Growing competition leads to price erosion in biosimilars in India

Industry feels that as the market for biologic drugs mature, rising affordability is likely to enhance patient access

Increasing competition in the Indian biosimilar drugs market has seen price erosion in some key ones. In some cases to the extent of 70 per cent, compared to those of the innovator drug. 

A biologic drug is produced from living organisms or contains components of living organisms, unlike chemical drugs. A biosimilar is a copy-cat of a biologic drug, once the patent period ends. The past four years saw at least 84 brand launches in the segment in India.

The industry feels as the market for biologic drugs matures, rising affordability is likely to enhance patient access. The price of therapy in biologics (used for critical ailments like cancer) can vary from a few thousands to a few millions. 

For instance, when Biocon had introduced its biosimilar of Trastuzumab in India during 2014, it led to a decline in the innovator brand's price. The latter here is Herceptin, for treating breast cancer. 

“Since the launch of CANMAB (Biocon’s brand name for its biosimilar), several other pharmaceutical companies have launched their versions of biosimilar Trastuzumab. This expanded the market in India and increased patient access by four times in four years,” said a company spokesperson. 

Data from AIOCD AWACS shows value growth of biosimilars sold in India had slowed in the past year. While the market had grown by 24 per cent or so in 2017 over the previous year, value growth slowed to 1.9 per cent in 2018 (August MAT). 

MAT being the moving annual turnover or turnover for the past 12 months. 

Analysts say this is primarily due to price erosion in the segment. "For key molecules like Adalimumab, the price erosion has been over 70 per cent," said one analyst with a leading brokerage. Adalimumab is used for treating rheumatoid arthritis. 

Source: Edelweiss Research

Cadila Healthcare's Adalimumab recombinant brand, Exemptia, had sales of Rs 5.24 billion in FY18. The company has a pipeline of 21 biosimilars, some of which have been launched. In 2017, it launched a biosmilar of Bevacizumab, a cancer drug. Biocon launched it the same year. Intas, Hetero, Lupin, Alkem, and Emcure all now have their versions of the drug in the market.

The originator brand there was Avastin, by Roche, and AIOCD data shows how competition ate into their market. From 99.86 per cent share in 2016, Avastin now has only 6.9 per cent. Ahmedabad's Intas Pharmaceuticals now has the highest share (37 per cent), followed by Hetero Laboratories (26.6 per cent). The market size for the drug, however, more than doubled from Rs 329 million in 2016 to Rs 832 million in August 2018.

A Torrent Pharma spokesperson said technical expertise and infrastructural requirement led to a high development cost, an entry barrier to the biosimilars market. "Recently many new players have entered the arena, primarily through in-licensing partnerships," he added. Torrent has 12 stock keeping units (SKUs) in the biosimilar portfolio in India and is developing another five to seven. 

The current biosimilar (monoclonal antibodies) market is growing faster than the overall pharmaceutical market, at 31 per cent annually. Dr Reddy's Laboratories was one of the earlier entrants in the arena and its biologics revenue has grown at about 30 per cent annually for the past decade. Glenmark entered the Indian biosimilar market in FY18, with the launch of its variant of Adalimumbab under the Adaly brand.

As the market matures, biosimilars are likely to provide access for critical therapies to millions who would otherwise have limited treatment options. "India’s universal reimbursement and health insurance system is still at an early stage of being rolled out. So, over the next few years, lower priced biosimilars will play an important role in reducing the burden on treatment costs," said a Biocon spokesperson.