosimilarity from all sources. This flexibility, combined with the extensive program for sponsors meeting with the Reviewing Divisions for biosimilars, is a two-edged sword. On the one hand, solid data may allow for a shorter, less expensive, and accelerated pathway to licensing. On the other hand, negative experience with one product may ‘color’ the FDA attitude towards similar products for a long time to come, particularly with regard to safety concerns.

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March 23, 2012 Abbreviated licensure pathway for biosimilars established through the BPCIA act

July 24, 2014 1st biosimilar applicaon

March 6, 2015 1st biosimilar market approval

August 8, 2014 1st mAB biosimilar applicaon

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

September 10, 2013 1st mAB biosimilar market approval

March 1, 2012 April 12, 2006 July 1, 2005 1st biosimilar applicaon

2001 Formal consideraon of biosimilar scienfic issues by EMA

1st biosimilar market approval

June 25, 2003

November 28, 2004

2003/63/EC: created a regulatory pathway for approval of biosimilars

2001/83/EC: allows cross reference to a product already authorized in the EU

1st mAB biosimilar applicaon

Figure 2. Biosimilar Regulatory Milestones: Comparison between the US [8_TD$IF]FDA[3_TD$IF] and the European Medicines Agency (EMA). The timeline depicts the history of establishing biosimilars guidelines by the FDA (orange boxes and arrows) and the EMA (blue boxes and arrows). Each box represents different stages of progress in establishing guidelines. It is evident that the EMA has led the way in establishing guidelines and regulatory frameworks for biosimilars, but the past 5 years has seen marked progress from the FDA. Abbreviations: BPCIA, Biologics Price Competition and Innovation Act[4_TD$IF]; mAB, monoclonal antibody.

largest market for biosimilars in the coming decade [18]. This takes into consideration that sales of most biopharmaceuticals are markedly higher in the USA than the rest of the world, and the recent high growth rate in sales of biologics in the USA, which grew by 18.2% in 2012–2013 to US$63.6 billion [19].

Reference Product Selection and Interchangeability Within biosimilar regulatory pathways, the guidelines that determine the choice of reference product have a key role. In principle, only a licensed originator biologic is accepted as a reference product for any testing during the biosimilar development process [20]. In addition, the same reference product has to be utilized throughout the entire development cycle [20]. However, both the FDA [16] and EMA [21] may allow the use of foreign reference products for conducting certain clinical and in vivo nonclinical studies to support a demonstration that the proposed product is biosimilar to the reference product. The sponsors are required to provide adequate data or information to scientifically justify the relevance of data comparing the biosimilar and the foreign reference product to an assessment of biosimilarity by establishing an acceptable bridge to the USA- and/or EU-licensed reference product. The EMA also requires that the foreign reference product is authorized in a member country of the International Conference on Harmonization (ICH) to ensure similar regulatory and scientific standards to that of the EMA [22]. Both agencies recommend upfront discussions with sponsors and suggest that decisions are made on a case-by-case basis. However, the FDA has also indicated that, currently, it is

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Biosimilar

Company (Marketing Authorization Holder)

International Nonproprietary Name

Originator

Originator Company

EMA Agency Product Number or FDA Application Number

Marketing Authorization Date and/or Holder

Application to the EMA (EMEA) or FDA

Committee for Medicinal Products for Human Use Authorization or FDA Approval Date

Omnitrope

Sandoz GmbH

Somatropin

Genotropin

Pfizer

EMEA/H/C/000607

April 12, 2006

July 1, 2004

January 26, 2006

Valtropin

BioPartners GmbH

Somatropin

Humatrope

Eli Lily

EMEA/H/C/000602

April 24, 2006

June 3, 2004

February 23, 2006

Bionocrit

Sandoz GmbH

Epoetin alfa

Epogen

Amgen

EMEA/H/C/000725

August 28, 2007

March 9, 2006

June 21, 2007

EMA Approved

Epoetin alfa Hexal

Hexal AG

Epoetin alfa

Epogen

Amgen

EMEA/H/C/000726

August 28, 2007

March 9, 2006

June 21, 2007

Abseamed

MAP GmbH & Co. KG

Epoetin alfa

Epogen

Amgen

EMEA/H/C/000727

August 28, 2007

March 9, 2006

June 21, 2007

Silapo

Stada Arzneimittel AG

Epoetin zeta

Epogen

Amgen

EMEA/H/C/000760

December 18, 2007

June 28, 2006

October 18, 2007

Retacrit

Hospira UK Limited

Epoetin zeta

Epogen

Amgen

EMEA/H/C/000872

December 18, 2007

May 11, 2007

October 18, 2007

Filgrastim ratiopharm

Ratiopharm GmbH

Filgrastim

Neupogen

Amgen

EMEA/H/C/000824

September 15, 2008

January 29, 2007

February 21, 2008

Ratiograstim

Ratiopharm GmbH

Filgrastim

Neupogen

Amgen

EMEA/H/C/000825

September 15, 2008

January 29, 2007

February 21, 2008

Tevagrastim

Teva GmbH

Filgrastim

Neupogen

Amgen

EMEA/H/C/000827

September 15, 2008

29 January, 2007

February 21, 2008

Biograstim

AbZ-Pharma GmbH

Filgrastim

Neupogen

Amgen

EMEA/H/C/000826

September 15, 2008

29 January, 2007

February 21, 2008

Filgrastim Hexal

Hexal AG

Filgrastim

Neupogen

Amgen

EMEA/H/C/000918

February 6, 2009

September 6, 2007

November 20, 2008

Zarzio

Sandoz GmbH

Filgrastim

Neupogen

Amgen

EMEA/H/C/000917

February 6, 2009

September 6, 2007

November 20, 2008

Nivestim

Hospira UK Limited

Filgrastim

Neupogen

Amgen

EMEA/H/C/0001142

June 8, 2010

February 27, 2009

March 18, 2010

Remsima

Celltrion H Hungary Kft.

Infliximab

Remicade

J&J

EMEA/H/C/002576

September 10, 2013

March 1, 2012

June 27, 2013

Inflectra

Hospira UK Limited

Infliximab

Remicade

J&J

EMEA/H/C/002778

September 10, 2013

June 26, 2012

June 27, 2013

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Ovaleap

Teva Pharma B.V.

Follitropin - alfa

Gonal-f

Merck

EMEA/H/C/002608

September 27, 2013

28 February, 2012

July 31, 2013

Grastofil

Apotex Europe BV

Filgrastim

Neupogen

Amgen

EMEA/H/C/002150

October 18, 2013

April 30, 2012

July 25, 2013

Bemfola

Finox Biotech AG

Follitropin - alfa

Gonal-f

Merck

EMEA/H/C/002615

March 27, 2014

October 30, 2012

January 31, 2014

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Table 1. Biosimilars [9_TD$IF]Approved by the EMA and FDAa

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6 Biosimilar

Company (Marketing Authorization Holder)

International Nonproprietary Name

Originator

Originator Company

EMA Agency Product Number or FDA Application Number

Marketing Authorization Date and/or Holder

Application to the EMA (EMEA) or FDA

Committee for Medicinal Products for Human Use Authorization or FDA Approval Date

Abasaglar (previously Absaria)

Eli Lilly Regional Operations GmbH

Insulin glargine

Lantus

Sanofi

EMEA/H/C/002835

September 9, 2014

June 3, 2013

June 26, 2014

Accofil

Accord Healthcare Ltd

Filgrastim

Neupogen

Amgen

EMEA/H/C/3956

September 18, 2014

March 24, 2014

July 24, 2014

Sandoz Pharmaceuticals Inc

Filgrastim-sndz

Neupogen

Amgen

(BLA) 125553

Sandoz Pharmaceuticals Inc

May 8, 2014

March 6, 2015

FDA Approved Zarzio a

This table does not include low-molecular-weight heparins, insulins, and human growth hormone because these are not considered biosimilars by the FDA (see main text). Biosimilars highlighted in bold are those where the marketing authorization has been withdrawn by the marketing authorization holder.

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Table 1. (continued)

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unlikely that clinical comparison using non-FDA-licensed products would be sufficient for the Agency to render decisions of interchangeability [16]. As FDA experience with multiple biosimilars against a single innovator product, and biosimilars in general, continues to accumulate, more clarity may emerge. Interchangeability is the ability of the pharmacist or dispenser to automatically substitute an interchangeable (often lower cost) product without the authorization of the prescriber or practitioner [23]. According to the FDA, to achieve interchangeability the following criteria must be met [16]: (i) (the biosimilar) ‘can be expected to produce the same clinical result as the reference product in any given patient; and (ii) for a product administered more than once, the safety and reduced efficacy risks of alternating or switching are not greater than with repeated use of the reference product without alternating or switching.’ When they reach the market, biosimilars cannot be dispensed instead of another biologic medicine unless a physician or a licensed healthcare provider prescribes the biosimilar drug. However, due to the provisions dictated by the Affordable Care Act in 2010, once determined ‘interchangeable’, two biological medicines (including biosimilars) can be substituted or interchanged without the consultation of the prescribing medical prescriber's prescription [15]. Thus, biosimilar developers targeting the USA market need to consider ‘interchangeability’ requirements when selecting reference-listed products for their clinical development. There is also some controversy as to whether individual USA states, which often have very strong pharmacy laws, can either foster or prevent pharmacy-based decisions on interchangeability. It will be for the Federal Courts to determine whether, if challenged, this provision of the Affordable Care Act can be used to declare Federal pre-emption of states’ rights vis à vis the practice of pharmacy and such decisions as the choice of a biosimilar over an innovator product [24]. By contrast, the EMA has not yet introduced a general consensus on interchangeability and it is up to individual member states to make that decision [24].

Applicability of the Generics Approval Pathway to Biosimilars Given the way in which biologic drugs are defined in the USA, regulations for certain biosimilar drugs are governed by the Federal Food, Drug, and Cosmetic Act and, as a result, are open to the abbreviated new drug (generic) approval pathway governed by the Hatch-Waxman Act of 1984 [25]. Examples of such biosimilars include human growth hormone, insulins, and low-molecular-weight heparins (LMWH). The FDA has published requirements for abbreviated new drug applications (ANDAs) for such biosimilars, thus offering the opportunity of using an ANDA process for biosimilars [20]. The FDA classifies these types of biologic as semisynthetic drugs and their copies as generics. Consequently, the FDA requires only in vivo pharmacodynamic (PD) studies in support of marketing applications for these products. Examples of such products approved via an ANDA process since 2006 include generic human growth hormone (Omnitrope®), insulin glargine (Basaglar®) [26] and two LMWHs [27,28]. In comparison, the EMA does not permit the utilization of traditional ‘small-molecule’ generic drug processes for marketing authorizations for any class of biosimilars [20]. The EMA views these products as biological medicines and, consequently, their copies, as biosimilars, also require clinical trials [29]. The EMA has had a specific guideline on LMWHs since 2007, which was revised in 2013 [30], providing some indication that the EMA may follow the FDA lead on LMWHs [31]. Other differences between FDA and the EMA arise with respect to the language used in guidance and regulation. Experts state that the greatest concern with the use of different terminology by EMA and FDA is that it will lead to complications in identifying discrepancies with regard to possible safety issues [20].

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Preclinical and Nonclinical Testing Requirements In terms of nonclinical testing strategies, both the FDA and EMA require extensive in vitro testing data, which should be comparable [32] (Figure 3). The FDA requires both in vivo functional assays and animal studies [unless it determines that such studies are not necessary in a 351(k) application] [13]. However, the EMA indicates that in vitro assays may often be more specific and sensitive to detect differences between the biosimilar and the reference product, compared with studies in animals and, thus, supports a risk-based approach to in vivo testing. Therefore, in vivo studies are not mandatory in the EU [33]. Neither regulatory framework requires carcinogenicity, nonclinical safety pharmacology, developmental, or reproductive toxicity studies when the proposed biosimilar has been shown to be highly similar to the reference listed product in terms of extensive functional and structural characterization [20]. However, slight differences exist with regard to the structural characterization of biosimilars [20]. The most apparent difference is in the number and structure of guidance documents required for the testing [20]. In contrast to the FDA, guidance documents provided by the EMA are issued for different classes of product such as insulin, erythropoietin (EPO), and somatropins, for both preclinical and clinical testing [20]. Thus, in the EU, individual testing strategies based on these product classes will be applied. In the USA, the FDA applies a series of general guidance documents on a case-by-case basis. This is dictated by the particular biosimilar being developed and the data generated in support of each product, along with extensive development meetings with each sponsor [34].

Clinical Study Requirements Clinical safety and pharmacovigilance requirements for biosimilars show only minor differences between the two jurisdictions [35]. In both cases, evaluation commences with comparative

Analycal studies

Preclinical in vitro studies

Animal studies

Phase I clinical studies

Phase III studies

Phase II clinical studies

Pharmacovigilance plan

Postmarket studies

EMA

Analycal studies

Preclinical in vitro studies

Animal studies

Phase I clinical studies

Gap study on populaon and manufacturing site(s) Phase II clinical studies

Phase III studies

Pharmacovigilance plan

Postmarket studies

Interchangeability studies

FDA Key: Generally required

Generally not required

Sponsor’s choice

Figure 3. Steps in the Development Process: European Medicines Agency (EMA versus US [8_TD$IF]FDA[3_TD$IF]. Note that postmarketing studies may be requested by the authorities on a case-by-case basis, depending on remaining uncertainties that cannot be addressed prelicensing.

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human PD and pharmacokinetic (PK) studies and a clinical immunogenicity assessment. Both the FDA and the EMA recommend choosing PD parameters based on their relevance to show the therapeutic efficacy of the biosimilar. The FDA states that, in certain cases, such studies may provide sufficient clinical data to demonstrate no clinically meaningful differences between the two products. However, if residual uncertainty exists, further comparative clinical studies will be required [13]. The FDA has also indicated that comparability of immunochemical, physicochemical, and functional characteristics may allow a more focused or smaller clinical development program, with the possibility, in certain cases, to carry out clinical trials with populations of reduced size [13]. Similarly, the EMA has stated that confirmatory clinical trials may not be necessary in specific circumstances where similar efficacy and safety can clearly be deduced from the comparison of physicochemical characteristics, biological activity and/or potency, and PK and/or PD profiles, and where the impurity profile does not cause concern [21,33]. In addition, both the EMA and the FDA stress the importance of clinical assessment in pre- and postapproval circumstances. Both authorities agree that nonclinical data are unable to forecast the immunogenic nature of a biosimilar and both regulatory frameworks expect the generation of clinical data entailing chronic administration with a minimum follow-up period of 1 year. The FDA has also provided more detailed guidelines for immunogenicity-testing requirements based on the intended period of administration [13]. The two regulatory frameworks have different guidelines with regard to extrapolation of immunogenicity data [36]. The EMA requires that extrapolation of immunogenicity to other uses of the reference product should be scientifically justified [33] while the FDA, in principle, allows potential extrapolation of immunogenicity data to other indications [20]. However, the FDA has advised caution with respect to this issue by recommending that the applicant discuss these approaches with the Agency.

Postapproval Hurdles: Labeling At present, another important difference between the two regulatory frameworks lies in the requirements for labeling. The labeling and naming of biosimilars continue to produce intense debate, especially with respect to implications for safety. This is due to approved biosimilars being marketed using the same International Nonproprietary Name (INN) as the reference biologic product [37]. This has led to concerns of prescription mix ups, unintentional substitutions, and issues related to postmarket surveillance and traceability [37]. In 2012, the European Commission announced a directive requiring all biologics (including biosimilars) to be marketed and identified using the brand name instead of the INN. Further measures are included to differentiate biologics and biosimilars prescribed in different EU member states [20]. Very recently[6_TD$IF] the FDA released a draft guidance on the nonproprietary naming of biological products to achieve clear differentiation among those products that have not been determined to be interchangeable [38]. The FDA proposes that both reference products and biosimilars have nonproprietary names that share a core drug substance name and, to better identify each product, an FDA-designated four-letter suffix after the INN that is unique for each product. For example, Sandoz's Zarxio®[6_TD$IF], the first biosimilar approved in the USA, was given the INN ‘filgrastim-sndz’. For interchangeable biological products, the FDA is seeking comment on whether the nonproprietary name for such products should include a distinct suffix, or should share the same suffix as its reference product [39]. The labeling issue continues to be the subject of intense debate in the USA [40].

Market Issues for Biosimilars: Pricing, Competition, and Commercialization At present, the extent of price savings provided by biosimilars will be a key determinant of the level of commercial success. Given that biosimilars generally do not provide additional therapeutic benefits over the reference listed innovator product, a small difference in price can inhibit the incentive to switch from the well-known reference product to the relatively unknown

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biosimilar [41]. There is general agreement that a minimum price discount of 20–25% provides sufficient incentive to switch to a biosimilar [41]. It should be noted that the first licensed biosimilar in the USA, Zarzio®, entered the market in the summer of 2015 at only a 15% price discount over the reference listed innovator product. It is difficult for biosimilars to achieve the same level of cost savings as generic small-molecule drugs due to their high structural complexity. This complexity leads to higher development costs and longer development times, ultimately leading to higher pricing [23]. On average, biosimilar development costs in the range of US$100 million with a development time of 3–5 years, whereas generics cost US$3–5 million with a development time of 2–3 years [42]. This difference in the cost of development is largely due to the more extensive data and evidence required by biosimilars to gain regulatory approval [17,42]. Furthermore, the cost of postmarket approval activities is also expected to be significantly higher for biosimilars in comparison to generics because they require vigorous surveillance as well as marketing, branding, and sales resources [23]. The high cost of development and the large number of hurdles to market may continue to lead to a lower number of biosimilar entrants [17,42]. Low numbers of entrants will lead to less competition, which ultimately will limit price savings and potentially affect quality [20,43]. This inversely proportional relationship between the number of market entrants and price was evident in the case of generics [17,23,42]. A report by the FDA showed that, for generics, lowest prices (or maximum savings) are reached when there are ten or more generic drugs available in the market [44]. The same study indicated that, when the first generic entered the market, the price was almost the same as the reference branded drug. However, once the second generic drug entered the market, the price of generics decreased to nearly half the price of the branded [44]. Thus, the number of entrants in the generic field can have a significant effect on the price of such products. Furthermore, in the USA and EU, biosimilar sponsors should be aware of state-specific and country-specific regulations and legislation that might affect biosimilar development and commercialization. One such example is the presence of ‘carve-out’ laws currently in place in eight states in the USA [23]. Carve-out laws prevent the automatic substitution of lower-priced interchangeable products [23]. A biosimilar that aims to be interchangeable has to undergo more extensive clinical trials to show it is ‘clinically equivalent,’ which is a different standard than ‘clinically similar’ to show biosimilarity [45]. The presence of state-specific carve-out laws raises the question of whether the cost of obtaining such additional data is worthwhile, since these laws will prevent automatic substitution even with the interchangeability indication as allowed by the FDA [23]. A high percentage of the originator biologic companies are large multinational companies with established networks and extensive experience in addressing policy and policy makers. In May 2015, 11 companies joined to form the Biosimilars Forumi[1_TD$IF] to advocate for public policies and practices that encourage access, awareness, and adoption of biosimilars. Interestingly, among the members are those who have been adversaries in several biosimilar-related issues, such as Amgen and Sandoz (Box 3).

Intellectual Property: Double Trouble for Second Movers In biosimilar marketing applications submitted to the FDA, assurance must be provided by the sponsor that there is no infringement of applicable patents held by the innovator (Box 3). It is difficult for biosimilar companies to assess the strength and scope of the originator patents [42]. This is mainly due to originators having multiple subsidiary patents; for example, those covering the manufacturing process (process or methods of manufacture patents). For example, most

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Box 3. The ‘Patent Dance’ As in any new highly regulated product category, the biosimilar regulatory landscape is still evolving and a large amount of uncertainty prevails. This is more prevalent in the USA, where the regulatory approval process is still provided as guidelines and not yet codified as a definitive regulatory pathway. As a result, interpretations of such regulatory guidelines by different stakeholders often vary [23]. This is exemplified by the complications surrounding the ‘patent dance’ procedure. In the USA, biosimilar regulations governed by the Biologic Price Competition and Innovation Act (BPCIA) state that, once a biosimilar application has been submitted for approval via the abbreviated Biologic License Application (aBLA) pathway, the originator and the biosimilar sponsor must exchange information regarding the patents that are potentially believed to be infringed. They should identify which, if any, of these patents the originator would be willing to license to the biosimilar sponsor. This ‘patent dance’ has already led to litigation and debate within the industry. Amgen sued Sandoz, the first company to obtain market approval for a biosimilar in the USA, in relation to the statute around the ‘patent dance’, alleging that Sandoz failed to follow the rules set by the BPCIA by refusing to disclose the aBLA and manufacturing information to Amgen [58]. Amgen appealed the decision of the District Court that the BPCIA allows Sandoz to refuse disclosing these details. Biosimilar companies welcomed a landmark decision on July 21, 2015 when the US Federal Court partly upheld the decision by the District Court in favour of Sandoz [58,59], ruling that a biosimilar applicant is not absolutely required to give a copy of its biosimilar application to the reference product sponsor, and is not required to engage in the ‘patent dance’. However, biosimilar applicants who elect not to share their applications are risking an immediate declaratory judgment action brought by the reference product sponsor, to assert any patent that claims the product or its use.

industry experts predicted patent protection for Janssen Biotech's highly successful infliximab monoclonal antibody, Remicade®, to end in 2018 with the expiry of its key patent, US6284471B in September of 2018 [46]. However, Janssen has a range of filed and approved patents expiring from 2015 to as late as 2027 [47]; this makes it difficult for any biosimilar manufacturer to assess Janssen's patent position, and plan their own development chronology. Patent disputes have become increasingly common, further increasing the cost of biosimilar development and increasing development times [23,42,48]. RemsimaTM (CT-P13), developed by South Korean-based Celltrion, is a biosimilar to Janssen's originator drug Remicade®. Celltrion has obtained marketing approval in over 50 countries, including Japan, Canada, Columbia, and 27 EU countries [49]. However, Remsima's road to market entry has been paved by IP litigation from Janssen. Examples include Janssen contending Celltrion's trademarks for CT-P13, RemsimaTM, in Australia, Argentina, Brazil, Bolivia, Chile, Canada, India, South Korea, the Philippines, South Africa, and Uruguay [49]. In other instances, Janssen has been successful in delaying market entry even after market authorization. This was seen when the launch of Remsima in 12 of the top EU markets was delayed until February 24, 2015 because Janssen obtained a pediatric extension for its patent, although Remsima had been approved by the EMA in September 2013 [50]. This patent extension resulted in extending effective patent life for originator Remicade® in the EU, across all approved indications, both pediatric and adult [50]. Allegations of ‘double patenting’ in the biopharmaceutical sector have become widely known due to patent litigation associated with biosimilars. Double patenting is defined as ‘the granting of two patents for a single invention, to the same proprietor and in the same country or countries’. An example of allegations of ‘double patenting’ by a biosimilar company was seen in the USA court case Celltrion Healthcare Co. Ltd. et al. versus Janssen Biotech, Inc., case number 1:14-cv-11613-MLW, requesting a declaratory judgment that Janssen's prevailing patents were unenforceable and invalid [46]. According to Celltrion, Janssen's previous owner, Centacor Biotech, had applied for patents, all of which protected the same invention of cA2 and its applications, ‘or obvious variations of that purported invention’ [51]. Thus, in this case, Celltrion alleged that Janssen ‘double patented’ and purposely delayed the entry of RemsimaTM [51]. A second consideration is the likely inability to patent biosimilar products and the effect this has on the commercialization pathway taken. Traditionally, early discovery research and

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development activities of biopharmaceutical products have been carried out by universities or biotechnology firms [48]. Thirty six percent of all university patents awarded in 2012 were related to biotechnology and the pharmaceutical industry, thus demonstrating the contribution of such early-stage research from academia to the biopharmaceutical sector [48]. One of the key questions will be how biosimilar companies will partner and collaborate, especially with academia and biotech companies, in the absence of IP protection [48].

With so Many Hurdles, Are Biobetters the Better Solution? Another strategy commonly adopted by innovator biologic companies is the development of advanced second-generation products commonly known as ‘biobetters’. Biobetters are considered therapeutic alternatives to the originator product and its biosimilars, providing substantial added benefit to the user [52]. One such benefit is the development of more sustainedrelease products, with longer half-lives and concomitant reduction in the frequency of administration [52]. Some examples of biobetter strategies include Genentech's approach; introducing two new biobetters to its rituximab monoclonal antibody Rituxan®[7_TD$IF], and Roche's introduction of subcutaneous versions of MabThera® and Herceptin®, which were previously delivered intravenously (subcutaneous delivery takes 2–5 min, while intravenous delivery can take up to 30– 40 min). Multiple studies have shown that originator biologics see a decline in sales or uptake with the introduction of a biobetter for the same indication [53]. One such study shows that the biobetter version of peg-filgrastim generated 50–80% of the market share in comparison with the combined presence of originators and biosimilars in five key EU markets [53]. Thus, while biosimilars face direct competition from the innovator, they also face strong indirect competition from biobetters. At present, biobetters are not formally defined by any of the major regulatory agencies, such as the FDA, EMA, or WHO (Box 1) and, thus, they will be treated similarly to innovator biologics. However, the FDA has recognized that biobetters hold the promise of substantial improvements over existing therapies and, therefore, that they may qualify for a variety of incentive and expedited regulatory programs [54]. Thus, they have encouraged prospective sponsors of biobetters to utilize all available incentive and expedited programs as applicable and to communicate with the Agency early and frequently [54]. Such comment from the FDA points to their favorable view of the development of biobetters. The long-term experience in the marketplace of the innovator products, with the ability for FDA to review the risks and/or benefits under realworld conditions (and with the benefit of postmarketing safety data) is congruent with this initiative. For these reasons, biobetters have several advantages over biosimilars, including a long exclusivity period, the potential for patent protection, and ‘better product’ status [55]. These advantages, coupled with the complex and expensive development pathway for biosimilars, will be the main driving factors behind biobetter development. Whether there will be new regulatory frameworks for biobetters and, if so, how this will this affect the commercialization progress of biobetters, remain open questions [55]. Three potential pathways are emerging for the development of second-generation drugs. The first is to develop a biosimilar, seeking to stringently maintain close molecular similarity to the originator throughout the development process. The second is to forge a new pathway, utilizing public domain information about the originator, but seeking to incorporate additional improvements in the design and development process. The third is to commence the development process for a biosimilar with the view to capitalizing on breakthroughs, which are likely to occur in the development process enabling a switch from biosimilar to biobetter. The third pathway

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would seem to offer a strong strategic position that encourages an innovative design in the development process, rather than one designed solely around compliance to the design of the originator.

Outstanding Questions

The third pathway in particular has implications for both the EMA and FDA. Initial approval would be sought for biosimilar development, which is becoming increasingly well defined by both agencies. However, progress through a biobetter development process, which remains ill defined, may be disadvantageously slow for the developer. The upside of success using such a pathway is a clearer market position and a stronger IP position, which offers exclusivity for the period of the patents.

What lessons can be learnt from the examples of first-to-market biosimilars? How would they shape the development of the next wave of biosimilars?

Concluding Remarks and Future Prospects Biosimilars face several challenges. Some of these are the same as those faced by smallmolecule generic medicines, but some are unique and are, at least in part, a consequence of the molecular complexity of the biosimilar. These include uncertainty of an evolving regulatory environment, challenges in developing a reproducible manufacturing process; challenges in demonstrating equivalence, safety and efficacy; challenges in achieving a competitive price (in the context of an expensive production process); intellectual property challenges (barriers imposed by first movers, and the difficulty of obtaining patent protection for a second mover therapeutic with the same disease indication); and finally, the emergence of biobetters. After an initial burst of EMA approvals for biosimilars from 2006 to 2008, the approval rate has slowed considerably. While the FDA has recently approved its first biosimilar, it is not yet clear whether the floodgates will open because obstacles to the development and introduction of biosimilars remain (see Outstanding Questions). By contrast, biobetters have continued to be approved in recent years. The potential for biosimilar competition may be spurring manufacturers to further innovate and introduce second-generation products to compete with biosimilar versions of first generation products [1]. Although these biobetters are regarded by regulatory agencies as new products that require their own development programs, there can be regulatory and production process advantages to building on the experience, data, and successes of originator products rather than starting from scratch [56]. Biobetters may also emerge from the biosimilar development process as new discoveries occur. This may provide an incentive to persist with biosimilars, as a route to discoveries and new products.

What is the best go-to-market model considering interchangeability, pricing, and reimbursement issues?

What role will emerging markets have in the global biosimilars context? How will the biosimilars approved and marketed in emerging markets fare in the USA and the EU? How many emerging market biosimilars will be directed through the two main regulatory bodies globally? Given the current differences in regulatory pathways, how would these differences affect the development and commercialization pathways? Will partnerships be a determining factor for the commercial success of biosimilars? What are the necessary prerequisites for a biosimilar partnership to be successful? Do the benefits of partnering outweigh the risks involved? Will the return on investment be sufficient for biosimilar developers? Will the biosimilar pathway be usurped by biobetters in the future? Should the regulatory bodies direct the bulk of their effort toward biobetters?

Acknowledgment We thank the University of Queensland for financial support.

Resources i

[12_TD$IF] http://www.biosimilarsforum.org/

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