Last month Biocon together with Mylan became the first drugmaker to win FDA approval of a biosimilar of Roche’s blockbuster cancer drug Herceptin, a drug that has raked in $2.5 billion in U.S. 2016 sales. Biocon has also had much success with insulin copies, winning a 2016 approval in Japan for its version of the world’s top-selling insulin, (Sanofi’s) Lantus. So what are biosimilars are these the same as generic products? Indian and Chinese pharma industries have been at the forefront of generics manufacturing for almost 50 years. In fact, one could say that in India the domestic pharma market is nothing but a generic market with Indian brand names given to these generics. This is because the Indian pharma industry carries out hardly any research and development. There are several reasons for this, the primary one being the prohibitively high cost of developing a new drug molecule and bringing it to fruition after lengthy and expensive clinical trials. Generics are products which contain molecules or ingredients that have gone beyond the period of their patents. Whenever a new molecule is discovered it is patented – patents are applicable for 20 years from the time the application is accepted. While this may seem a long time, the complete picture tells a different story. While a patent is applicable from the time the application is accepted, it may take up to twelve years on an average to bring a molecule through product development and clinical studies through the NDA (New Drug Application to the FDA). The FDA then takes an average 18 months to 2 years to review and clear it (but only 60 days to reject it!). So by the time the product is ready to be taken to market, it has already lost 14 of its 20 years of patent life and has only 5 to 6 years that can be commercialised as a patented new product. Generic drug manufacturers, on the other hand, are waiting in the wings studying products that have a year or so to patent expiry. They manufacture the drug through their own processes, and through drug equivalence studies prove to the authorities that their generic drug is as safe and efficacious as the patented drug. Generics thus approved and can be sold in the market as soon as the original drug’s patent expires. To understand biosimilars, we must look at biological products. Biologics are complex, protein-based drugs including insulin, monoclonal antibodies to block inflammation in rheumatoid arthritis, and drugs to treat cancer, multiple sclerosis, and other serious diseases. These products may be produced through biotechnology in a living system, such as a microorganism, plant or animal cell, and are often more difficult to characterise than small molecule drugs. They include a wide range of treatments such as vaccines, blood and blood components, allergenics, somatic cells, gene therapy, tissues, and recombinant therapeutic proteins. Biologics have revolutionised treatment for many conditions, but are often expensive in terms of cost per dose. Biosimilars are not generics, and there are important differences between the two. The active ingredients of generic drugs are the same as those of brand name drug, and the generic drug manufacturer must demonstrate the generic is bioequivalent to the brand name drug. By contrast, biosimilars manufacturers must demonstrate that the biosimilar is highly similar to the original biological product, except for minor differences in clinically inactive components and that there are no clinically meaningful differences between the biosimilar and the reference product in terms of safety and effectiveness. The biggest difference between small molecule drugs and biologics is that biologics typically do not face generic competition after their original patent protection has expired, thus extending high prices indefinitely. US FDA can approve generic copies of traditional small-molecule drugs like statins, oral chemotherapeutics, and antihistamines based on evidence from relatively small and inexpensive studies to demonstrate bioequivalence. Competition between multiple generic manufacturers can ultimately (after patent expiry and litigation if happens) drive prices down by 50 to 80 per cent in most (small-molecule) generic markets. Globally, the increasing cost of cancer treatment is placing a noticeable burden on healthcare systems, primarily a result of costly biologics, where an increasing inclination towards biosimilars is being observed. Furthermore, high therapy cost of biologics in the treatment of cancer will undoubtedly play an essential factor in the growing inclination towards biosimilars. The International Agency for Research on Cancer (IARC) estimates that there were 14.1 million new cancer cases and 8.2 million cancer deaths worldwide in 2012. These figures are expected to grow to 21.7 million new cancer cases and 13 million cancer deaths by 2030 solely due to the growth and ageing of the population. India recorded about 3.9 million cancer cases in 2016. Increasing initiatives by governments the world over to provide cost-effective treatment to cure deadly diseases will serve to boost the penetration of biosimilars in developing countries, which in turn will increase the market for biosimilars. The WHO launched a pilot program for prequalifying biosimilars, making some of the most expensive cancer treatments more widely available in developing and underdeveloped countries. Through this initiative, WHO has focused on two essential drugs, rituximab (non-Hodgkin’s lymphoma and chronic lymphocytic leukaemia), and trastuzumab (breast cancer). In 2014, the Rand Corporation published a perspective titled, The Cost Savings Potential of Biosimilar drugs in the US. Studies referenced in this report estimate that the short to mid-term (i.e., within ten years) savings from biosimilars arrive at a range of 10 to 50 per cent reduction in unit price. In other words, if all else is held constant, and if every patient is transitioned to a Biosimilar, spending on biologics will fall by between 10 and 50 per cent. While the savings are not as high as in the generics market, they are still too significant to ignore. It is early days yet, and the savings to patients depend on numerous factors applicable to different markets. For example in the EU, there are several price-controlled products, whereas in the US not only is there no price control but there are no guarantees that just because a drug is approved it will be endorsed by insurance companies, or stored on site by hospitals or prescribed to patients by their doctors. India’s generic-driven domestic biopharma industry has created a strong foundation for biosimilars development, and Indian companies are positioned to become major players in the global biosimilars market. By the time its biosimilars regulatory pathway was issued by India’s Drug Authorities in 2012, India had already approved more than 25 products designated as ‘similar biologics’. A number of Indian companies are well ahead of their regional competitors. While the growing need for biosimilars in emerging markets has opened up opportunities, these are throwing up their own set of challenges. Regulators in these jurisdictions will need to continue to develop capability and confidence to operationalize their biosimilars guidelines and implement timely review processes to swiftly bring these important therapies to patients who need them the most. A vibrant biosimilars market will create effective competition against biologic medicines and bring down prices, just like generic medicines compete against patented drugs.