India, which has dominated the generic drugs industry for decades, is falling behind in the race to make copies of complex biotech drugs, which are expected to generate tens of billions of dollars in sales in the coming years.
While Indian firms have launched a few such products on the domestic market, where regulatory barriers are relatively low, they are being overtaken by European, American and South Korean firms in the race to supply lucrative Western markets.
Just three Indian groups – Biocon Ltd, Dr Reddy’s Laboratories Ltd and Intas pharmaceutical Ltd – are working with partners on so-called biosimilars aimed at the United States and Europe.
Biotech drugs, which require genetic engineering, account for a growing share of new drugs and the future sales of copycat products will also switch to this category of pharmaceuticals from simple small-molecule pills like aspirin.
The global biosimilars market is predicted to have sales of $25 billion by 2020, according to a 2014 Thomson Reuters report.
“Biosimilars is a big opportunity,” said Sujay Shetty, leader of the life sciences practice at PwC India. “But unlike generics, it is not yet an opportunity (for Indian companies) in the U.S.”
Copying chemical-based drugs has long been the bedrock of India’s $15 billion pharmaceuticals industry. Biotech drugs, however, are more difficult to make and cannot be replicated exactly, which is why regulators have come up with the notion of versions that are similar enough to do the job.
That also means regulators will be eagle-eyed on quality, posing a challenge to Indian companies, which have been distracted in recent years by manufacturing problems that have led to some drugs being barred from key overseas markets.
Many, including the country’s biggest drugmaker Sun Pharmaceutical Industries Ltd, are still struggling to fix issues at their generic drug factories.
Biosimilars have been available in India since the early 2000s, well before their 2006 arrival in Europe and the recent introduction of a regulatory pathway in the United States, where the first biosimilar was launched only last month.
But India’s experience has not been problem-free. Intas, for example, recently received reports of some patients on its biosimilar version of Roche’s eye drug Lucentis developing inflammation barely two months after the drug’s launch.
An Intas spokesman said the problem was found to be in the drug’s “cold chain logistics” distribution channel and has restricted supply of the drug.
Arun Chandavarkar, the chief executive of Biocon, seen by analysts as the front-runner among Indian firms developing biosimilars, believes the cost and complexity of developing biosimilars will be a deterrent for many Indian players.
“At this time, there can’t be too many companies willing to put in that much effort and investment,” he said.
The three Indian companies that have stated plans to make biosimilars for the United States and Europe are all partnered with larger Western firms.
Biocon has a tie-up with Mylan Inc and is testing four molecules in global Phase III trials, for which it plans to seek approvals in the United States and Europe starting in fiscal 2017, Chandavarkar said.
Dr Reddy’s is developing biosimilars such as rituximab and pegfilgrastim for use in cancer treatment under a pact with Germany’s Merck KGaA and said it plans to launch its first biosimilar in the United States by 2018.
A spokesman at Intas, which developed pegfilgrastim in partnership with Canada’s Apotex Inc, told Reuters the company was considering partnering with a Swiss drugmaker to launch the product in the United States. It declined to name the firm.
Chandru Chawla, head of Cipla Ltd’s new ventures unit, said India’s “fundamental disadvantage” over United States, Europe and South Korea was that biotechnology never evolved in India to the extent that chemistry did.
“In terms of having the right knowledge ecosystem and the pools of talent, India is far behind,” he said.
Globally, Western pharmaceutical firms such as Novartis AG ; Pfizer Inc, in partnership with South Korea’s Celltrion Inc ; and Merck & Co with partner Samsung Bioepis, are leading in the race to dominate the Western biosimilars market.
“South Korea has made very significant strides in a very short period of time,” said Cartikeya Reddy, Dr Reddy’s executive vice president for biologics. “In this regard they have indeed pulled ahead of Indian companies.”