Biologic drugs are complex molecules derived from living systems1 and constitute a growing and costly segment of the pharmaceutical market2,3. Globally, expenditures on biologics totaled $277 billion in 2017 and are forecast to rise to $452 billion by 20224. This spending has been driven primarily by high biologic drug prices, which often exceed $100,000 per patient per year in the United States5,6.

Recent creation of abbreviated approval pathways in the European Union and United States for biosimilars — products that are similar to an originator biologic with regard to quality, safety and efficacy — was intended to help lower spending on biologics drugs by fostering competition following the originator biologic’s loss of market exclusivity7. However, the success of biosimilars in meeting this aim has been mixed. As of 1 May 2020, the US Food and Drug Administration (FDA) had approved 26 biosimilars for 9 originator biologics8, of which 14 have launched9. By contrast, the European Medicines Agency (EMA) had approved 64 biosimilars for 16 originator biologics10, with price reductions per treatment day varying widely across therapeutic class, from 3% for oncology treatments to 30% for epoetins11. Thus, expected widespread price reductions from biosimilar entry have not yet materialized in either the United States or European Union12.

Scientific, legal and regulatory challenges related to biosimilar manufacturing and development may explain why biosimilar drugs have not lived up to their promise to substantially reduce consumer prices13,14. Biologic manufacturing is complex, requiring specialized expertise and a highly controlled environment15. Biosimilar manufacturers may lack information about originator biologic manufacturing processes, which are often treated as trade secrets16. Many biologics also are protected by multiple patents — time-limited, exclusive rights to use inventions — not only on compositions of matter, but also on manufacturing processes, which biosimilar manufacturers must navigate or challenge17. Finally, meeting EMA and FDA approval standards can require 250 or more analytic tests for biosimilars, as compared to about 50 for small-molecule generic drugs15.

To understand the role that such challenges play in biosimilar manufacturing, we conducted qualitative interviews18 with national medicines regulators and pharmaceutical manufacturer employees with experience in biologics (Box 1).

Results

In total we conducted 23 interviews with 25 participants (2 interviews were held with each of 2 participants, at their request). Eight participants were EU national medicines regulators and 17 worked for pharmaceutical manufacturers. Of the latter cohort, five worked for manufacturers that marketed only originator biologics, eight for companies that marketed only biosimilars, and four for companies that marketed both originator biologics and biosimilars. Ten pharmaceutical manufacturer participants had expertise in regulatory affairs, four in law, and three in chemistry, manufacturing, and control (CMC) processes (Table 1). The median interview time was just over one hour. Selected perspectives from the interviews, grouped by theme, are shown in Table 2.

Table 1 Qualitative interview participant affiliations and expertise
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Table 2 Selected insights from participants on biosimilar manufacturing challenges
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Legal barriers: patents and trade secrets

Participants generally perceived trade secrets as a surmountable barrier to biosimilar manufacturing. Participants from biosimilar manufacturers noted that while reverse engineering originator biologics was challenging, the information and expertise necessary to do so were available independent of originator manufacturers. This belief centered on the perception that manufacturing techniques, such as producing the target protein and purifying the product, had become more or less standardized. In addition to using in the development of biosimilars publicly available information from the scientific literature, medicines authority assessment reports, and conference presentations, biosimilar manufacturer participants stated that they benefited from the migration of technical skills when employees switched jobs.

Although disclosure of trade secrets could reveal CMC processes, several regulators and biosimilar manufacturer participants commented that this information was not likely to ease biosimilar development. They stated that such parameters were often exclusively applicable to originator manufacturing facilities because different manufacturers would use different variants of cell lines and nutrients for cell growth to produce the same target protein.

Several participants reported that trade secrets covering the original product helped to spur innovation and increase scientific knowledge. Lacking information on the development of the originator biologic, biosimilar companies are often forced to develop their own processes, resulting in improved understanding of the biologic active substance’s characteristics and function. A regulator explained that extensive physicochemical characterization of biosimilars has led to several discoveries of important molecular aspects of active substances, which have resulted in requests to originator companies to change their specifications. For example, another regulator described that for a monoclonal antibody the level of non-fucosylated glycoforms must remain stable because variations can affect the potency of the molecule.

In contrast to trade secrets, participants expressed greater concern over the barriers posed by patents on originator biologics. Originator biologics are protected by more patents than originator small-molecule drugs, including patents that one participant mentioned can block relatively basic scientific processes used for multiple purposes. Biosimilar manufacturer participants reported difficulty ascertaining these patents owing to the lack of an efficient search mechanism. Under US law, manufacturers of small-molecule drugs must report select patents to the FDA, which are indexed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book. These patents can be used to identify corresponding European patents. However, originator biologic manufacturers are not required to report similar patents to the FDA. Participants noted that the difficulty in mapping the patent landscape for originator biologics led to considerable uncertainty and risk for biosimilar companies. Finally, the participants mentioned that it was challenging but possible to work around identified patents protecting the originator product.

Regulatory barriers: clarity and uniformity

A key biosimilar development challenge that participants raised was regulatory clarity. Biosimilar manufacturer participants stated that while they knew what biosimilar approval requirements were, they were not always certain how to fulfill them to regulators’ satisfaction. Regulators highlighted the merits of such ambiguity, commenting that it helped to avoid reliance on outdated methods and their need for guideline flexibility. To address uncertainty, biosimilar manufacturer participants reported seeking advice from regulators at multiple stages of development. Regulators described biosimilar manufacturers sometimes developing biosimilars in parallel rather than stepwise — for example, conducting biofunctional and clinical investigations before completing physicochemical analyses. Regulators said that manufacturers risk delay and cost overrides if outreach is performed too late in development.

Of special concern was whether clinical trials would be necessary for a particular biosimilar product in development. Two biosimilar manufacturer participants commented that despite demonstrating very close similarity of their biosimilars to reference products, clinical trials were still required to gain approval in the European Union. These experiences fueled the perception that negotiation with the EMA over whether to conduct clinical trials was not possible notwithstanding EMA guidelines permitting trials to be waived.

Biosimilar manufacturer participants also expressed a desire for greater uniformity of requirements between the EMA and the FDA. Although participants perceived many similarities in approaches by the agencies, key differences existed. For example, a regulator specified that the FDA focused on fixed statistics like prespecified acceptable standard deviation between biosimilar and originator products. By contrast, this interviewee explained that the EMA applied statistics on a case-by-case basis. Another biosimilar manufacturer participant echoed this point, noting that companies needed to perform different analyses for each jurisdiction. In general, the manufacturer participants considered the FDA more stringent than the EMA, which a biosimilar manufacturer participant ascribed to the FDA being more cautious toward biosimilars in general.

Discussion

In this study aimed at understanding key scientific, legal and regulatory challenges in biosimilar development and their effect on biosimilar market entry, we found that biosimilar manufacturers and EU national medicines regulators perceived trade secrets as being a surmountable barrier. By contrast, patents protecting originator biologics were considered a greater obstacle given their large number and difficulty in identification. We further observed tension between regulators’ need for flexibility in applying guidelines to different cases and manufacturers’ preference for certainty concerning biosimilar testing requirements.

Our findings suggest that policies to promote greater disclosure of manufacturing practices may not yield large dividends, even though some scholars — including one of the authors — have raised concerns that trade secrets could pose major barriers to biosimilar development and manufacturing16,19. The protection offered by trade secrets may also have diminished over time as scientific knowledge has grown and regulators have adopted far-reaching transparency and disclosure policies for clinical-trials data transparency, which have been supported by European court decisions20,21. Furthermore, as participants noted, it is uncertain how helpful CMC process disclosure would be, given the different development approaches taken by each manufacturer. However, trade secrets can still pose barriers to manufacturers without established biotechnology experience, as well as for products that are not recombinant proteins.

The main intellectual property concern for biosimilars among the participants was the large numbers of patents — sometimes called thickets — that originator biologic manufacturers obtain relating to their products. Some of these patents can be missed in even a comprehensive search, presenting a major challenge in identifying the processes that must be circumvented to stay clear of litigation. The Biologic Patent Transparency bill — proposed in the US Congress in 2019 — would help address this problem by establishing a mandatory, searchable list for patents protecting biologics, which would be included in the FDA’s Purple Book, an analog of the Orange Book22. As corresponding European patents could be identified from listed US patents, enactment of the bill would be beneficial for both jurisdictions. In addition to this legislative reform, user-generated solutions for specific technologies, such as the use of patent pools and clearinghouses in synthetic biology and gene editing23, may prove helpful and warrant further exploration.

Concerning regulatory clarity, the EMA attempted to address existing shortcomings by establishing a pilot project in 2017 that offers biosimilar applicants greater guidance on how to proceed with a viable development plan, including how to design a clinical comparability study to meet regulatory requirements24. However, this initiative assumes a stepwise approach to biosimilar development, whereas in practice development is often pursued in parallel. The pilot project also does not resolve the need for companies to seek advice on multiple scientific fronts to keep their biosimilar development aligned with regulatory requirements. A possible solution could be to reduce the financial burden of seeking scientific advice. This would help less experienced biotechnology manufacturers, incentivizing more biosimilar entrants. Another step forward would be for the FDA and EMA to jointly develop biosimilar development guidance. Although both regulators rely on common scientific principles, hold joint meetings and participate in the International Council for Harmonisation25,26, substantive differences remain, which could be minimized through greater collaboration. Aligning statistical approaches to biosimilar assessment, a goal referenced in both the EMA’s Regulatory Science Strategy to 2025 and the FDA Biosimilar Action Plan27,28, could be one area of focus.

Our study provides insight into key perceptions of biosimilar development and manufacturing challenges. The diversity of participants, which included regulators and industry participants from manufacturers of originator biologics, biosimilars only, or both originator biologics and biosimilars, was an important strength of the investigation. However, four primary limitations should be noted. First, the extent to which our findings are transferable29 to other markets, specific sectors and situations, such as vaccine development and manufacturing in health emergencies, or to more complex biologic drugs such as gene therapies, is uncertain. Second, further study in this area should also include the perceptions of US medicines regulators, who were not able to participate in this study. Third, the study did not explore the impact of regulatory exclusivities, which warrants further investigation. Fourth, this study did not focus on the normative question of whether potential barriers posed by trade secrets might be justified from a business perspective.

Conclusions

Primary challenges with biosimilar development and manufacturing include legal and regulatory issues, particularly numerous patents protecting originator biologics and the difficulty in identifying them, leaving biosimilar developers with unnecessary business uncertainties. Policymakers must take measures to resolve this problem to avoid discouraging would-be entrants from developing biosimilars. Regulators should also facilitate more efficient biosimilar developments and develop joint biosimilar guidelines. These measures could create a more vibrant competitive biologics market to provide higher healthcare cost savings, to the benefit of patients.