The markets in Europe and the US alone have the potential to generate sales of $16.39 billion by 2011, according to the company.
Patents for the earliest biopharmaceuticals to reach the market are beginning to expire, and biogeneric versions of products such as generic erythropoietin, recombinant human growth hormone and recombinant human interferon are anticipated to be the first product launches following abbreviated routes to market, representing a multi-billion dollar market for competitors within this sector.
In Western Europe, the European Medicines Agency (EMEA) is now accepting Market Authorisation Applications (MAAs) for biogeneric products, which show proven biosimilarity in place of clinical trials.
Reductions in clinical requirements for biogeneric products have the potential to significantly reduce the cost of finished products compared to those of the original patented products. Costs incurred through drug discovery and development may be redirected to product reverse engineering and process engineering.
"As regulatory guidelines are introduced over the next two to three years and some of the biggest biopharmaceutical blockbusters lose patent protection, the biogenerics market is expected to see exceptional growth and rapidly reach billion-dollar levels," commented Frost & Sullivan industry analyst Himanshu Parmar.
In Europe, the new regulatory environment is being tested by the likes of Switzerland-based BioPartners and Sandoz, which have both filed applications to market 'biomilar' versions of human growth hormone in the EU. While the former dossier is still active, Sandoz offering was turned down on procedural grounds. Meanwhile, BioPartners has also filed for approval of a generic version of interferon alpha for hepatitis C.
The originators of biopharmaceutical products are now staring down the barrel of generic competition, as the earliest biopharmaceuticals such as recombinant human insulin have already lost patent protection, and many other drugs such as the blockbuster anaemia treatments incorporating recombinant erythropoietin will follow suit between 2005 and 2007.
In response, they are using a range of tactics to stave off competition from biogenerics manufacturers, including reformulating existing products to improve efficacy, implementing more efficient delivery systems, and engaging in high-level intellectual property (IP) battles.
"To overcome challenges laid down by these companies - the originators of biopharmaceuticals - participants in the biogenerics market may need to establish their own manufacturing systems to manufacture biogeneric products without infringing existing patents on active ingredients or manufacturing processes," said Parmar.
Given that the manufacturing costs for biogenerics are much higher than those of conventional, small molecule pharmaceuticals, developing proprietary expression systems could help minimise costs, he added.
Keeping the prices of biogenerics low is also likely to ensure continued demand from governments, particularly in Europe, that are looking to reduce public spending on healthcare. In the US, where healthcare is privately funded, not only the government but also organisations such as the Centres for Medicare and Medicaid Services and healthcare insurance providers are focused on reducing the costs of expensive biopharmaceuticals through the use of biogeneric alternatives. This is expected to act as a stable driver to the biogenerics market from 2005 to 2011, according to Frost & Sullivan.