“Don’t Touch My Bags If You Please, Mr. Customs Man”


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protection (only relevant in countries that honor this). They will weigh a number of factors, including whether similar treatments are already for sale in their country as well as the number of people in their own region that would likely benefit from the drug. The incidence of particular diseases varies greatly in different parts of the world, and if the disease you have is not prevalent in China or India, for example, then there would be little incentive to manufacture a drug to treat it in that country.

Location—My scenario above has my imaginary patient flying to China to buy Chinese made drugs. Some less worldly travelers might find this lengthy trip intimidating enough to stay home. But suppose these drugs were made in China or India and then exported to a country closer to the U.S., like Mexico, where buying them would be much more convenient? Would that increase the likelihood of this scenario happening? Since drugs are much easier to export than hospitals equipped with trained doctors, this is a significant difference from the flying-to-have-surgery setting described above.

Cost—This is likely to be the most important factor. Finding out how much drugs cost here in the U.S. is surprisingly difficult (go to Google right now and try it). Let’s do a quick case study with etanercept (Enbrel), ranked by EP Vantage as the best-selling biologic in the world with 2008 sales of $6.46 billion. Etanercept, a soluble TNF inhibitor developed by Seattle’s Immunex (since acquired by Amgen) is used primarily for treating rheumatoid arthritis and psoriasis. In the U.S., this drug is usually dosed at 50 milligrams a week. My local drug store put the cost at about $26,500 a year; at drugstore.com the cost was about $21,400 a year. In China, a version of this drug, known as Yisaipu, lists for $64 for 12.5 mg. This works out to $256 for the same weekly recommended dosage in the U.S., or a yearly cost of $13,312. Assuming your travel expenses are under $2,000, then one could still save between $6,000 to $11,000 a year by buying this drug in China. Buying this drug in Mexico, where it is apparently exported, would save significantly on the travel expenses. This looks like a pretty significant savings, although still a very large expense. Manufacturing biologics, even in China, is an expensive enterprise.

Quality—If you’re going to pay thousands of dollars to purchase drugs overseas, you’ll want to feel confident that what you’re buying is up to snuff. First off, are you getting the real deal? A vial full of reconstituted proteins looks no different than a vial of water. Does the vial contain the drug … Next Page »

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Stewart Lyman is Owner and Manager of Lyman BioPharma Consulting LLC in Seattle. He provides strategic advice to clients on their research programs, collaboration management issues, as well as preclinical data reviews. Follow @

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2 responses to ““Don’t Touch My Bags If You Please, Mr. Customs Man””

  1. steve s says:

    I would like to hear Dr Lyman’s opinion on the future of outsourced development and manufacturing of biologics to China, Singapore, Korea and India. Big pharma is already building manufacturing and R&D in China and several Biotech companies are planning the same. Nektar has a major R&D site in India. Medicinal chemistry work at CMO, CRO and company owned facilities are largely accomplished overseas. Today, most if not all small molecule generic drugs are manufactured in China and legally imported to the US for testing, formulation, and distribution. That’s why Walmart can offer generic small molecule drugs for $4 per month. What happens 10 years from now to US based R&D and manufacturing of biologics when China and India have mature regulatory systems, huge biologic CMO capacity, and Big Biotech owned manufacturing sites? Can Amgen afford to not manufacture in China?

  2. Steve, I delayed answering your question to give others a chance to chime in. The trends are clear that the production of biologics overseas is growing rapidly. There are a number of companies in countries such as India and China that are already manufacturing generic biologic versions (biosimilars) of epo, G-CSF, GM-CSF, insulin, growth hormone, and others for their own markets. At present there are strong barriers that keep these molecules from being exported to some countries, such as the US, although they are being exported to other countries around the world. There are a number of political, organizational, intellectual property, and manufacturing issues that will need to be resolved before we see large scale production of biologics made overseas with the intent of selling them in the US. One of the primary factors will be that the US FDA will need to establish inspectors in these countries to sign off on the quality of the drugs made there. There will need to be a significant effort to scale up manufacturing expertise and approved supply chains in these countries, and to get local government approval as well. We will see Big Pharma respond to the financial threat of biosimilars by making their own generics to compete against their branded biologics. This is already happening with small molecules. In addition, there will be an increased emphasis on second generation biologics to extend patent protection i.e. drug franchises, as Amgen has done with Neupogen/Neulasta and Epogen/Aranesp. I will also predict that this outsourcing trend will not be without serious challenges, as Boeing has seen with their outsourcing program of the 787 Dreamliner. Producing products locally with a skilled, highly trained and experienced workforce will always have certain advantages over outsourcing to a foreign country, especially when problems arise and when you are trying to make a product for the first time.