A booster shot: Biosimilars can greatly reduce India's healthcare costs

Biosimilars can not only reduce patients' financial burdens, but also encourage more people to go for early diagnosis and comprehensive treatment

Millions of India’s average families have to incur substantial part of their household budget in healthcare, driving estimated 32–39 million people each year into poverty trap. Sometimes, people have to sell their houses or land or pawn family jewellery. There is an urgent need for more affordable solutions for rising diseases.

 

Limited insurance coverage also worsens the burden, and fear and psychological pressure on people. Although advanced biologics offer hope, their high prices add to the distress. Fortunately, now more affordable biosimilars- nearly identical to biologics – can substantially reduce costs.

 

Therapeutic benefits at lower costs

 

Biosimilars are similar versions of a biologic, and are meant to be more affordable. Biosimilars are not always approved for the same uses as the original biologic. Biosimilars are considered clinically interchangeable if they produce identical clinical results as the original biologic. A few examples of biologics include Humira, Lantus, and Enbrel, and examples of biosimilars include Amjevita, Semglee, and Inflectra. There are several others.

 

 

Out of 118 biologics, whose patents are due to expire between 2025 and 2034, only 10% presently have biosimilar development plans. Thus, there is a huge opportunity that India can tap. It is understood that the government is already seized of it.

 

Biosimilars promise comparable therapeutic benefits at significantly lower costs, estimated up to 50–75 per cent. It can not only reduce patients’ financial burdens, but also encourage more people to go for early diagnosis and comprehensive treatment.

 

India becoming global leader in producing biosimilars

 

India was among the first countries to bring in Guidelines for Biosimilars in 2012, which were revised in 2016. However, there remains scope for further enhancing these guidelines in view of recent international developments, including changes introduced in the non-binding WHO biosimilar guidelines in 2022.

 

Although India has approved nearly a hundred biosimilars and is fast becoming a global leader in their production, the practice of patent evergreening by multinational companies is a complex problem. Through strategic secondary patents, they try to procure patent extensions with sometimes small tweaks to original formulations. At times, even the mere filing of a regulatory request for a biosimilar triggers lengthy patent lawsuits, holding back market entry.

 

Breaking this cycle demands a concerted, determined and multipronged approach. India can also harness the power of differential pricing- where manufacturers ensure that low-income patients are not priced out of essential therapies. A vigilant and proactive competition regime can prevent anti-competitive behaviour by large MNCs by imposing swift and meaningful penalties, CCI as the market regulator can send a powerful signal to delinquents through market study and its orders.

 

Furthermore, rigorous regulatory oversight is vital for ensuring the quality and efficacy of biosimilars. The Drugs Controller General of India and other authorities may enforce strict standards for clinical efficacy. This would instill confidence among doctors and patients and set global benchmarks. Ultimately, when quality is consistently proven, adoption rates grow, further reducing prices.

 

The stakes are high for both individuals and the broader economy. Prohibitive medical expenses can lead to a domino effect of job losses, school dropouts, and intergenerational poverty. By embracing biosimilars, India has a chance to break this destructive chain. In addition, lower drug costs can reduce the strain on government resources, freeing funds for public health initiatives, which may help curb the rise of diseases by initial investigation and treatment in the first place.

 

Need to integrate biosimilars into public health programmes

 

Biosimilars, a cost-effective alternative to expensive biologic drugs, can be integrated into public health programmes like Ayushman Bharat, in several ways:

 

-           Inclusion in National Essential Medicines: By adding biosimilars to the list of essential medicines, government hospitals and public health centres.

 

-          Coverage Under Ayushman Bharat: Inclusion of biosimilars in its treatment protocols can help patients receive biosimilar therapies at a fraction of cost.

 

-          Bulk procurement and negotiated pricing: The government can leverage its purchasing power by negotiating bulk procurement contracts for biosimilars. This would stimulate domestic production.

 

-          Capacity building and awareness: Training healthcare professionals on the efficacy and safe use of biosimilars is crucial. Public health programmes can incorporate educational initiatives for both providers and patients, building confidence in biosimilars.

 

-          Strengthening regulatory frameworks: A robust regulatory framework that ensures the quality, safety, and efficacy of biosimilars can help wider adoption. Faster approval processes can help biosimilars reach the market more quickly.

 

-          Support for domestic manufacturing: Encouraging local production of biosimilars can not only reduce costs due to lower manufacturing expenses, but also supports the Indian pharma industry. This can create a sustainable ecosystem with cost-effective, high-quality biosimilars widely available.

 

There could be some policy and regulatory measures like – (i) establishing special benches for IP related matters, (ii) procedural intervention to reduce regulatory delays in approvals, (iii) patent thickets through regulatory reforms, (iv) encouraging public private partnership, (v) utilising competition law to prevent market manipulation, collusive agreements and reverse-payment settlements etc.

 

India’s success in the generics market once earned the country its reputation as “the pharmacy of the world”. Indian pharma companies supply over 40 per cent generic medicines into the US market, resulting in substantial savings for healthcare systems there. In 2022 alone, these companies provided approximately $219 billion in savings to US healthcare. Today, a similar

 

opportunity exists with biosimilars. However, there is a need for policy advocacy, strong enforcement of laws, and robust regulatory processes. The health and economic well-being of millions depend on it. With lower-cost and high-impact therapies, India can demonstrate its leadership in affordable healthcare.  (The writer is the chairman of Competition Advisory Services India LLP (COMPAD). He has also served as the executive director at World Bank for India, Sri Lanka, Bangladesh and Bhutan and first chairman of CCI)

 

Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper