Abbotts FDA move could block Indian biosimilar drug cos

Written by Soma Das | New Delhi | Updated: May 7 2012, 05:57am hrs
Innovator firm Abbott Labs has moved the US Food and Drug Administration (USFDA) and has urged it to block a lions share of the existing biologicals market from generic versions or biosimilars as they are commonly known. The move, if approved by the USFDA, could dampen the prospects of Indian drugmakers eyeing the US market.

In its petition, Abbott has urged USFDA not to grant licences to any biosimilar drug firm, the applications for which were received before March 23, 2010. It was on this date that US president Barack Obama had signed a legislation authorising USFDA to approve biosimilars, thereby, creating a regulatory pathway for generic drugs highly similar to already licensed biological drugs.

Experts and domestic pharma companies fee that irrespective of what decision USFDA takes, Abbott move would open doors to a long-winding and complex litigation process. It could also affect future plans of those companies already marketing biosimilars in places other than the US. Companies likely to be affected include Dr Reddys, Biocon, Bharat Biotech, Serum Institute of India, Wockhardt, Lupin, Cipla and Glenmark.

In 2009, PwC had valued the US biological market at $69 billion, accounting for over half of the global biologic drug market.

Abbott argues that research and development of such products is expensive and a firm spends over $1 billion and a decade to develop such a drug. The clinical data generated after such investment qualifies as trade secret and to use such data to bring competitive product to the market would be unconstitutional.

If USFDA and subsequently courts agree with Abbotts position, at least one goal of US health reforms to lower healthcare cost by making cheaper generic drugs available in the market may be jeopardised.

In essence, such a move could subvert efforts that made in the US to reduce healthcare costs by means including adoption of low-cost generic drugs, or in this case, biosimilars. This comes at a time when a clear regulatory framework in the US for the use of generics or biogenerics is yet to evolve. Through this move, the innovator company is trying to extend protection of its data rights for its biological drugs quite akin to how innovator companies protect their patent coverage through evergreening against generics, said Vivek Mittal, chief legal officer of Lupin.

Abbotts move would further delay the entry of Indian players into the US biological market. Indian companies would now adopt a different geographical trajectory (compared with chemical drugs) for expansion of their biological drugs. They are likely to launch first in the domestic markets, then other developing markets followed by EU countries and Japan and then consider the US market, said Ranjit Kapadia, senior vice-president of Centrum Broking.

A senior executive from another leading domestic firm said, It took time for generics to find acceptance in the US. But once having found their rightful place, it is difficult to imagine life in the US without them. Similarly, biosimilars would have to earn their stripes in the US market.

Some estimates reckon that biosimilars could help the US with potential cost savings worth $300 billion by 2029.