Monoclonal antibodies could become victims of their own success. This was one of the conclusions from the 5th Annual Monoclonal Antibodies Conference held this week in London. The first monoclonal antibody (mAb) was launched in 1994, and they now account for 10% of the annual US healthcare budget. This achievement in such a relatively short time has been driven by their high selectivity for disease targets, which makes them very efficacious, and their relatively good safety profile.
But in a climate where governments are aiming to slash their healthcare budgets, and the new US administration making the most noise, the industry could see pricing pressure for this very expensive drug category. MAbs are also gearing up to face generic competition as the US also looks at a pathway for biosimilar drugs.
Speaking at the conference, Simon Russell, head of strategic marketing at Novartis' biologics unit, warned that as companies move from the low hanging fruit of cancer and rheumatoid arthritis into the trickier and much larger indications of Alzheimer’s disease and pain, the cost of the drugs, which often cost tens to hundreds of thousands of dollars a year, could frighten already cost-conscious payers.
At the moment Medicare is the largest payer in the US for mAbs. However, according to Janice Reichert, senior research fellow at Tufts Centre for the Study of Drug Development, 85% of approved mAbs have restrictions in the part D payment system, meaning that many are on a co-pay basis.
If more products are approved their inherent costs, compared with much cheaper small molecule drugs, will be at odds with the government’s stated aim of driving down spending.
Tim van Hauwermeiren, chief executive officer of Argen-x, however, argued that lack of innovation in the industry could also play its part in depressing prices. “We are seeing more and more me-too products come onto the market particularly in oncology, they will not be able to command the prices that the first approved mAbs achieved,” he said.
Rather than lack of innovation, the panel agreed that the one issue that will have the biggest affect on pricing is the advent of biosimilars in the US. Two regulatory pathways are currently being considered in the US, one that gives originators 14 years protection and one that gives them five. Yesterday, the panellists argued that there might be a compromise and that a seven year exclusivity period was more likely.
One of the reasons why there is growing interest in biosimilars, as seen by the recent acquisitions of biosimilar assets by both Merck & Co and Teva, is the size of the biologics market, which last year recorded sales of $108bn.
At present some believe that the price differential between proprietary drugs and biosimilars would be about 25%-30%, but Mr Russell of Novartis argued that the industry was being too optimistic and the cuts could be a deep as 50%. However, he added that generic companies could see a lot of push back in rapid adoption of the new drugs from physicians worried about the lack of complete substitution with biosimilars.
With the current threat of biosimilars, Julian Burke, chief scientific officer at Genetix, argued that companies would have to speed up their routes to market to ensure that products had as much patent life as possible.
The rise of biomarkers
On a slightly more positive note, Alasdair Stamps, head of target discover at Oxford BioTherapeutics, argued that one of the areas that could benefit mAbs was the advances in diagnostics and the subsequent selection of patients to fit new and exciting mAb therapies.
There are already moves within the industry to tailor specific treatments to certain patient groups (Biomarker moves into the spotlight as FDA goes wild for KRAS, December 19, 2008). While this could have the effect of reducing the use of some drugs, Mr Stamps argued, the pay off could be the maintenance of pricing levels, especially as regulators are also waking up to the potential of biomarkers to save money. In Europe, Erbitux’s use as a first line therapy is only in patients who test positive for the KRAS-wild type gene.
But despite the challenges that face the industry the panel agreed that the area was still an attractive one, as seen with the continuing success of drugs such as Avastin and the growing understanding of how mAb therapies work, that could see the use of multiple biologics in patients. They also said that more innovative payment structures, as seen by Johnson & Johnson agreeing to refund payment for Velcade according to its efficacy, could overcome some of the fears over the cost of the drugs.