whitepaper affordable therapies gaining a competitive advantage in asia pacific

The first of a three-part series of thought leadership reports exploring strategic models for growth in Asia Pacific, the challenges and opportunities biopharma companies face in the region, and what they can do to position themselves for success.

White paper

Predicted CAGR for generics market in Asia

17%-18% through 2018

Global biosimilars market to reachUS $35 billionby 2020

Affordable therapies: Gaining a competitive advantage in Asia PacificDr. Anand Tharmaratnam, MBBS, MRCA, President and Head of Asia PacificSimranjit Singh, Senior Director Strategic Planning Asia Pacific General Manager Medical Devices & Diagnostics Asia

Introduction 3

Affordable therapies: Gaining a competitive advantage in Asia Pacific 3

The quest for cost efficiency 4

Biosimilars: Opportunity awaits 5

Keys to a successful biosimilars development program 6

Understand the reference product thoroughly 6

Get regulatory advice early on 6

Do not try to replicate innovator’s clinical development program 7

Address obstacles to commercialization up front 7

Consider the competition 8

If it doesn’t add value, it’s not worth doing 8

10 steps to frugal innovation 9

The bottom line 10

References 11

About the authors 12

Table of contents

3 | www.quintiles.com

Asian markets are widely recognized as one of the most important growth frontiers for drug development, particularly in biologics and precision medicines. The region is home to a vast and growing population, deep pools of patients interested in clinical trials, and an increasingly sophisticated regulatory environment.

In this competitive space, biopharma companies need to bring speed, agility and innovation – in both products delivered and the processes used to deliver them. That means eliminating waste and teaming with local and international experts to mitigate risk in their projects and increase the odds of regulatory approval. Companies that figure out how to efficiently manage regulatory issues and cost hurdles, and drive waste out of their processes, will be well positioned to succeed.

“Affordable therapies: Gaining a competitive advantage in Asia Pacific” is the first in a three-part series of thought leadership reports on the strategic models for growth in the world’s fastest growing biopharmaceutical market, and how biopharma companies can best position themselves to thrive in this marketplace.

The next two reports will explore:

• Strategies for becoming an engine for innovation

• How to use development success in Asia as platform for global leadership

Affordable therapies: Gaining a competitive advantage in Asia Pacific

It’s no secret that Asia Pacific is viewed as the global biopharmaceutical industry’s growth engine. The region is home to more than 4 billion people (60 percent of the world’s population); its growing economies and higher wages are fueling greater health care spending; the burden of disease is increasing, fed by lifestyle and environmental factors; and it is home to some of world’s fastest-aging countries, in particular China, Japan, South Korea and Taiwan.

This confluence of trends has created enormous potential, both for multinationals and for local companies seeking to expand regionally or globally. But potential is not enough. To realize that potential, companies must choose the right growth strategy – one that fits their expertise, resources, budgets and growing ambitions.

Figure 1 illustrates both the potential in Asia Pacific in terms of demographics and the need for affordable therapies. China’s population age 65 and over is forecast to almost triple by 2050 – to 27.6 percent of its population from 9.6 percent now. Japan, with a gross domestic product per capita almost five times greater than China’s, already is heavily burdened with the cost of caring for its elderly – 26.3 percent are now age 65 plus, expected to reach 36.3 percent by 2050.

To realize the enormous potential in Asia Pacific, companies must choose the right growth strategy – one that fits their expertise, resources, budgets and growing ambitions.


Figure 1 Growing & aging populations in Asia, and wide disparity economically

MarketPopulation change

2015-2050i

Percent of population 65+

2015-2050i

GDP per capita (current US$)ii 2014

Global2015 – 7.35B2050 – 9.73B

2015 – 8.3%2050 – 16.0%

US$10,595*

Asia2015 – 4.39B2050 – 5.27B

2015 – 7.5%2050 – 18.2%

US$9,002

China2015 – 1.38B2050 – 1.35B

2015 – 9.6%2050 – 27.6%

US$7,594

Japan2015 – 126.6M2050 – 107.4M

2015 – 26.3%2050 – 36.3%

US$36,194

South Korea2015 – 50.3M2050 – 50.6M

2015 – 13.1%2050 – 35.1%

US$27,971

Australia2015 – 24.0M2050 – 33.5M

2015 – 15.0%2050 – 22.5%

US$61,887

ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam)

2015 – 633.5M2050 – 792.1M

2015 – 5.9%2050 – 15.6%

US$3,911

i United Nations, Department of Economic and Social Affairs, World Population Prospects, the 2015 revisionii The World Bank, World Bank Open Data

Even with rising incomes, many citizens lack basic health insurance, and reimbursement options for prescribed drugs are limited. The result is that many of these markets cannot afford drugs priced for developed economies. They need affordable therapies, and to be successful in this space, biopharma companies have to find innovative ways to cut time and costs from their development process so they can deliver safe, efficacious, value-based treatments at acceptable prices while still generating a profit.

They also need evidence to persuade payers that their affordable medicine delivers as much or greater value than competing products. Otherwise, no matter how innovative or game-changing their products are, drug developers will price themselves out of the market or lose to competing products with greater evidence of value.

The quest for cost efficiencyMany biopharma companies in Asia are already keenly focused on delivering affordable therapies. The region has mastered the art of “reverse engineering,” enabling regional manufacturers to effectively support generic anti-retroviral medicine supplies for the entire world. And the market will continue to grow. A report from Frost & Sullivan says the generics market is expected to grow at a compound annual growth rate of 17 to 18 percent between 2014 and 2018, with India, South Korea, Japan and other Asian countries offering the biggest market for these products.1 The Japanese government, for example, is considering raising the share of generic drugs to 80 percent or more between fiscal 2018-2020 to curb medical costs and rebuild state finances. About 1.3 trillion yen (about US$10.8 billion) could be saved annually by doing so, according to estimates.2


And generics aren’t the only inexpensive option making waves in the region. Biosimilars also promise to bring a new generation of affordable biologics to these consumers, at a much lower cost than the originator, creating increased access to life-saving treatments for lower-income populations.

Even with generics and biosimilars, developing a product that can meet the price point of an emerging market still requires careful planning and a strategic cost-focused approach to innovation. When developers take the time to plan their projects carefully, they leverage the expertise and knowledge of regulators, industry leaders and strategic partners to slash costs to deliver cost-effective treatments that deliver immense value to their customers and their own bottom line.

Biosimilars: Opportunity awaits

Biosimilars offer a huge opportunity in Asia to bring effective treatment options to a population desperate for cost-effective treatments. The global biosimilars market is expected to reach US$35 billion by 2020, up from only US$1.3 billion in 2013.3 The developers who figure out how to develop and market these drugs effectively will be well positioned to succeed in this market.

Currently, the average cost of developing of a new pharmaceutical drug has risen to roughly US$2.6 billion,4 making this development path prohibitively expensive in an affordable therapies environment. Because the cost of these innovator biologics often is very high, they put an extreme strain on healthcare budgets in markets where such therapies are reimbursed, and make them prohibitively expensive where they are not. But the surge in expiration of patents on blockbuster biologics is giving drug developers in the region a new path to gain competitive advantage with biosimilars.

Biosimilars are copy versions of already-approved originator biologics that can be marketed after the originator’s patent expires. The safety and efficacy of the innovator product is already established, and biosimilars are allowed to be developed and evaluated using an abbreviated pathway based on biosimilarity principles, giving Asian biopharma companies an opportunity to create products that meet unmet medical needs at prices that even developing market customers can afford. In India, for example, a biosimilar of etanercept for rheumatoid arthritis has been priced at 70% of the branded price5 and in Japan, pricing regulations similarly state that biosimilars are to be priced at 70 to 77 percent of the branded drug price.6

But getting a biosimilar into the marketplace can be a lot more complicated than producing a small molecule generic, due to the inherent complexity of working with cell banks, which are living cells. To succeed in this space, developers will need strong manufacturing capabilities, and they should consider partnering with other clinical trial experts across the market to achieve efficiencies, and to avoid the pitfalls that might otherwise derail their progress.

Biosimilars offer a huge opportunity in Asia to bring effective treatment options to a population desperate for cost-effective treatments.


Keys to a successful biosimilars development program

Developers who follow these steps can avoid common pitfalls and ensure their project plan is best positioned to efficiently deliver these products to market.

Understand the reference product thoroughlyUnlike generics, which are identical reproductions of a small molecule reference product, biosimilars are highly similar copies produced in living cells. For biologics (and biosimilars), even small changes in the process can result in a product that does not deliver the same safety and efficacy as intended. “Reverse engineering” a biologic is not as straightforward as for a chemical entity. Therefore, it is important to understand the reference product thoroughly.

Tips:

Before starting down this path, research the originator drug inside-out to make sure you understand how it was designed, and what pitfalls the original developers faced. Analyze multiple batches of reference product to understand the variability across different batches and over the entire shelf life. Develop your own version of biosimilar accordingly taking into account this information.

Understand the pharmacokinetics (PK), pharmacodynamics (PD), mechanism of action (MoA), safety and efficacy profile of the reference product. Design your development program accordingly.

Make sure you understand the time, resources and expertise you will need in order to demonstrate consistent results with your copy.

All biologics are given parenterally; however, specialized delivery devices, such as an autoinjector, are frequently used for administration. Pursuing these projects simultaneously will shorten the time to market, and ensure you address regulatory requirements for this critical piece of the approval process.

Ensure that a sound infrastructure for maintenance of distribution and supply chains exists in the market to support the development and distribution of your product.

Finally, keep in mind that the entire process requires more time, expertise and testing than a generic drug, and may require you to tap outside experts to ensure you avoid costly mistakes and chart the most direct route to regulatory approval.

Get regulatory advice early on Biosimilars are a relatively new and rapidly evolving field, and not all regulatory agencies have fully settled on an approval process. While many countries have introduced an abbreviated pathway for biosimilar approval and have issued supporting guidelines, there are variations among them that must be accounted for during your project planning process. Developers also have to be certain they understand exactly what data authorities expect to win approval. This will allow optimization of the development program and help avoid surprises during the marketing application assessment process.

Tips:

Identify which markets you want to enter into and what the guidelines are as part of the planning process. This will help you gather the appropriate data to show the biosimilar provides the same therapeutic benefit and risk profile to patients as the reference product.

Meet with the key regulatory agencies early on during the development of your biosimilar product to discuss your development strategy and the design of your comparability studies. This feedback can be key in optimization of your development program.

Follow up with regulators periodically to ensure you are on the right track.

“Reverse engineering” a biologic is not as straightforward as for a chemical entity. Therefore, it is important to understand the reference product thoroughly.


Do not try to replicate the innovator’s clinical development program The safety and efficacy profile of the innovator product is already established, which means there is no need – or regulatory expectation – to replicate the clinical development program followed by the innovator. In addition, the development program implemented by the originator may now be antiquated, thus requiring newer biochemical assays and modifications due to new Chemistry, Manufacturing and Controls (CMC) requirements by both the U.S. Food and Drug Administration and the European Medicines Agency.

Tips:

Identify clinical end-points that will be appropriate for the objective of demonstrating comparable efficacy and safety (including immunogenicity). Programs focusing on PK & PD where appropriate should also be explored.

Remember, regulatory agencies are open to accepting innovative study designs as well as end-points that are different from those utilized by the innovator product.

To be certain you are on track, discuss your clinical study design and end-points with the regulators before you embark on your clinical studies.

Address obstacles to commercialization up frontMarketing biosimilars is a complex proposition and requires special manufacturing and marketing needs. Because many biosimilars manufacturers in the region do not have these capabilities in-house, they often choose to enter the market with one or more partnerships to fill in the knowledge gaps and help them achieve efficiencies while de-risking their market strategy.

Whether you are going it alone or working with partners, you need a sound commercialization and marketing plan that focuses on communicating with prescribers about the safety and efficacy of the biosimilar in order to generate new prescriptions.

Tips:

Treat a biosimilar like a new category of drug, and train sales staff on how to effectively communicate the value proposition on these medicines.

Include supporting real-world evidence and device usability information in the sales pitch to alleviate uncertainties and demonstrate value to target prescribers.

Offer patient support, e.g., nurse educators to train the end users, i.e. those administering the drugs to patients and the patients themselves.

Biosimilars have become a popular development path, which means when many of these drugs come to market they may face a lot of competitors, which can lower the potential return on investment.


Consider the competitionBiosimilars have become a popular development path, which means when many of these drugs come to market they may face a lot of competitors, which can lower the potential return on investment. The biosimilars market is already quite crowded in the early clinical development phases with products copying the first wave of originators to hit their patent cliff. For this process to be profitable, biopharma companies must choose their target products carefully.

Tips:

Identify the target based on your intended market, current biosimilar and new chemical entity (NCE) competition, and the anticipated ROI. Consider how your biosimilar will compete with newer novel technologies as well as “bio-betters” in clinical development.

Consider accelerated approaches when possible (e.g., launching your Phase III program based on interim Phase I safety data).

Work with your patent attorney to make sure that the patent expiration that you expect is highly likely. Budget for potential patent challenge scenarios (base case, upside and downside case).

Back track – and plan out – your clinical program based on your anticipated patent expiration.

Think strategically about what potential drug you have the greatest knowledge and capacity to develop, and one that you think you can deliver faster or for less money than your competitors.

Calculate the cost to produce and evaluate if your molecule can still return a positive ROI.

Further differentiate your product by focusing on aspects such as device, marketing, patient support programs, etc. Gather evidence of value using real-world and late phase research.

Keep biosimilar, NCE, bio-better and device competition in mind when selecting which markets to access for your biosimilar. Choose destinations where your product can gain a competitive advantage in terms of cost or delivery system. Research reimbursement trends and expectations around discounts as part of this process.

If it doesn’t add value, it’s not worth doingWhether you are developing a generic drug, a biosimilar, or a disruptive new treatment, frugal innovations emerge when developers first identify their ultimate development goals, then comb through their entire project lifecycle looking for ways to achieve those goals more quickly and cheaply than they thought possible.

There is a rule of thumb that says “every day that your drug isn’t in the marketplace, you lose a million dollars in revenue.” While the precise dollar amounts may fluctuate, the underlying message is clear – time wasted is money lost. So when making decisions, ask yourself: “If we do this will it help us get to market sooner, or improve our odds of approval?” If the answer is no, then don’t do it.

One of the key steps a biotech firm can take to integrate this philosophy into their development culture is by making sure their trials are designed to gather only the data they need for approval – and nothing more. It can be tempting to throw additional far-reaching questions into a trial protocol, but every additional piece of information collected can have cascading impact on the success of the project.

From an operational standpoint, gathering additional data adds time and overhead, and may require additional staff training or access to more complex facilities. From the patient perspective, you may inadvertently eliminate otherwise qualified participants. This is a major risk as Asia has become a crowded and competitive marketplace for drug trials, and interested participants may have several biosimilar programs to choose from, not to mention NCE candidates vying for the same patients (e.g., sponsors for Avastin biosimilars compete with PDL-1 developers for NSCLC patients).

When making development decisions, ask yourself: “If we do this will it help us get to market sooner, or improve our odds of approval?” If the answer is no, then don’t do it.


10 steps to frugal innovation

To avoid wasted time and lost revenues, our experts assembled these ten tips for achieving frugal innovations in the drug development lifecycle.

Know what you need to do before you start doing it. Too often biopharma companies fast track the planning

process as a way to cut costs, only to realize later that they have gone in the wrong direction, forcing them to backtrack. Instead, take the time to plan the project effectively and get feedback from outside experts to make sure your plan is sound.

Stick to the basics. Don’t ask additional questions or gather data that isn’t absolutely necessary. If all

you need to do is prove safety, or demonstrate efficacy in a certain population, stick to those parameters and don’t stray with “nice to have” additional data points.

Outsource non-core tasks. Now is not the time to develop new expertise in house, it is a time for

speed and efficiency. Outsourcing non-core tasks to experts who have the knowledge and resources to run them more efficiently ensures you get to market faster with the lowest risk of error.

Condense start-up steps. Conduct activities like contract negotiations, protocol writing and ICF preparation

in parallel to streamline this phase of the project. When done effectively you cut weeks from your start-up process.

Talk to regulators and experts about your plans. Getting outside perspective from people who have

been down this path can help you see where your development plan has gaps, and/or identify the steps that will add little value to your target goal.

Work with opinion leaders. Invite respected physicians and other experts to sit on your board

and to offer feedback on your research. Their early support can generate validation for your efforts and help you recruit patients to your study.

Avoid massive infrastructure investments. If you can partner with an existing entity to take

advantage of their technology, facilities or human resources, take full advantage. Harnessing the expertise and resources of a trusted vendor will cut time and overhead costs from your budget.

Make it easy for patients. When crafting a trial, look at every step in the process and determine whether

it is absolutely necessary – especially if it requires extra time or discomfort for the patient. The easier the trial is to participate in, the more likely you are to find recruits.

Locate trials strategically. Before launching a trial, determine which markets you want to access,

and whether these patient populations will fulfill regulatory requirements. You also want to look for cities that have existing infrastructure, knowledgeable patient populations, and physicians who are eager to help their patients get into trials.

Don’t delay. Every day that you put off decision-making costs you money, and if you

wait too long, that market disruption will likely be brought to market by someone else.


The bottom line

The Asian market offers huge potential for local and global biopharma companies to develop innovative treatments to meet the needs of huge underserved populations. But these companies will only be successful if they strip away excess time and cost from their development process so they can deliver value-driven products that are priced to meet market demands. That requires careful upfront planning, and collaboration with regulators, payers and practitioners, to ensure protocols will deliver exactly the data needed. Savvy biopharma companies will look for partners to help them implement innovative strategies to streamline recruiting, regulatory approval and market access efforts so they can get these products to market faster and at a lower cost than their competitors.

There is a short window of opportunity for biopharma companies to gain a competitive advantage in this fast-growing region. The companies that take quick but thoughtful action will be best positioned to lead in this marketplace for years to come.


References

1. Dutta S, Patent Cliff and the Future of Generics in Asia. Frost & Sullivan. December 2014.

2. The Japan Times, Ministry aims to boost market share of generic drugs. May 20, 2015. http://www.japantimes.co.jp/news/2015/05/20/national/science-health/new-target-planned-generic-drug-use/. Date accessed: October 2015.

3. Allied Market Research, World Biosimilars/Follow-on-Biologics Market – Opportunities and Forecasts, 2014-2020. September 1, 2015. http://www.marketresearchreports.com/allied-market-research/world-biosimilarsfollow-biologics-market-opportunities-and-forecasts-2014. Date accessed: October 2015.

4. Mullin R, Cost to Develop New Pharmaceutical Drug Now Exceeds $2.5B. Scientific American. November 24, 2014. www.scientificamerican.com/article/cost-to-develop-new-pharmaceutical-drug-now-exceeds-2-5b/. Date accessed: September 2015.

5. Cipla press release, Cipla launches the first Biosimilar of Etanercept in India under the brand name ‘ETACEPT’ for the treatment of Rheumatic Disorders. April 17, 2013. Date accessed: September 2015.

6. DataMonitor, Pipeline and Marketed Biosimilars/Copy-Biologics. Japan: Biosimilars update. September 2011. HC00154-002.

Contact usAsia Pacific direct: +65 6602 1245 Website: www.quintiles.com Email: [email protected] C

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Dr. Anand Tharmaratnam, MBBS, MRCAPresident and Head of Asia Pacific Dr. Anand Tharmaratnam has extended responsibility for Quintiles’ clinical development and market access businesses across Asia Pacific – including China and Japan, the world’s second- and third-largest biopharmaceutical markets, respectively. Quintiles has 12,000 employees in more than 30 locations across Asia Pacific.

He joined Quintiles in 1997 and over the next seven years held positions of increasing responsibility in Europe, India and Japan. In 2004, Dr. Tharmaratnam moved to Singapore and was appointed Chief Executive Officer of Quintiles Southeast Asia, Taiwan and Korea. He has subsequently taken responsibility for all clinical development in Asia Pacific. In 2015 Dr. Tharmaratnam was named “Best Life Science Asian Male Executive of the Year” in the BioPharma Asia Industry Awards.

Dr. Tharmaratnam earned his medical degree (MBBS) from University College London, UK. He is also a member of the Royal College of Anesthetists, UK (MRCA), and sits on the National Medical Research Council of Singapore.

Simranjit SinghSenior Director Strategic Planning Asia PacificGeneral Manager Medical Devices & Diagnostics AsiaMr. Singh leads the process to understand, synthesize and communicate market trends, client needs, and competitive intelligence in Asia Pacific. He provides thought leadership on key market events and collaborates with Quintiles’ global and Asia Pacific leadership teams to incorporate market and competitive intelligence into strategic approaches for the region.

He also leads Quintiles Medical Devices & Diagnostics business in Asia Pacific, and has been instrumental in putting together Quintiles’ strategic partnerships with several medical device companies. Mr. Singh also serves as chairman for BioSingapore, an industry association that plays an integral role in developing Singapore’s biomedical sector.

Mr. Singh holds a bachelor’s degree in biomedical sciences from the National University of Singapore and earned his MBA from the Graduate School of Business, University of Chicago. He also has a graduate diploma in bio-entrepreneurship from the University of Pennsylvania.

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whitepaper affordable therapies gaining a competitive advantage in asia pacific

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