The Biosimilar debate touches upon several important reasons for innovation failure in a regulated environment – successful, scientific, resolution will be important for the entire sector.

1. Will Biosimilars be an Important Driver
for Innovation and Continual
Improvement in Biopharmaceutical
Manufacturing?
Ajaz S. Hussain, Ph.D.
A Keynote Address: Business of Biosimilars
September 20‐22, 2010, Hyatt Regency,
Boston, MA
www.biosimilarsevent.com

2. Disclaimer
• The opinions expressed in this presentation are those
of the speaker and do not necessarily reflect the views
and/or policies of his current or former employers.

3. Innovation
• “The act of introducing something new” (the
American Heritage Dictionary)
• “A new idea, method or device” (Webster
online)
• “Change that creates a new dimension of
performance” (Peter Drucker)
• “The ability to deliver new value to a customer”
(Jose Campos)

4. Product & Process Innovation*
(outside the pharmaceutical sector)
Rate of Innovation
Rate of Product Innovation
Rate of Process Innovation #1
Dominant Design
Rate of Process Innovation #2
performance maximization sales maximization cost minimization
uncoordinated segmental systemic Time
*A modified representation of the Utterback‐Abernathy´s model of industrial
product and process innovation. The Int. J. Mgmt Sci., Vol. 3, No. 6, 639–656 (1975)

5. Innovation Modes, Innovation Failure, Typical
Sectors, and Policy Response
Mode of Innovation Typical Policy
Innovation Failure Sector Instruments
• Application •Knowledge •Biotech., • High‐tech
of high‐ originates material bridging
science outside science,… institutions
technology commercial to facilitate
sector – this diffusion of
is not well advances
communi‐
cated to
Regulatory potential Competing Regulatory
Acceptance Interests Guidelines
users
Research Policy. 29: 437 (2000)

6. Sources of Innovation Failure
• Ineffective trans‐disciplinary communication
– Systems approach vs. reductionists approach
– Competing commercial interests
– Role of clinical studies to address uncertainties in
quality?
– Clinical – Quality Divide
– Inspection – Review Divide
– Other

7. Process Design Through Analytical &
Process Integration: ‘Biosimilar Delta’
Driver for process innovation
If timely acceptance by regulators
Product Innovation
Innovation
2nd Generation ry
Product o ve
sc
Launch Di
Process Innovation
Development (industry wide or Biosim)
1st Generation
Product Biosimilar Product
Launch
Biosim Delta 1st Generation Product
Regulatory Process
‘Originator Delta’
sales maximization cost minimization
segmental systemic Time

8. My Point of View
• Will Biosimilars be an Important Driver for Innovation and
Continual Improvement in Biopharmaceutical Manufacturing?
• No
– Competition, by shifting demand, can be a driver for product
innovation. However, competition can not be expected to be an
important driver for process innovation
– High, non‐scientific, barriers to entry (product approval & designation)
will ensure that process innovation remains only an option that some in
industry will exercise
– Recent financial crisis may have reemphasized the need for process
innovation and/or may altered the course of process innovation
but…….our society is not yet prepared to address important reasons for
innovation failure in a regulated environment
• But, the Biosimilar debate touches upon several important reasons
for innovation failure in a regulated environment

9. The Biosimilar debate touches upon
several important reasons for
innovation failure in a regulated
environment

10. At FDA, in 2004, A Focus on Innovation
and Continual Improvement
www.fda.gov/ohrms/dockets/ac/04/.../2004‐4080b1_01_manufSciWP.pdf

11. A Systems Perspective on Regulatory
Compliance & Types of Improvement
www.fda.gov/ohrms/dockets/ac/04/.../2004‐4080b1_01_manufSciWP.pdf

12. Types of Improvement
CAPA Continual Improvement Innovation
Product is out of Product is within Revolutionary, to be a
“specification” (OOS) “specifications” leader
or there are Acceptance criteria ‐ ROI, Top‐down
procedural deviations variable/continuous Project based
ʺCrisisʺ ‐ immediate data Specialist/Technical
action needed Evolutionary, experts involved
Required by incremental, daily Superior ability to
regulators activity justify specifications
Carried out by plant and convince
and quality staff regulators
ʺDrive out fearʺ that inhibits continuous learning and improvement ‐“Specifications”
www.fda.gov/ohrms/dockets/ac/04/.../2004‐4080b1_01_manufSciWP.pdf

13. Specification ‐ Uncertainty
Quality –to-
Clinical gap is
a significant
challenge!
Regulatory
specifications
established
after “clinical
trials”
CMC Review –
CGMP Inspection
Disconnect
Specification –
Capability:
Disconnect
http://www.fda.gov/OHRMS/DOCKETS/AC/05/slides/2005‐4137S1_06_Hussain.ppt#371,11,Quality – Clinical Gap: Uncertainty

14. Biosimilar Development: A Focus on
‘Design Specifications’
http://www.sandoz.com/assets/content/en/product_range/biosimilar_presenation/Pioneering_Global_Development_of_Biosimilars_BIO_2008_FNa_FINAL.pdf

15. Ajaz S. Hussain. This slide is from a presentation at the 5th EGA Symposium on
Biosimilars, London (2007). Full presentation is available on the internet.
www.bogin.nl/files/A_Hussain.pdf

16. Ajaz S. Hussain. This slide is from a presentation at the 5th EGA Symposium on
Biosimilars, London (2007). Full presentation is available on the internet.
www.bogin.nl/files/A_Hussain.pdf

17. Ajaz S. Hussain. This slide is from a presentation at the 5th EGA Symposium on
Biosimilars, London (2007). Full presentation is available on the internet.
www.bogin.nl/files/A_Hussain.pdf

18. Ajaz S. Hussain. This slide is from a presentation at the 5th EGA Symposium on
Biosimilars, London (2007). Full presentation is available on the internet.
www.bogin.nl/files/A_Hussain.pdf

19. Ajaz S. Hussain. This slide is from a presentation at the 5th EGA Symposium on
Biosimilars, London (2007). Full presentation is available on the internet.
www.bogin.nl/files/A_Hussain.pdf

20. Ajaz S. Hussain. This slide is from a presentation at the 5th EGA Symposium on
Biosimilars, London (2007). Full presentation is available on the internet.
www.bogin.nl/files/A_Hussain.pdf

21. Ajaz S. Hussain. This slide is from a presentation at the 5th EGA Symposium on
Biosimilars, London (2007). Full presentation is available on the internet.
www.bogin.nl/files/A_Hussain.pdf

22. Ajaz S. Hussain. This slide is from a presentation at the 5th EGA Symposium on
Biosimilars, London (2007). Full presentation is available on the internet.
www.bogin.nl/files/A_Hussain.pdf

23. My Point of View
• Will Biosimilars be an Important Driver for Innovation and Continual
Improvement in Biopharmaceutical Manufacturing?
• No
– Competition, by shifting demand, can be a driver for product innovation.
However, competition can not be expected to be an important driver for process
innovation
– High, non‐scientific, barriers to entry (product approval & designation) will
ensure that process innovation remains only an option that some in industry will
exercise
– Recent financial crisis may have reemphasized the need for process innovation
and/or may altered the course of process innovation but…….our society is not
yet prepared to address important reasons for innovation failure in a regulated
environment
• The Biosimilar debate touches upon several important reasons for
innovation failure in a regulated environment – successful,
scientific, resolution will be important for the entire
sector