Mylan-Biocon: trastuzumab biosimilar
On Monday it was announced that Biocon had received approval from the Drug Controller of India for the first biosimilar to Roche’s widely used HER2 breast cancer drug, Herceptin. Biocon and partner Mylan’s trastuzumab product, one of five biologics in development between the Indian company and the American giant, will be sold under the name of Hetraz.
Mylan and Biocon hold the exclusive comersialisation rights for the US, Canada, Japan, Australia, and the EU. Coupled with global sales of $6.4 billion and a price of around $19,200 for a course of 12 shots, the Biocon-Mylan duo look set to undercut the global Herceptin market.
“This regulatory achievement marks another Mylan first and underscores our commitment to, and confidence in, our biologic development program with Biocon and our belief that these products will become a global growth driver for Mylan over the long-term” Heather Bresch, Mylan CEO
The importance of this approval can only be seen against the backdrop of scandal and controversy the Indian pharmaceutical industry has been played out against over the last few years. But even against the increased regulatory pressure on Indian Pharma, both globally and internally, is this approval enough to suggest Indian Pharma can emerge from its PR disaster?
Indian Pharma Industry: a PR nightmare
Perhaps not, as on the 26th of November the FDA published an import alert which identified scores of Indian pharmaceuticals it deemed not fit for purpose. Most notably was the ban on all substances manufactured in Wockhardt’s Chikalthana manufacturing plan. This comes just six months after the Medicine and Healthcare Products Regulatory Agency of the UK withdrew certification to the Wockhardt’s plant, resulting in an EU wide ban of their substances, due to concerns over manufacturing standards.
And Wockhardt is not alone. Earlier this year, Ranbaxy Laboratories had to pay $500 million to the US Department of Justice in settlement of criminal and civil charges pertaining to the sale of substandard drugs to the US, and infractions committed by Paonta Sahib and Dewas plants during FDA inspections. Ranbaxy were found to have systematically covered up, manipulated and fabricated data; used chemicals from unapproved sources; knowingly making false statements to the FDA; and adulterating drugs. This high profile case was covered by news outlets across the world and hit the image of the industry hard.
The Uncertain Road Ahead
But can this trend be sustained? In a recent report by Price Waterhouse Cooper (PwC) it is questioned whether or not the Indian pharmaceuticals market will be able to survive the global sales slump whilst also tackling the compliance and quality control issues that have black flagged the industry.
With increasing regulatory pressure on Indian exports in addition to the Indian National Pharma Pricing Policy 2012, profit margins have dropped from 20% to 16% for retailers, and 10% to 8% for stockists. With reduced profit margins, the threat of closure of Indian stockists will put pressure onto suppliers to reduce their profit margins. But with companies such as Wockhardt announcing a 14% drop in net profit in 3Q 2013, can they afford to reduce margins further?
So can the Indian Pharma market ride out the global recession, whilst still finding enough cash to upgrade its infrastructure and update its quality control legislation? Or will bigpharma take their money elsewhere?