Consumers and health insurers usually welcome the advent of generic drugs because they lower the cost of expensive brand name medicine and generally have the same therapeutic effect. Earlier this month, the FDA approved the first copycat drugs that aren’t exactly the same, but are essentially so, thus introducing alternatives to whole classes of drugs whose brand exclusivity can be protected for years.
“Biosimilars will provide access to important therapies for patients who need them,” said FDA Commissioner Margaret A. Hamburg in a statement quoted by the New York Times.
The approval is for a class of drugs called “biologics,” which are made from living cells or tissue, not chemicals synthesized in a lab, like most drugs. Their active ingredients are impossible to replicate exactly, so their copycats are called biosimilars, not generics. They don’t infringe on patents because you can’t patent cellular material.
Pharmaceutical companies generally spend years and millions of dollars developing traditional drugs, which is why those brands are protected from competition for so long – the idea is to encourage this investment of money and resources to spark innovation for which there’s no guarantee the results will be successful and a company’s bottom line enhanced.
The process is ripe for abuse by the pharmaceutical industry, which loves to champion its efforts to develop new drugs for needy patients, but also likes to stick them with huge bills while ignoring the fact that they spend billions promoting them and lobbying Congress for special treatment. Reasonable minds wonder why they don’t cut costs for consumers if they have so much money for bold claims they can’t always support. (See our blogs about legal problems for drug makers whose business plans include stretching the truth.)
As The Times pointed out, some of the most expensive drugs in the world are biologics; you might have heard of Remicade and Enbrel, which treat some kinds of arthritis and other autoimmune disorders, and Herceptin and Avastin, which treat certain cancers.
The specific biologic approved by the FDA is Zarxio, which treats infections in cancer patients who are getting chemotherapy. It’s made by Sandoz, and is based on Neupogen, which is made by Amgen. Patients in Europe have been able to take Zarzio since 2009, but because the U.S. had no regulatory process for allowing the marketing of biosimilars, it hasn’t been available here.
The feds approved Zarxio for all the uses of Neupogen, and permitted its label to carry nearly identical language.
In countries where they are sold, biosimilars are about one-third less expensive than their brand-name biologic models, according to Express Scripts, the largest prescription drug benefit manager in the U.S. Some experts believe that discounts could be as high as 90%, and Express Scripts, said The Times, estimates that U.S. Zarxio consumers could save $5.7 billion in drug costs over the next 10 years, and that $250 billion in drug costs could be saved in that period if 11 biosimilars now in development were approved.
Biologic drugs entered the scene in the 1980s and, The Times explained, were thought to be so specialized that making generic versions wasn’t possible. But science has advanced. You can’t make exact copies of the active ingredients, as traditional generics strive for, so biosimilars don’t replicate the raw materials, but they come close in terms of the therapeutic effect.
Amgen is trying to block the sale of Zarxio, claiming that Sandoz did not follow the rules about of informing Amgen in advance of its plans for the drug, which Sandoz denies. But it said it would refrain from selling Zarxio until a decision is made on the injunction or April 10, whichever comes first.
No one should be surprised that Amgen told the Los Angeles Times that it, too, hopes to capitalize on the biosimilar market and start making its own copies of other companies’ biologics. It doesn’t like other companies capitalizing on a new market, but that’s not going to stop it from doing so.
Even if they’re less expensive, maximizing use of the new class of drugs faces some challenges. Generic drug companies don’t rely on marketing to sell their wares, but on pharmacists to substitute the generic for a brand-name drug, and on insurance companies to entice policyholders with better coverage for generics. But this standard substitution can’t automatically happen with biosimilars, at least not yet.
So, The Times suggested, makers of biosimilars might have to market them to doctors to boost prescription numbers, and persuade insurers to use them as the default drugs, as they do generics.
And although marketing biosimilars is new, they still have some competition. Teva sells a copy of Neupogen, called Granix, but it was approved via the process for a novel drug, not as a biosimilar. And Amgen sells a longer-lasting version of Neupogen (Neulasta) that requires fewer injections and might be preferred by patients and doctors, even if it costs more.
The FDA’s approval also raises the question of what to call biosimilar drugs. Some generic drug makers and insurers want biosimilars to have the same generic name as the branded product, because that would make it easier for doctors to use them as substitutes. But some biologic manufacturers want different names in order to make it easier to trace a drug’s side effects to its specific manufacturer.
The FDA, said The Times, sort of split the difference. “Instead of simply calling Zarxio filgrastim, the generic name for Neupogen,” The Times explained, “it called the drug filgrastim-sndz, the suffix standing for Sandoz, the manufacturer.”
To learn more about prescription drug options, see Patrick’s newsletter,“Becoming a Smarter Buyer of Prescription Drugs.”