Impact of Generic and Biosimilars Drugs in Asia-Pacific Regulated Market

EXECUTIVE SUMMARY

The ASEAN Pacific region has witnessed a seismic shift in its pharmaceutical industry over the past five years, primarily driven by the surge of generic and biosimilar drugs. This report delves into the multifaceted impact of these more affordable alternatives on the region’s healthcare ecosystem, focusing on four critical market segments: chronic diseases, rare diseases, oncology, and infectious diseases.

Introduction: The Game-Changers in Pharma
Imagine a world where life-saving medications are accessible to all, regardless of economic status. Thanks to generic and biosimilar drugs, it isn’t just a dream – it’s becoming a reality in the ASEAN Pacific region.

Generic drugs are copies of brand-name drugs with the same dosage, intended use, effects, side effects, route of administration, risks, safety, and strength as the original drug. Biosimilars, on the other hand, are biological products that are highly similar to and have no clinically meaningful differences from existing FDA-approved reference products.

Both these categories have emerged as powerful disruptors in the pharmaceutical industry, promising to democratize access to essential medications.

The ASEAN Pacific Pharma Market: A Landscape in Flux

With its diverse economies and rapidly growing population, the region presents a unique and dynamic pharmaceutical market. Over the past five years, this market has undergone significant transformation, driven by factors such as:

• Aging populations and increasing chronic disease burden
• Rising healthcare expenditure
• Government initiatives to improve healthcare access
• Growing middle class with increased purchasing power

These factors have created a fertile ground for the proliferation of generic and biosimilar drugs.

Impact Analysis: A Sector-by-Sector Deep Dive

1. Chronic Diseases: A New Lease on Life

The impact of generics and biosimilars on chronic disease management has been revolutionary. Take, for instance, the case of diabetes management in Thailand.

Case Study: Thailand’s Diabetes Care Revolution
In 2018, Thailand introduced a generic version of the popular diabetes drug Metformin. Within two years, the price of diabetes treatment dropped by 60%, leading to a 40% increase in patient adherence to treatment regimens.
This trend is mirrored across the region, with generic drugs for hypertension, cholesterol management, and other chronic conditions becoming increasingly available and affordable.

2. Rare Diseases: Hope on the Horizon
The impact on rare disease treatment has been more nuanced. While generics have made some headway, biosimilars have been the real game-changers.

3. Orphan Drug Policies: Several ASEAN countries have introduced orphan drug policies to incentivize the development of treatments for rare diseases.

4. Biosimilar Breakthroughs: Introducing biosimilars for rare diseases like hemophilia has led to price reductions of up to 30% in countries like Malaysia and Singapore.

5. Oncology: Breaking Down Barriers
Cancer treatment has seen one of the most significant impacts from the rise of generics and biosimilars.

6. Cost Reduction: In the Philippines, the introduction of generic versions of common chemotherapy drugs has reduced treatment costs by 50-70%.

Market Growth and Economic Impact
The biosimilars market alone shows remarkable growth, with global projections reaching $61.47 billion by 2025. In the APAC region, the impact has been particularly pronounced due to several key factors:

Healthcare Cost Management: The introduction of generics and biosimilars has become a crucial strategy for managing healthcare costs across APAC nations. Countries like India, Vietnam, and China have demonstrated earlier market access and higher uptake of biosimilars compared to other regions, driven by the need to make essential medications more accessible to their large populations.

REGULATORY FRAMEWORK AND HARMONIZATION

The regulatory landscape for generics and biosimilars in Asia-Pacific is complex and varied. The Association of Southeast Asian Nations (ASEAN) has made significant strides in harmonizing pharmaceutical regulations through the ASEAN Pharmaceutical Regulatory Policy and Framework, adopted in 2022 and 2023. This harmonization effort aims to streamline the approval process while maintaining high safety and quality standards.

The regulatory landscape in APAC is evolving to accommodate the growing presence of generic and biosimilar drugs. Recent developments include efforts to harmonize regulations across ASEAN nations, particularly for complex products like biosimilars and gene therapies. This harmonization is crucial for:

• Streamlining approval processes
• Ensuring consistent quality standards
• Facilitating market access across multiple jurisdictions

The Asia-Pacific region has significant markets for biosimilars, notably in China, India, Japan, and South Korea. Japan established its regulatory pathway in 2009, aligning with EMA and FDA standards, while South Korea followed suit. China created its guidelines in 2015, approving its first biosimilar in 2019, with efforts to match international regulations.

India’s evolving regulations, issued in 2012 and revised in 2016, lack legal standing, leading to challenges from international firms concerning reference products. Additionally, Taiwan and Malaysia have recently established biosimilar approval guidelines. The ongoing harmonization of regulations among ASEAN nations aims to simplify approval processes, ensure quality standards, and enhance market access.

MARKET ACCESS CHALLENGES
Despite the positive trajectory, several challenges persist in the APAC market:

Regulatory Complexity: Different countries maintain varying requirements for generic and biosimilar approvals, creating a complex landscape for manufacturers.

Healthcare Provider Adoption: Concerns about immunogenicity and clinical equivalence affect healthcare provider confidence, particularly in more developed APAC markets.

Price Pressures: Government pricing reforms across APAC countries have created a complex environment where manufacturers must balance affordability with sustainable business practices.

Quality Assurance: Maintaining consistent quality standards across different markets remains a priority, particularly in developing economies.

Market Competition: The increasing number of market players (https://www.sciencedirect.com/science/article/pii/S2212109918303182) has intensified competition, necessitating strategic approaches to market entry and sustainability.

FUTURE OUTLOOK
The future of generic and biosimilar drugs in the APAC-regulated market appears promising, driven by the following:

Growing Healthcare Needs: An aging population and increasing chronic disease burden are creating sustained demand for more affordable treatment options.

Policy Support: Many APAC governments are actively implementing policies to promote generic and biosimilar adoption, including preferential pricing and reimbursement strategies.

Market Maturation: The market is showing maturation with improved regulatory frameworks and growing acceptance among healthcare providers and patients.

MARKET GROWTH AND ECONOMIC IMPACT
The biosimilars market alone shows remarkable growth, with global projections reaching $61.47 billion by 2025. In the APAC region, the impact has been particularly pronounced due to several key factors:

Healthcare Cost Management: The introduction of generics and biosimilars has become a crucial strategy for managing healthcare costs across APAC nations. Countries like India, Vietnam, and China have demonstrated earlier market access and higher uptake of biosimilars compared to other regions, driven by the need to make essential medications more accessible to their large populations.

Regulatory Framework and Harmonization: The regulatory landscape in APAC is evolving to accommodate the growing presence of generic and biosimilar drugs. Recent developments include efforts to harmonize regulations across ASEAN nations, particularly for complex products like biosimilars and gene therapies. This harmonization is crucial for:

• Streamlining approval processes
• Ensuring consistent quality standards
• Facilitating market access across multiple jurisdictions

FUTURE DEMAND FOR GENERIC AND BIOSIMILARS IN ASIA-PACIFIC COUNTRIES
The future of generic and biosimilar drugs in the APAC-regulated market appears promising, driven by the following:

Impact on Healthcare Systems: The rise of generics and biosimilars has significantly impacted healthcare systems across the region. Research demonstrates that these alternatives have helped address fiscal sustainability challenges while maintaining healthcare quality. Seven of the top 15 generic drug companies globally now operate in the APAC region, highlighting its strategic importance in the pharmaceutical industry.

An aging population and increasing chronic disease burden are creating sustained demand for more affordable treatment options.

Policy Support: Many APAC governments are actively implementing policies to promote generic and biosimilar adoption, including preferential pricing and reimbursement strategies.

Market Maturation: The market is showing maturation with improved regulatory frameworks and growing acceptance among healthcare providers and patients.

The Asia-Pacific (APAC) region is experiencing significant growth in biosimilars, with many companies establishing manufacturing facilities to provide affordable patient options. South Korea is recognized as a leading hub for biosimilars, outpacing Europe, and currently, 30% of the biosimilars market is attributed to developing countries, particularly in APAC, which is growing at a rate of 30%. South Korea’s government plays a crucial role by offering financial support, tax incentives, and regulatory assistance. A notable investment of approximately US$2.6 billion was announced in 2019 for biotech R&D. Furthermore, the country has implemented a National Health Insurance (NHI) program for universal coverage and launched the ‘Columbus’ consulting program to facilitate biosimilar approvals.

Japan also sees a robust biosimilars market, with the first approved biosimilar achieving a 45% volume share within two years. The Japan Biosimilar Association (JBSA) was established to tackle challenges in biosimilar adoption, while the government’s Honebuto policy aims to enhance NHI systems and encourage greater use of biologicals, thus expanding the biosimilars market further.

The Chinese government has implemented several initiatives to promote the development and adoption of biosimilars, including the establishment of multinational clinical centres and the sharing of clinical data globally. Measures to accelerate the approval process for special medicines and enhance clinical data protection have also been introduced. Notably, the Marketing Authorisation Holder plan allows drug license holders to collaborate with contract manufacturers for sales in China.

Similarly, the Indian government supports biological drug development through the ‘Make in India’ initiative. The Department of Biotechnology, in partnership with the World Bank, launched the National Bio-Pharma Mission, which has a budget of US$250 million and is administered by the Biotechnology Industry Research Assistance Council. India’s biotechnology landscape includes over 2,700 start-ups, 600 companies, and 100 incubators, underscoring its commitment to advancing biopharmaceutical research and development.

Several Asian nations, including Singapore, Malaysia, Thailand, Indonesia, and Taiwan, have developed regulatory pathways for biosimilars, leading to a greater availability of these treatments in their markets and enhancing patient access. The trend toward universal health care is also gaining momentum in ‘pharmerging’ countries like Thailand and Indonesia, facilitated by subsidies and reimbursement programs. The biosimilars market in the Asia Pacific was valued at approximately US$1.26 million in 2019, with projections indicating a compound annual growth rate (CAGR) of 31.6%, potentially reaching US$4.99 million by 2024. Establishing a robust foundation for the biosimilar industry in the region highlights the essential role of government support in ensuring its success.

Drug shortages are increasingly problematic globally, with Japan facing particular difficulties due to a shift from brand-name to generic medications and manufacturing scandals. These issues compromise access to vital treatments, prompting calls for intervention from pharmaceutical companies and the government.

Japan’s healthcare cost management has contributed to these challenges, as drug prices have been consistently lowered over the past two decades to control expenses under the universal health insurance system. This focus on cost reduction has led some pharmaceutical companies to cut corners, resulting in quality scandals.
A notable case involved Sawai Group Holdings, where deficiencies in good manufacturing practices (GMP) were identified, specifically with teprenone capsules. This lapse caused significant disruptions due to drug recalls, worsening the existing shortages.

To ameliorate the situation, researchers Kinoshita and Kishimoto propose introducing exceptional price reviews for unprofitable drugs soon. Nevertheless, a report from 2024 indicates that a substantial portion of certain pharmaceuticals may become unprofitable, highlighting the challenges ahead.

Japan’s low drug prices and high clinical trial costs discourage foreign pharmaceutical companies from entering the market, leading to a scarcity of new medications. Kinoshita and Kishimoto recommend alternatives for lowering healthcare expenses, including adjusting patient co-payments and making some drugs available over-the-counter. It’s essential to reevaluate drug pricing policies to safeguard access to vital medical care.

CONCLUSION

Biosimilars have the potential to reduce treatment costs and increase patient access to advanced medicines, but a lack of standardized international regulatory pathways hinders their global marketing efforts. This leads to significant time and costs in biosimilar development, particularly in emerging markets where requirements for clinical study design and critical criteria are complex. Additionally, differences in philosophies regarding the extrapolation of approvals for different indications and the interchangeability/switching/substitution of biosimilars further complicate compliance.

Global harmonization of biosimilar regulatory frameworks would benefit both manufacturers and patients by allowing the sharing of data between regulatory bodies in different countries, reducing the need for duplicate testing and document preparation. This would also allow biosimilar products to be introduced more quickly into other markets, resulting in lower costs for launching biosimilars into multiple markets.

Achieving global harmonization of biosimilar regulations requires extensive communication and collaboration between regulatory authorities, agreement on scientific requirements for demonstrating similarity, and alignment on approaches to extrapolation and interchangeability. Act4 Biosimilars, an international organization, aims to help countries lacking strong regulatory pathways develop and implement biosimilars, focusing on Latin America and Africa.

The impact of generic drugs and biosimilars in the Asia-Pacific regulated market has been transformative, offering increased access to essential medications while fostering economic growth in the pharmaceutical sector. As regulatory frameworks continue to evolve and manufacturing capabilities advance, the region is poised to play an even more significant role in the global pharmaceutical landscape. The success of these initiatives will depend on continued regulatory harmonization, maintenance of quality standards, and strategic market access approaches.

This article provides a comprehensive overview of the impact of generic drugs and biosimilars in the Asia-Pacific market, incorporating current research and market analyses. The content is structured to address key aspects including market growth, regulatory frameworks, challenges, and future outlook, while maintaining academic rigor through proper citations of peer-reviewed sources.

Author: Anjali Malan

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