Healthcare Newsletter – June 2017

Tough Luck for Biosimilars in June as FDA turns down Two Approvals
Interests Spike While the industry is basking in FDA’s recent enthusiasm towards biosimilars, the month of June has presented nothing but hard times. The regulator has slammed down two big biosimilars for Amgen’s drugs this month, Pfizer’s Epogen (epoietin alfa) biosimilar and Coherus’s Neulasta (pegfilgrastim) biosimilar. The reason cited for the Epogen biosimilar rejection is a manufacturing issue with Pfizer’s fill-finish line that has led to a rejection for a second time. This adds further momentum to current manufacturing issues in the industry and strengthens the call for higher emphasis on manufacturing quality standards. Reasons cited for rejection of the pegfilgrastim biosimialr raises bigger concerns. Besides more manufacturing information, Coherus has also been asked for reanalysis of some patient data. This is worrisome, considering there has been no FDA or EMA approval for this first generation biosimilar so far, and not for lack of effort. The only approved biosimilars are in India (4 of them from Dr Reddy’s, Intas, Gennova and Lupin) but were approved under the old guidelines which had lower regulatory barriers. Sandoz’s pegfilgrastim biosimilar was rejected by FDA and withdrawn from EMA for biosimilarity concerns and Gedeon Richter faced similar roadblocks in Europe and withdrew its application. All this, while the non-pegylated version has been approved in EMA. Though we are surging beyond the second generation biosimilars, regulatory challenges posed by this asset points to the fact that every biosimilar is characterized by high level of complexity.
Continuing Uncertainty surrounding Trumpcare and Healthcare Coverage
AffordabilityThe US Senate’s decision to postpone its vote on the bill to repeal ObamaCare is adding fire to already prevailing uncertainty fueled recently by the Congressional Budget Office’s projection of 22 million people falling out of healthcare coverage under the new plan. While Obamacare was ruled as a law with good intention of striking equity by bringing more people in the system to increase access to health coverage and quality of care, it couldn’t make a mark due to weaker enforcement, thereby accentuating premium burdens.While Trumpcare proposes no individual mandate, continuous coverage is the new requirement with penalty fee for failure to keep coverage.On the other end, while the level of prescription drug coverage depended on the health plan, and not all medications were covered under Obamacare, with the advent of Trump Care, states can waive various provisions exempting insurance companies from having to cover essential healthcare benefits. This would drive up costs of prescription medication if states choose to opt-out of these provisions. While the Senate struggles to bring together the conservatives, who are fixated on going back to pre-Obamacare systems, and the moderates, who are struggling to make peace with the projected coverage losses, it is surely a nail-biting wait for patients as well as the healthcare industry which are at the tail-end of the ACA, continuing to assess the ramifications.
Industry Thrust on Next Generation Sciences calls for early thinking of Commercial Models
Private Vaccines Market in India Lonza has acquired Netherlands based reputed cell and gene Therapy contract manufacturer Pharmacell BV, which exhibits a manufacturing competency in autologous cell and gene therapy products. (For more on the deal, click here). This acquisition helps Lonza in geographical expansion in European market and emerge as an early mover as an international player in this field. Although a few commercial therapies exist today, cell and gene therapy are undeniably the future of medicine, with large amount of R&D thrust and it is encouraging to see a top pharma player emphasize on gaining an early foothold in the space. As we applaud the development, it is hard to ignore the pressing need to think about commercial pricing models for such promising therapies. With a smaller target audience, the ever present price scrutiny for therapies for rare/ orphan diseases is sure to haunt regenerative medicine tomorrow. Thus, it is imperative to learn our lessons from accessibility issues surrounding rare disease therapies and trigger early thinking on devising access and commercial models that aptly reward innovation to ensure companies recover their hefty R&D investments, and at the same time alleviate affordability and access concerns for the patients.
Blurring Competitive Lines between Pharma and Medical Devices
Home-Health Pharma major Allergan has acquired medical device company Keller Medical, the maker of the Keller Funnel used to minimize implant contamination in breast augmentation and reconstruction procedures. In a largely unorganized and fragmented global aesthetics medicines market, Allergan, being one of the few organized players with its flagship Botox cosmetics, is seen to be aggressively strengthening its foothold through a slew of acquisitions. Recent acquisitions in just past 3 years include LifeCell Corporation (regenerative medicine) and Zeltiq Aesthetics (body contouring) in early 2017, Anterios, Inc. (next generation Botox) in 2016 and Kythera Biopharmaceuticals (prescription aesthetic medicines) in 2015. Keller Medical acquisition is Allergan’s second acquisition in the medical devices space in the recent past, with Northwood Medical Innovation Ltd for its earFold™ medical device (for correction of prominent ears) in 2015 being the first. Thus far, pharma industry participation in medical devices has been largely limited to either therapeutic products that are regulated as medical devices or drug device combinations (such as insulin pens). Thus, Allergan’s aesthetics business is setting an example for active mainstream participation of pharma companies in the medical devices space. Such blurring of lines can also be seen from pure play medical device companies seeking a share in the biopharma segment making use of sales force synergies in the therapeutic area. A pertinent example is that of orthopedic device companies foraying into orthobiologics. As competition thickens in both these segments of healthcare and companies seek new growth avenues, we expect this crossing over trend to continue.
EMA Cranberry Ruling set the balls rolling for Regulatory Repealing in Self-care Medical Devices Classification
Home-Health The European Commission has recently ruled that Proanthocyanidin (PAC) based products extracted from cranberries claiming to treat UTI in women can no longer be treated as medical devices, on the grounds that, a pharmacological action is more likely than a mechanical mode of action in this case. Exploring alternate regulatory routes and positioning therapeutic and nutraceutical products as self-care medical devices to subvert regulatory scrutiny is long prevailing in the ever converging pharma med tech space. Ever since the self-care medical device regulations came into the picture in 1997, companies have explored loopholes to register products such as condoms, nasal sprayers, vaginal lubricants, and pregnancy tests as medical devices. To add to the confusion, the regulatory authorities have so far not seen eye to eye on the classification of many such products.PAC products, for instance,have been treated as food supplements, medical devices and OTC products in different parts of Europe. Netherland based ‘i-say’ was the first firm to get approval as class IIb medical device for its cranberry based oral capsules in 2011, while Arkopharma which obtained class IIB medical device status for its product Cys-control was revoked by France’s medical product regulators (ANSM) on the grounds of insufficient data to prove its medical device stature. Implementation of this new rule will tighten the regulatory leash on this category and will soon make many pharmaceutical companies revisit their strategy to revert regulatory status of their PAC products and this could be just the beginning of repealing the regulatory ambiguity in medical device classification. We also observe similar regulatory ambiguity and ease of commercialization based decision-making by companies for biologic wound healing and certain regenerative products in the US market, where several of these have been approved through the 510k route with limited to negligible clinical data. While there isn’t any harbinger of change in the US situation, we urge companies to use caution, given global developments.


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MANDATES —ongoing assignments and partnering opportunities

  1. Buy side mandate – US generic opportunities
  2. Strategic investments – Leading Israeli CDMO with strong expertise in topical products
  3. Series A VC fund raising – Artificial Intelligence based digital health venture
  4. Business Plan – Medtech Translational Center


  1. Cold Chain Technologies: Transforming Food Supply Chains
  2. Embracing Innovation, Driving Growth Across Healthcare Continuum – “Making in India”
  3. The Make in India Imperative – Position Paper on Regulatory and Policy Changes required for Sustained Competitiveness of the Indian Vaccine Industry
  4. Indian Orthopedic Devices Market A $2.4 Bn Opportunity
  5. Biosimilars – How can we realize the $ 240 Bn Opportunity

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