Generic Drugs Michael Mc Namara May 12

Generic Drugs
3rd Year lecture in the “Biotechnology in
Practice” course, University of Melbourne
May 2012

Michael McNamara
MSc MRACI C Chem
Pharma & Biotech Innovation
ph 03 94997193 mobile 0407713768
1 michael.mcnamara@live.com.au PBI

Michael McNamara
Biography
 Over 25 years senior management experience in multinational
agriculture, biotechnology and pharmaceutical companies

 Specialist in innovation in the biotech and pharmaceutical sectors
with a focus on the development of human therapeutics

 Research interests include drug delivery involving conventional
and nanotechnology approaches

 Senior management positions in CSL, Fauldings, Mayne Pharma
and Hospira including R&D Director at Mayne and Hospira.

 Experience with simple & complex generics including non-
infringement of patents and biosimilars

 Consultancy in biotech and pharmaceutical areas established in
2 2009

Generic Drugs – Key Questions
Questions you should be able to answer at the end of this lecture

 What is a generic?

 How might biotechnology be involved in generics?

 Why do generics businesses exist?

 How do generics businesses survive?

 How do generics businesses manage intellectual property issues and in what
way(s) is this different to a non-generic bio / pharma company?

 What might happen to the quality of healthcare if there were no generics
3 companies?

Summary of Approach
 What is a generic?
– Simple generics
– Complex generics, super generics generics
– Biosimilars

 Commercial Aspects
– Market Size and Opportunity
– Product lifecycle and generics businesses
– Cost pressures and globalisation in the generics business

 Intellectual Property
– IP Protection for Drugs
– The innovator strategies
– The generic strategies

 Position of Generics in Health Care
4

What is a Generic? – Simple Generic

 a drug product that is comparable to brand/reference listed drug product in
dosage form, strength, route of administration, quality and performance
characteristics, and intended use” *

 Brand/reference (usually innovator) listed drug product is a product
– which has full safety and efficacy information submitted to FDA, TGA etc
– Product (usually the innovator) registered and already marketed in country of interest.
 Studies to demonstrate comparability with innovator product include
– Laboratory studies
 Chemical content and purity
 Dissolution studies for oral products
 Microbiological safety
 Stability
– Clinical Bioequivalence
 Not needed for some products eg simple intravenous solutions

5 * "Generic Drugs", Center for Drug Evaluation and Research, U.S. Food and Drug Administration


 Compared with the innovator the generic drug has
– Same API (active pharmaceutical ingredient)
 Different salt forms, hydrates and crystal forms of API generally OK
– Same route of administration
 Eg oral, intravenous, subcutaneous not equivalent
– Same dosage form
 Oral -Tablet or capsule not interchangeable
 Pareneteral - solution and freeze dried not interchangeable
– Same strength eg 40mg tablet; 10mg/mL injection
– Same conditions of use eg administer with food etc
– Inactive ingredients approved for a similar drug

- Same drug blood profile as innovator ie is bioequivalent

6  Generic is interchangeable with innovator in clinical use

Regulatory Submission
Innovator Generic
Labelling Labelling
Pharm/Tox Pharm/Tox
Chemistry Chemistry
Manufacturing Manufacturing
Controls (QC tests, validation) Controls (QC tests, validation)
Microbiology Microbiology
Inspection (audit of facilities) Inspection (audit of facilities)

Testing Testing
Animal Studies
Clinical Studies Bioequivalence only
Phase 1, 2, & 3
7 Bioavailability studies

Generic Drugs – Simple Generic

National Regulatory Authority (eg FDA, TGA, MHRA etc) Brand Generic
monitors and evaluates drug product name
Bioequivalence to innovator (reference listed drug) X X
Adherence to cGMP by manufacturer X X
Active and inactive ingredients X X
Finished drug product (chemical equivalence to innovator) X X
Labelling of drug product (equivalence to innovator) X X
Major changes to product/process with prior approval needed X X
Adverse reactions/adverse health effects monitored/reported X X
Manufacturing plants with periodic inspections and audits X X
8 Monitor ongoing quality of drug (annual reports etc) X X

Generic Drugs – Comment on Quality
• Quality of generic drugs compared with innovator often controversial (in
public view)
• Scientific evidence does not support concerns

“The pharmaceutical quality and therapeutic equivalence of generic(s)..
well established by the medicines authorities during the authorisation
procedure, as demonstrated by extensive testing and documentation, and
often by years of practical experience in treatment...........................................
..........................................................................................................................
Indeed, the variation between different batches of an originator product
is often of the same magnitude or even greater than the statistically
calculated and controlled difference between a generic medicine and its
reference product *.”

European Generics Medicines Association Website http://www.egagenerics.com/gen-quality.htm
9 *Meth. Find Exp. Clin. Pharmacol. 1989; 11:647-655

Complex Generic Drugs
 Incomplete phyisco-chemcial comparability eg
– Different Dosage form
– Novel inactive ingredient
– Different strength eg 0.5mL dosage of 20mg/mL instead of 1mL of 10mg/mL
 Different administration route
 Different usage
 Improved bioavailability or site and duration of action
(“supergeneric”)
 Require more data than simple generics to support the safety and
efficacy of the drug
– Often animal studies and human clinical safety/efficacy
 Increased, separate regulatory requirements “paper New Drug
Application (NDA)”
10  May not be clinically interchangeable with innovator drug

Example of Simple Generic Drug
-Ondansetron

C18H19N3O
Mol. mass 293.4

Zofran® 4mg - GSK Generic ondansetron 4mg - Mylan
• Active pharmaceutical ingredient patent expired around 2004
• simple defined molecule
•11 generic competitors to innovator launched at market formation in 2004
11 • available across US, Europe and Australia Pharma & Biotech Innovation

Example of Biosimilar
-Erythropoietin (EPO)

•Glycoprotein, 165 aa, aprox. 30 kDa, single S-S bond
•Peptide component ca 60%, complex carbohydrate component ca 40%
•Complex glycan structures of individual molecules glycoisoforms
•Defined mixture of glycovariants having the same amino acid backbone
• patent expired around 2004
•Biosimilar forms of EPO available in EU
• 5 generics approvals in EU (by 3 separate companies), 2 in AU
•Based on complex chemical comparisons and PD (Pharmacodynamic) and
12 PK (pharmacokinetic) comparisons with innovator drugs

Biosimilars – US Europe
Comparison

Note 4: USA Draft Guidelines issued in 2011
13 USA Updated/Final guidelines to be issued mid-2012

Biosimilars – Comparison with
Simple Generic Drugs
• Biosimilars are comparable to, not substitutable for innovator
• Generics are equivalent to, and substitutable for innovator

•Biosimilars - more extensive chemical comparability evidence than generics

•Clinical studies
• Biosimilars include PD as well as PK and sometimes clinical effectiveness
(eg symptom reduction or perhaps overall survival)
• Generics only require PK
• Biosimilars much more expensive development pathway than generics

•Generics can be substituted by clinician or pharmacist for innovator
• Clinician needs evidence to substitute a Biosimilar for innovator

• Generics can be marketed to wholesalers (compete on price), Biosimilars
14 need marketing to clinicians (compete on price and effectiveness)

Biosimilars use in Europe [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2012 Feb 10]. Available from: www.gabionline.net/Reports/Biosimilars-use-in-Europe
Biosimilars approved in Europe [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2012 Feb 10]. Available from: www.gabionline.net/Biosimilars/General/Biosimilars-ap
EMA and FDA to collaborate on biosimilars [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2012 Feb 10]. Available from: www.gabionline.net/Biosimilars/News/EMA
US guidelines for biosimilars [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2012 Feb 10]. Available from: www.gabionline.net/Guidelines/US-guidelines-for-biosimi
EMA definitions of generics and biosimilars [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2012 Feb 10]. Available from: www.gabionline.net/Biosimilars/General/EM
Generic applications in the EU, patents and exclusivity [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2012 Feb 10]. Available from: www.gabionline.net/Reports/Ge
Care Act of 2010, Improving Access to Innovative Medical Therapies-Subtitle (Biologics Price Competition and Innovation Act of 2009, section 351(k), 351(l), 351(m). Pub.L.No.111-48. 2011. 3-2-2011.
directions. Expert Opin Biol Ther. 2010;10:1011-8.
of biosimilars: not only a cost issue. Oncologie. 2011;13(5):218-21.

Generics – Market Size

•The global generics market is estimated at about $225 billion in 2011.

•By 2016, total global generics sector estimated at $358 billion, (more than
18% of all pharmaceuticals)

•Projected compound annual growth rate (CAGR) of 9.7% between 2011 and
2016. Additional growth from emerging biosimilars market.

• Emerging market (BRICs etc) represents the 2nd largest market for generic
drugs $57 billion in 2011 growing to ca $115 billion in 2016 (CAGR of 15.1%)

15 Pharma & Biotech Innovation


Generics – Market Opportunity
• Innovators expected to lose ca $100bn in sales 2011-2015 due to the “patent cliff”
(expiring blockbuster drugs)
•presents a significant opportunity for generics players

• With increasing drug costs, governments increase generic use to contain costs
•But generics companies also have increased pricing pressure.

•Many leading generics companies are expanding globally
•Often with vertical integration strategies
• entering more complex generics areas & biosimilars

•Innovator companies are entering the generics area (eg Novartis via Sandoz)
•Also often with an authorised generic strategy

• Strong focus on emerging markets which are characterized by high generics uptake
and future growth potential.



Generics – Product lifecycle
•When market opens to generics (usually at patent expiry), most drugs
• are subject to intense competition with upwards of 10 companies
entering the market (particularly blockbuster drugs ie >$1b sales)

• Price falls dramatically immediately & in the first year (in US ca by 90%)

• Innovators usually stop promoting innovator product
•switch market to newer drugs

• As a consequence total value and volume of sales of drug (innovator plus
generics) drop substantially

•A 4-5 year profitable lifecycle (with a long tail) is expected for generics
(complex generics and biosimilars expected to be much longer)


Generics – Cost Advantages
• Generics avoid the expensive clinical trials
•average cost of discovering and testing a new innovative drug
using a new chemical entity) as much as $800m (most costs in
clinical phase)
•generic total development cost $1-5 million, including <$1m on
PK

•Generics avoid large marketing costs
• Generics equivalent to & substitutable for innovator
• market to wholesalers not clinicians
•Biosimilars require larger marketing costs
18 • Biosimilars comparable to but not substitutable for innovator
•


Generics – Cost Pressures and

Globalisation
•Short lifecycle and cost sensitivity focus generic companies on
•Time to market
• Profit Margins (minimising cost of goods sold)
• Minimising development $
• Trend towards vertically integrated generic companies with
• API manufacturing facilities (often through company acquisition)
• Drug product and packaging facilities
• Global Marketing abilities
• Location of facilities in cost competitive countries eg India and
China
• Generic Companies frequently developing drugs
•Very quickly (12-14 months to submission)
• Well before patent expiry
19 • Patent circumvention and challenges more common

US guidelines for biosimilars [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2012 Feb 10]. Available from: www.gabionline.net/Guidelines/US-guidelines-for-biosimil

Generics – Intellectual Property
Intellectual Property (IP) of innovator is in four forms
• Published patents
• API as a chemical entity (“substance patents”)
• Salts, hydrates, enantiomers and other forms of the API
• Process for synthesis of the API
• Formulation of the drug product
• Process for preparation of the drug product
• Clinical use of the drug product
• Trade Secrets
• Not often used as most products can be reverse-engineered
• Data disclosure required (eg FDA SBA; EU EPAR; and AU
AUSPAR)
•Data Exclusivity
•Data collected for drug development including regulatory submissions
• regulatory authorities refuse access to data to generics for a period
20 of time post submission by innovator (often 3-5 years)

Generics – IP Strategies

1. Wait for expiry of all relevant patents and data exclusivities

2.At expiry of data exclusivity challenge validity of unexpired innovator
patents and lodge application for approval of generic

3.At expiry of data exclusivity lodge an application for a drug product which
does not infringe unexpired innovator patents

4.Potential for non-infringing drug products to create IP for generic
company

5.In US first generic to file for a product ahead of patent expiry gets 6
months exclusivity

Innovator IP Strategies
1.Evergreening – in addition to patent on API
• Patents for salts, hydrates and enantiomers
• Need to be clinically significantly different to be effective
• Patents for other dosage forms and formulations
• eg controlled release dosage forms
• Introduce new product just prior to expiry of standard product
• Patents for process of manufacture of API
• Patents for clinical use
• GSK held patents for all these areas for Ondansetron
2.Authorised Generic
• Innovator allows market access to generic company under license
• May even sell innovator product in different packaging
3.Marketed Generic
• Innovator markets its own generic product
• May continue to market own innovator branded product also
22

Position of Generics in Health Care

•Innovator Companies charge higher prices for drugs during period of
patent and data exclusivity
• Recoups cost of development and clinical trials
• Ensures ongoing profitability and further investment in new drugs

•After patent and exclusivity expiry competition leads to the fall in the
cost of drugs to close to the cost of manufacture plus margin

23

Position of Generics in Health Care

•Generics make Affordable Medicines available to public

• Generic drugs save EU over €25 b and US $150b each year

• Close to 50% of all medicines in Europe are generics

• Competition from generic medicines provides incentive to
originator companies to develop innovative products.

• Savings from using generics help governments and patients to
pay for the costly new innovative drugs and treatments.

24

Generic Drugs
3rd Year lecture in the “Biotechnology in
Practice” course, University of Melbourne
May 2012

Michael McNamara
MSc MRACI C Chem
ph 03 94997193 mobile 0407713768
25 michael.mcnamara@live.com.au PBI

Generic Drugs Michael Mc Namara May 12

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