Fifteen years after it rose and went limp, the biotech sector saw a bull run of sorts
In 2010, an unusual protest erupted over a still negotiated and secret free trade agreement between India and the European Union. Protesters were people living with HIV/AIDS and cancer. They saw a threat to manufacture of generic medicines in the country that have made their treatment affordable.
Generic medicines are the cheaper equivalent of innovator products, usually manufactured after the expiry of the patent on the branded drug. India is the pharmacy of the world because generics made here are used globally. Since then, the world has woken up to the rise of generic drugs that emerge as a counter to the patent and profit driven multinational corporations.
Bullish on biosimilars
The biotech economy boom is definitely not a “gold-rush” kind of phenomenon where desperate investors chase a success story. Since the crash in 2000, many developments have happened in drug science and policy that are fuelling the biotechnology industry’s growth. It is not just a demand supply phenomenon. There is an overarching change in drug policy in various countries and a push for freeing drugs from the patent regime. This is leading to a major realignment in the biotech industry in terms of investment.
The next big push for the industry comes from the unprecedented increase in the market for generic drugs, particularly in the US that controls the global market. Similarly, middle-income countries like India and Brazil are reporting increased demand and local manufacturing capabilities. US President Barack Obama’s healthcare reform is centred on low-priced drugs that can be made possible by generics. The US is already pressuring drug firms to lower prices to reduce cost of government programmes and to lower insurance rates, which will benefit people. Though at present, generics account for 70 per cent of America’s total prescription sales, market analysts estimate that it would grow further.
But what is fuelling the surge in generic drugs growth? The definition of generics covers a group of medicines called biosimilars. These are termed as the “generic equivalent” of branded biological products or biologics that are created through biological processes instead of chemical synthesis.
The world is witnessing an unheard of boom in these medicines. Research and market analysis group Datamonitor estimates the global biosimilar market will grow from $243 million in 2011 to $3.7 billion this year. That is a 1,422 per cent growth in just four years. Sandoz, the global leader in biosimilars, has estimated that the market could reach up to $30 billion by 2020.
These medicines are popular for treating various cancers, rheumatoid arthritis and adverse cardiovascular conditions. Patented and brand biologics are expensive and turn out to be prohibitive in case of diseases like cancer and hepatitis. The biosimilars are relatively dirt-cheap and are now being supported by governments of developed countries precisely for this reason.
Also in the decade
The biggest barrier to access to medicines is that less than 10 per cent of the medicines are absorbed by the public health system and close to 80 per cent of the out-of-pocket expenses incurred by the poor, are on medicines.
Generic drug companies routinely make drugs of differing quality. They often make their worst drugs—with the lowest-quality ingredients and the most manufacturing shortcuts— for the least regulated markets, including India.
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