Revenue from the European biosimilars market will reach nearly $4 billion by 2017, analysts have predicted.

The market is estimated to grow at an annual rate of 56.7% in the next five years with the expirations of key patents and intellectual property providing opportunities for manufacturers.

Srinivas Sashidhar, Research Analyst at Frost & Sullivan, said upcoming opportunities will see various biosimilars enter the market and increase industry competition.

Frost & Sullivan estimates that the European biosimilars market earned revenue of around $172 million in 2010. It recognises that the industry is at a “nascent stage”, but will experience significant growth within the next decade.

But while the market offers lucrative growth prospects, smaller firms may struggle with the sizeable investments needed to exploit these opportunities.

Complex production processes, expensive biological and chemical materials and rigorous clinical trials will require significant investment and may require small and medium sized firms to merge or partner with pharmaceutical companies.

“Price reduction strategies will ensure increased adoption among physicians and patients alike, spurring market advancement,” said Srinivas Sashidhar.

“The need for considerable financial outlays will hinder the entry of small biotech firms in particular. On the other hand, specialty pharmaceutical companies with biotech expertise and financial capabilities are well positioned to venture into the biosimilars market.”

However, despite the expected growth, Frost & Sullivan warn there are still persistent uncertainties and risks for biosimilars manufacturers. Companies will need to have strong integrated R&D, production and sales and marketing divisions to ensure market access and success. Effective sales communication coupled with continuous promotional activities and constant interaction will also be key to realising potential growth, Srinivas Sashidhar added.

Patent applications for biologics by leading pharmaceutical companies are surging further ahead of applications for small-molecule drugs, according to a new report.

Another report notes that the next few years will offer major opportunities for pharma companies to develop biosimilars.

Both of these findings reflect the increasing importance of biotechnology in drug development.

Research by patent law specialist Withers & Rogers shows that while the number of patent applications for biologics has exceeded that for small-molecule drugs for 15 years, the gap has widened rapidly since 2007.

The legal firm’s analysis of the top 10 global pharma companies reveals that the gap between the numbers of patents filed for biologics and for small molecules grew by 14.5% between 2007 and 2009.

By 2009, 60% of the drug patents filed by these companies were for biologics.

Novartis made the greatest number of patent applications for biologics in 2009, followed by Johnson & Johnson and Merck & Co.

Nicholas Jones, patent attorney at Withers & Rogers, said that despite the impact of “economic uncertainty and cost pressures facing big pharma as blockbuster drugs hit the patent cliff, R&D interest in biologics has remained strong.”

He noted although “it is considerably easier to develop and manufacture small-molecule drugs”, major drug companies may be “increasingly willing to compete with major generics producers for a share of the follow-on biologics market”.

Growth partnership company Frost & Sullivan (F&S) reached the same conclusion in a report on the growing opportunity for biosimilars in the European drug market, where numerous blockbuster biologics are nearing the patent cliff.

However, the report noted, the cost of developing and manufacturing biosimilars makes them financially a more high-risk option than conventional generics.

Srinivas Sashidhar, Research Analyst at F&S, said: “$100 billion worth biologics are expected to go off patent by 2020, as a result of which the market is likely to hold significant potential.”

Before this potential can be exploited, he commented, “Improvements concerning the manufacturing and the clinical development processes of biosimilars have to take place.”

The report predicted the European biosimilars market will grow from $172m in 2010 to $3,987 in 2017, at a CAGR of 56.7%.

To overcome the challenges in the way of access to the growing biosimilars market, Sashidhar said, “Collaborations among large pharmaceutical companies with financial capabilities and specialty biotech companies with technical expertise are expected. The strong integration of marketing and research and development skills is the key to success in the biosimilars market.”

F&S expects the growing biosimilars market to drive growth in such therapy areas as diabetes and oncology, where biologics are having the greatest impact.

The European market for multiple sclerosis (MS) treatments is suffering from a lack of innovative treatment options and wider disease awareness, a new report says.

According to growth analysts Frost & Sullivan, more patient-friendly therapeutic systems – such as oral rather than injectable drugs – would improve clinical outcomes in this difficult area.

Sub-optimal diagnosis and treatment reinforce the perception that MS is ‘untreatable’, resulting in poor patient compliance, the report notes.

F&S estimate the European MS drug market – immunosuppressants, immunomodulators and corticosteroids – at $3.2 billion in 2010, due to reach $5.38 billion in 2017.

A chronic and often fatal neurodegenerative disease, MS affects nearly 550,000 people in the EU.

According to F&S Research Analyst Deepika Pramod Chopda, “The rising number of people suffering from MS is resulting in higher demand for therapeutics. This, coupled with strong pipeline development, is pushing robust growth in the overall market.”

However, he noted, poor disease awareness and patient compliance are limiting progress in this therapy area. “Refined drug delivery technologies, mode of drug delivery (oral or injectable), and several other factors will encourage the use of MS drugs among patients,” he said.

“Novel treatment options will also promote the concept of combination therapies, accelerating market development.”

In addition, Deepika said, the lack of sensitive diagnostics is limiting the application of drug therapies.

“Non-compliance with MS treatment procedures remains a major challenge,” he argued. “Establishing end-user confidence has become difficult due to unsatisfactory therapeutic results.”

The solution, he said, lies in public education through healthcare forums and organisations of the more innovative treatment options, combined with measures to make such options more widely available.

Regulations favouring generic products and wider health insurance coverage by governments and private bodies are expected to boost generic consumption, analysts predict.

Frost & Sullivan expect the generic pharmaceutical market to peak this year after the patent cliff left ‘blockbuster’ drugs worth $150 billion facing generic competition.

Aiswariya Chidambaram, Research Analyst at Frost & Sullivan, said there were lucrative opportunities for generic manufacturers and “careful choice of product segments and appropriate time of entry” will allow them to “sustain amidst intense competition”.

The global generic market was estimated to be worth $123.85 billion in 2010, growing at an annual rate of nearly ten per cent.

The US, Germany, UK, France, Japan, Canada, Italy and Spain are the top eight global markets and account for 80% of total worldwide sales.

In Europe, high generic penetration in Germany and the UK provides very little growth opportunity. Markets such as France, Italy and Spain do offer growth opportunities, but researchers warn pricing policies, incentive schemes and regulatory frameworks pose market access challenges.

The two largest therapeutic areas are currently Central Nervous System and cardiovascular, accounting for nearly 38% of the global market. However, analysts predict rheumatology, oncology and respiratory are likely to witness significant growth in coming years.

Analysts predict that the diversification of product portfolios, vertical integration across the value chain and the potential of emerging markets will be the main drivers of acquisitions growth by generic companies.

Also, an increase in the number of partnership deals by generic companies is expected by Frost & Sullivan in the future as reliance upon M&A, rather than organic growth to compete against industry competitors is sought.

The European biosimilars market is expected to reach nearly $4 billion by 2017 after the expiration of patents and other intellectual rights opens new opportunities, a new report predicts.

Frost & Sullivan’s Analysis of European Biosimilars Market predicts the industry will record annual growth of more than 50% in the next five years as physicians and patients search for cheaper medication.

Srinivas Sashidhar, a Frost & Sullivan Research Analyst, says the next decade “opens up opportunities for biosimilars to enter the market and increase industry competition”.

The report notes that the biosimilars manufacturing industry is at a nascent stage. The market earned revenue of around $172 million in 2010, research found.

However, while there are plenty of opportunities for growth, the market will require sizeable investment – especially smaller firms. Complex production processes, expensive materials and rigorous clinical trials require significant investment, the report adds.

“The need for considerable financial outlays will hinder the entry of small biotech firms in particular,” warns Mr Sashidhar. “On the other hand, specialty pharmaceutical companies with biotech expertise and financial capabilities are well positioned to venture into the biosimilars market.”

Another obstacle the market faces is high manufacturing costs. But, the report says, viable prospects for licensing agreement between companies should overcome this. “Access to sales and marketing capabilities can be achieved through collaborations between pharmaceutical companies and specialty biotech firms with technical expertise,” said Sashidhar. “Companies can build sales and marketing capabilities in-house and ensure effective marketing support for the commercialisation of biosimilars.”

If the market is to realise its potential in the next decade, the report advises effective sales communication to the scientific community, coupled with continuous promotional activities as well as close and constant interaction with doctors and pharmacists.

The global generic market is likely to capitalise on the patent expiration of a host of blockbuster drugs in the next five years, a new report predicts.

Frost & Sullivan’s Generic Pharmaceuticals Market – A Global Analysis estimates that revenues will increase at an annual rate of nearly 10% and reach $231bn in 2017 as governments and healthcare service providers search for cheaper medication.

Several major brands worth $150bn between 2010 and 2017 will lose exclusivity which Aiswariya Chidambaram, a Frost & Sullivan research analyst, says will “fuel the growth” of the market.

The report found that leading generic manufacturers have been creating strategic alliances with pharma companies for marketing rights and the exclusivity in producing generic versions of blockbuster products such as Lipitor, Cozaar and Crestor.

Market leaders such as Teva, Sandoz and Mylan are also focusing their efforts on biosimilars to provide a competitive edge that also presents huge profit gains.

However, the report adds, one potential obstacle which may prevent growth is austerity measures imposed by governments around the world.

Instead, generic manufacturers should focus on the product segments they wish to compete in and the appropriate time of entry into the market if they are to be successful, the report advises.

“Large multinational generic firms need to adopt a differentiated approach by opting for products with technologically challenging formulations, products which require significant regulatory support and products with limited availability of active pharmaceutical ingredients (APIs),” said Aiswariya Chidambaram. “Small and medium-sized firms should focus on products with relatively higher profit margins.”

University College Hospital (UCH), London has purchased the UK’s first Biograph mMR hybrid molecular MR system (pictured) from Siemens Healthcare.

In the same month, the hospital’s Institute of Nuclear Medicine brought together clinical scientists to celebrate its 50^th anniversary.

The Biograph mMR – one of the first to be installed in Europe – will be housed in the UCH Macmillan Cancer Centre and used for diagnosis and planning of patient treatment, as well as research.

The world’s first simultaneous whole-body PET-MRI scanner. the Biograph mMR has won the red dot design award 2011 and the Frost & Sullivan Best Practices Award 2011 for its integrated design and scanning capabilities.

At the Institute of Nuclear Medicine’s 50th anniversary, Bruce Rosen, Professor of Radiology, Health Sciences and Technology at Harvard Medical School, gave a lecture on the future of combined PET and MR.

UCH Chairman Richard Murley thanked the UCLH Charity for funding the purchase of the new scanner.

Professor Peter Ell, former Head of the Institute of Nuclear Medicine, summed up half a century of medical imaging, including the first European nuclear medicine brain scanner in the 1970s; the first dedicated mobile renal function apparatus in the 1980s; and the introduction of PET-CT in cancer management.

The revised Health and Social Care Bill remains contentious, but appears likely to pass into legislation. Simone Carron-Peters of Frost & Sullivan analyses its probable impact on the UK healthcare market.

The Government’s contentious Health and Social Care Bill has raised many concerns among the various stakeholders. The eight-week NHS listening exercise conducted by the NHS Future Forum has resulted in the proposal of multiple changes to the Bill, whose passage towards legislation is summarised in Figure 1 below.

This article evaluates the planned NHS reforms for impact on the health system and the life science industry.

Overview of the Bill

The Health and Social Care Bill proposes to create an independent NHS Board, promote patient choice and reduce NHS administration costs.
Its key focus areas are:

• To establish an independent NHS Board to allocate resources and provide commissioning guidance.
• To increase GPs’ powers to commission services on behalf of their patients.
• To strengthen the role of the Care Quality Commission.
• To develop Monitor, the body that currently regulates NHS Foundation Trusts, into an economic regulator to oversee aspects of access and competition in the NHS.
• To reduce the number of health bodies, including abolishing PCTs and SHAs, in order to help the Government cut NHS administration costs by one-third.

More power (and money) to the GPs

In its initial form, the reform aimed to improve the quality of service delivery by devolving NHS commissioning powers and responsibility into the hands of GPs. The GP consortia would receive budgetary allocations from the new NHS Commissioning Board, which would be responsible for managing and allocating about £80 billion of the health budget. The consortia would, in turn, devolve the funds to the various practices under them.

The new GP consortia would replace the 302 PCTs in England, which would be abolished by 2013. All NHS trusts were set to become Foundation Trusts by April 2014. It was anticipated that the consortia would require significant assistance, including support from the private sector, in exercising these new commissioning functions.

Medical organisations and NHS trusts were immediately sceptical about the implementation of this reform, saying that the changes could have negative effects on NHS services. Some trusts argued that it is risky to reduce the central grip on commissioning at a time where urgent savings are being made. Others agreed that GPs are well positioned to make decisions on the use of resources for their patients.

The BMA: a critical response

The reform plans have also not gone down well with the British Medical Association (BMA), who expressed concerns about the level of responsibility being bestowed on GPs. One of the BMA’s major concerns was the lack of clarity in the Bill with regard to the roles that the GP consortia would be expected to perform. The BMA also believes that it is important to ensure the funding for GP practices remains distinct from other budgets, as it would cause significant complications if GP consortia were to be made responsible for amalgamated budgets that included the management of standard GP contracts.

Currently there are about 177 GP ‘pathfinders’ (pilot groups of GPs testing the system’s concepts and functions) who are taking the lead in implementing the new commissioning roles.

In May 2011, the BMA’s Health Policy and Research unit conducted a national survey of GP opinion that received a response rate of 39%. The survey findings revealed an alarming 55.8% of the respondents citing NHS reforms as a reason for their intention to retire in the next two years. That figure was composed of 59.4% of the 688 principal or contracted GPs, 41.1% of the 30 employed salaried GPs and 35.8% of the 39 freelance GPs who participated in the survey.

The survey also asked GPs how confident they were that the GP commissioning consortia would be appropriately skilled and supported. 65.6% were ‘not confident’ that the consortia would be appropriately skilled, while only 15.8% were ‘confident’ that they would be. In addition, 70.9% of the respondents stated that they were ‘not confident’ that the consortia would be supported, while just 10.2% were ‘confident’ that they would be.

Amendments to the Bill

Based on the recommendations of the NHS Future Forum, the Health Secretary announced changes to the Health and Social Care Bill in June 2011. The Bill is due for its third reading on the 6th and 7th September 2011.

The role and functions of GP consortia are now better-defined. The consortia – now called Clinical Commissioning Groups (CCGs) – would be required to publish details on their constitution and how the allocated budgets have been used. They would also be required to follow guidelines from, and be accountable, to the NHS Commissioning Board. GPs are also bestowed with a responsibility to promote research and innovation.

The plan for all NHS trusts to become Foundation Trusts by April 2014 has been amended. NHS trusts would become Foundation Trusts by 2016, based on their clinical readiness for transition. They would be given the liberty to make use of private health treatments, and would compete among themselves for patients.

The role of the National Institute for Health and Clinical Effectiveness (NICE) would increasingly focus on giving authoritative advice to clinicians on when and how the most effective treatments can best be used, and also on the development of quality standards for the NHS to aim for in the treatment of certain conditions.

Value-based pricing (VBP) would replace the Pharmaceutical Price Regulation Scheme (PPRS), which has existed since 1957. The purpose of VBP is to improve NHS patients’ and clinicians’ access to effective and innovative drugs and medical technologies by ensuring they are available at a price that reflects their value, based on an assessment of the outcomes they can achieve.

Impact assessment of the health reforms

The implementation of the Health and Social Care Bill will witness an increase in private sector and voluntary involvement in the delivery of healthcare. GP commissioning will allow the use of private healthcare for NHS patients. Healthcare vendors and providers can capitalise on this shift by offering products and services best suited to patients’ needs in order to influence GP commissioning.

The aim of value-based pricing is not to achieve the lowest price possible, but to encourage the development of new therapies and promote innovation. The principle of linking the price of innovations to their value has already received support from a broad range of stakeholders.

The priorities of the health reforms are ambitious; if instituted, they will have far-reaching effects on the way the British public accesses the health system. It will also affect the role of the private sector in the UK healthcare system, increasing opportunities for private providers of both clinical and support services to become involved in providing healthcare to NHS patients.

According to the Government’s calculations, the reforms will bring about a huge cost saving for the NHS. However, negative consequences such as redundancy for administrative staff in the health authorities will pose a huge socio-economic threat.

How will the savings affect the prospects for innovative medical technologies? The adoption of such products has always been necessary for medical professionals, predominantly because new technology aims to provide healthcare at a quicker rate – minimally invasive technologies being a major example. The Government has vowed to ensure the system delivers effective and appropriate healthcare to all who need it. Moreover, GPs have a greater understanding of patients’ needs than the managers or PCTs who at present make funding decisions. Thus the demand for innovative devices will arise regardless of the allocated NHS budgets.

One of the main objectives of the reforms is to put patients and public first by implementing a ‘no decision about me without me’ policy. National standards and independent inspection will continue to assure patients that all NHS-funded services are safe and of a high quality. Patients will have much more information about individual services and their performance, enabling them to choose the services that best meet their needs.

The reforms will ensure that services are easier to access and more responsive. Shorter patient waiting times, one-stop clinics for diagnostics, and increased provision of healthcare in patients’ homes are some examples of services that are likely to develop in response to new incentives. Patients will be able to gain access to healthcare in new ways that are more flexible. This is likely to mean more services delivered in local communities, such as urgent, preventative and rehabilitative care, thus helping to avoid unnecessary hospital admissions. Better information will help patients to understand and make the best use of the options available.

The reforms will also support services to become more integrated. Improved information systems will play a key role, enabling healthcare providers to exchange clinical data more easily and so gain a complete view of the patient’s condition. Increasingly, there will be opportunities for patients to influence the pattern of services within their locality. Local practices will have incentives to provide locally-based health improvement and health protection services. Patients will be in a better position to manage their own health.

Financial goals

The Government is confident that the health reforms will allow it to save billions. Figures from the Impact Assessment published alongside the Health and Social Care Bill earlier this year claim that the structural reforms to the NHS will save £5 billion per year, though this is a gross rather than net figure. The Bill promises to reduce NHS administrative costs while promoting patient choice. However, time alone will tell whether these reforms prove to be economic.

 

Simone Carron-Peters is a Research Analyst for growth consultants Frost & Sullivan.

A new ultrasound scanning technology that enables accurate tissue characterisation, improving the management of cancer, has won the 2011 Frost & Sullivan Europe Technology Innovation Award.

Belgian company Advanced Medical Diagnostics (AMD) has won the award for its development and commercialisation of the HistoScanning technology, used in treatment of prostate cancer.

Frost & Sullivan Research Analyst Darshana De said: “Prostate HistoScanning is an innovative ultrasound-based application that utilises advanced tissue characterisation algorithms to visualise the position and extent of tissue suspected of being malignant in the prostate gland.”

He added that “its design is quite unique and superior to other ultrasound-based technologies.”

The technology offers comparable efficacy to MRI in cancer detection while having greater ease of access and use. Clinical studies have shown that it can detect significant cancer lesions with 93% sensitivity.

De noted: “Prostate HistoScanning offers the simplicity of ultrasound and results that are comparable to MRI in a format that can be made available to all patients in the physician’s office.”

More than 7,000 patients in the EU have undergone Prostate HistoScanning, which has been shown to reduce the number of prostate biopsies by 30% through its ability to make biopsy procedures more selective.

“This technology is serving an unmet need in the management of cancer patients and therefore has the potential to significantly change the current clinical pathway and reduce overall costs,” De commented.

Applications of HistoScanning could be extended to detection of breast cancer and other solid tumours.

The Frost & Sullivan Best Practices Awards recognise companies that have shown outstanding achievement and performance. The Technology Innovation Award is based on assessment of the uniqueness of a new technology, its relevance to industry and its impact on new products, functionality and customer value.