Market for Generic Biologics: Issues, Trends, and Market Potential, 2nd edition, The

Some of the biggest-selling biological drugs developed during the first phase of the biotechnology revolution in the 1980s, including human growth hormone (hGH) and insulin, are set to lose patent protection in the United States in 2005 and soon after. This opens up a market currently worth over $30 billion (and growing at over 10% per year) to generic competition, if—and it’s a big if—the regulatory hurdles for these generics can be overcome.

Biogeneric is a new term combining biologic and generic. Biopharmaceuticals are synthetic or recombinant versions of natural biologic substances, including proteins such as enzymes or antibodies and nucleic acids such as DNA or RNA. Generic products are non-patented chemical and therapeutic equivalents of brand name drugs. However, given these two definitions, biogenerics are not technically generic biologics because there can be no true generic form of biologics in the traditional sense. The complex process of creating biologics and the complex nature of the molecules themselves make “equivalence” an inappropriate concept in the context of biologics. Hence, industry participants are struggling with what to call these hybrid forms of biologics that will be created by the generic companies.

The worldwide prescription generic drug market has stood the test of time and has endured numerous growing pains. However, it has evolved into a formidable and important participant in the complex world of health care. Generic drugs continue to represent one of the greatest values in healthcare and are of great importance in the area of biopharmaceuticals, as well, because these products are among the most expensive treatments currently on the market. Generic drug manufacturers are poised for strong growth in the future because the patent protection for a host of major biopharmaceuticals will expire and new legislative reforms in the generic drug approval process may facilitate bringing products to market. While there are many issues to address, the outlook for biogeneric promotion is favorable in the next five years.

This study is designed to provide a comprehensive look at the various strategies being used by select generic companies in exploring the emerging area of biogenerics, the issues and trends that are shaping the marketplace, and the potential feasibility of providing biogenerics.

For purposes of study, Kalorama divided this market into biopharmaceuticals that have lost patent protection and biopharmaceuticals that will lose patent protection in the future. Projections were made based on the progress that is occurring within the generic arena in terms of capabilities, capital, interest, and development of biopharmaceuticals.

Kalorama has identified the biopharmaceuticals that have lost patent protection and are likely to be the first products that will be attempted by generic companies. Some of these products are relatively simple in structure (by biotech complexity) such as the insulins and human growth hormones, while others are extremely difficult to process. It is anticipated that the insulin and human growth hormones will be the first to be approved.

There are a number of biopharmaceuticals that will be targets for biogeneric development identified as potential targets for generic development. Many of these biopharmaceutical patents are due to expire in immediate future, over the next 4 years. Many of these products sport manufacturer sales of over $10 billion, presenting a ripe opportunity for generic manufacturers. However, because many of these products demonstrate sales of over $1 billion per year, it is anticipated that there will considerable resistance from the innovator companies in allowing generic capitalization and consequently approvals.

The information and analysis presented in this report are based on an extensive survey of senior management in the biogeneric drug industry. Background information was obtained from a comprehensive search of published literature and reports obtained from various government, business, medical trade, and international journals. Key information from published literature was used to conduct interviews with over 25 industry executives and product managers to validate and obtain expert opinion on current and future trends in the psychotherapeutic industry. Interviews were also used to confirm and/or adjust market size, as well as in formulating market projections.

All market data pertain to the world market at the manufacturers’ level. Data are expressed in current U.S. dollars. The geographic scope of the study is worldwide with particular emphasis on the United States.

November 1, 2005

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