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Biosimilars Lure Major Drugmakers Into the Generics Biz

About $47 billion of drugs from human cells will soon go off patent. Copying them won’t be easy
Biosimilars Lure Major Drugmakers Into the Generics Biz
Photo illustration by 731; Photograph by Tim Hawley/Getty Images (pills)

Call it the Revenge of Big Pharma. Generic drug companies such as Teva Pharmaceutical Industries have made billions since the late 1980s by reverse engineering best-selling drugs that came off patent—escaping hefty development and marketing costs—and selling them cheaply. When it comes to copying the best-selling treatments that are coming off patent today—a category known as biologics, medicines produced using the body’s own cells rather than through chemical reactions in a lab—the companies with the expertise to develop and market them are pharmaceutical giants. That leaves companies like Israel-based Teva, the largest maker of generics, increasingly on the sidelines.

The biologics losing patent protection over the next six years had total annual sales of $47 billion in 2012, according to Bloomberg Industries. However, the rules of the lucrative knockoff drug game are being altered. The derivatives of biologics, known as biosimilars, are far more complex to make than chemical generics. Drug companies that want to sell copies of biologic medicines such as Roche Holding’s $7 billion-a-year rheumatoid arthritis treatment Rituxan require expertise and money to produce and market to the public and physicians. “There’s this dawning realization that biosimilars are in many ways the same as branded products,” says Duncan Emerton, Datamonitor Consulting’s biosimilars practice leader.