What is the competitive moat of originator drugs after patent expiration?

Why are biotech drugs so hard to replicate?

Metformin, a commonly used drug for diabetes, can cost as low as 2 cents per tablet in some cases, while some versions are priced at 1 to 2 yuan per tablet. For atorvastatin calcium tablets used to treat hyperlipidemia, the price difference between different boxes can reach around 140 yuan.

Such price gaps are not uncommon in daily medications. What exactly accounts for the "same drug but different prices" phenomenon?

To figure this out, we first need to clarify the concepts of three types of drugs: original research drugs, generic drugs, and biosimilars.

What exactly is the difference between original research drugs, generic drugs and biosimilars?

Let's start with original research drugs. "Original research" refers to the development of new drugs from 0 to 1, which is essentially an extremely challenging "molecule breakthrough" process. R&D teams need to cross the threshold of early drug discovery, go through long preclinical studies, and then rigorously complete three phases of clinical trials. Every step in this process is a critical checkpoint, with the risk of failure at any time.

Statistics show that an original research drug takes an average of 10 to 15 years from preliminary development to final launch on the market, with R&D costs as high as 2.6 billion US dollars. Drugs that can complete the entire process and reach patients can be said to be one in ten thousand.

Next, let's look at generic drugs. For many small-molecule chemical drugs, the logic of generic production is relatively clear, somewhat similar to "solving problems by following formulas", since the questions, formulas and scoring standards are all publicly available. Followers only need to conduct reverse development based on known information, without re-running phase III clinical trials, as long as they pass the consistency evaluation.

However, when drugs move from the field of small-molecule chemical drugs to biotech drugs, the situation is completely different. The generic production of biotech drugs is more like an "open-book exam": although the R&D direction is clear and the general idea of solving the problem is correct, it is almost impossible to achieve exactly the same result as the standard answer.

The core reason behind this is that biotech drugs are usually produced by the expression of living cells, and their molecular structure is far more complex than traditional small-molecule drugs. Every link, from the selection of cell lines, the control of culture conditions, the purification process to impurity control, will directly affect the stability and consistency of the final finished product.

Therefore, biotech drugs cannot be 100% completely replicated, and followers can only achieve "high similarity". This is why the industry calls them "biosimilars" instead of "generic drugs" in the traditional sense.

Crossing Three Thresholds: The Road to Forging Original Biotech Drugs

Semaglutide, which has received much attention in recent years, is a very representative biotech drug. It was first approved for the treatment of type 2 diabetes, and later became the first once-weekly GLP-1RA approved for long-term weight management.

The birth of the original semaglutide first has to cross the first threshold mentioned earlier: the "molecule breakthrough" process. After layers of screening, R&D personnel finally locked in "GLP-1 class drugs", which can mimic the GLP-1 signaling molecules secreted by the human body itself and participate in regulating blood sugar and appetite.

Subsequently, through molecular structure design and peptide chain optimization, the original semaglutide, while maintaining up to 94% homology with the natural human GLP-1, successfully makes up for the shortcoming that natural molecules are easily decomposed, achieving an extremely long half-life in the human body. But this is only the beginning.

The second threshold it faces is how to produce it stably. Many people mistakenly believe that producing a drug is like cooking according to a recipe: as long as the raw materials and steps are the same, the finished product will be similar. But for biotech drugs like semaglutide, things are far from that simple. It is more like assembling a precision watch in the microscopic world.

A peptide chain composed of 31 amino acids needs to be formed in a specific order, and a fatty acid side chain is connected at the key position. Even a tiny deviation in its position, structure or purity may affect the performance of the final molecule.

Producing a small number of qualified samples in the laboratory is only the first step. The real industrial challenge is to push it to large-scale mass production, and must ensure that the products of each batch are stable and consistent. In the process of large-scale fermentation manufacturing, parameters such as temperature, pH value, reaction time and purification conditions need to be strictly controlled.

Because some impurities are highly similar to the target molecule in structure, removing them is like accurately picking out the exact one you need from a group of "twin brothers". Therefore, the process difficulty of semaglutide lies not only in "whether it can be produced", but more importantly in "whether it can be produced for a long time, stably and on a large scale".

This is by no means an easy task. At present, there are still only a handful of enterprises in the world that have large-scale polypeptide production capacity. For example, last month, a major Indian pharmaceutical company Dr. Reddy's Laboratories was exposed to a quality accident involving generic semaglutide.

The root cause of the accident was that problems such as excessive API impurities and substandard efficacy occurred during the large-scale production process. This also confirms that discovering the molecule is only the starting point. Being able to stably produce it again and again truly tests the long-accumulated technical heritage and process experience of pharmaceutical companies.

The last threshold is how to enable patients to "use it for a long time and correctly". The treatment of chronic diseases is like a marathon. Whether the ideal treatment result can be finally achieved depends not only on the efficacy of the drug molecule itself, but also on whether patients can adhere to regular medication.

In real application scenarios, details such as whether the dose display of the injection pen is clear enough, whether the operation feedback when pressing is clear, and whether the drug delivery process is smooth, will directly affect the daily treatment experience and medication adherence of patients.

It is precisely by virtue of this comprehensive control from the drug molecule itself to the terminal drug delivery details that the original semaglutide has now become the most widely used GLP-1 class drug in the world, and has accumulated about 58 million patient-years of real-world use experience globally.

In other words, the value of original research drugs is not limited to a cracked molecular structure. It is a complete system accumulated little by little over a long period of time with huge capital investment and massive real-world data.

Time is the Deepest Moat

Finally, let's re-examine the relationship between original research drugs and their followers. It is undeniable that the advent of generic drugs and biosimilars has greatly lowered the threshold of medication, giving more patients access to treatment opportunities. This is an extremely important social value in the modern medical system, and it is also an inevitable process that all original research drugs will eventually go through.

However, the core value of original research drugs will not dissipate with the end of the patent protection period. Its confidence never comes only from "being the first to be invented", but from being continuously "proven".

From the initial one-in-ten-thousand breakthrough molecular discovery, to the complex production process; from the continuously accumulated clinical research data and real-world use experience, to the long-term patient benefit and diagnosis and treatment ecosystem construction. None of these can be copied with one click when the patent expires.

The safety, exact efficacy and greater medical possibilities in the future precipitated by time may be the deeper moat of original research drugs.