Biosimilars

By | Updated Sep 3, 2015 4:41 PM UTC

A rose is a rose is a rose, and ibuprofen is ibuprofen no matter what generic-drug company makes it. The chemicals in one batch are identical to chemicals in another. Many new drugs, however, aren’t mixtures of chemicals produced by recipe but are organic substances such as hormones, antibodies and other proteins. They’re called biologics and are generally produced within genetically engineered cells that in effect become factories. Because each biologic drug can be traced back to a single cell, no two versions are ever exactly alike; a generic version can be similar to the branded equivalent, but never exactly the same. That’s why they’re called biosimilars. That’s also left U.S. regulators with thorny questions about what’s in a name — questions that are as much economic and political as scientific. At stake is the potential billions of dollars American consumers could save if biosimilars cut into the market share of drugs that cost as much as $150,000 a year per patient.

The Situation

Years after sales began in Europe, Japan, Australia and India, the first biosimilar reached the U.S. market in September 2015, when Novartis began selling an imitation of Neupogen, a biologic made by Amgen that helps cancer patients increase depleted white blood cells — an estimated $1.2 billion product in 2014. The new drug, Zarxio, had been approved by the Food and Drug Administration in March. In the four years after the Affordable Care Act opened the door to biosimilars in 2010, an estimated 14 applications were submitted to the FDA. Heavy lobbying is still underway on the question of whether biosimilars can be sold under the name of the active ingredient in the original drug, the way generics are. That’s the case in the European Union but not elsewhere. To avoid global confusion, the World Health Organization has proposed creating a standardized set of biosimilar codes,, which countries taking different approaches on naming can all draw on. In a sign of how attractive the field is becoming, in February 2015 Pfizer said it would spend $17 billion to buy Hospira, a company focused on biosimilars.

The Background

The biotech industry traces its roots back to the use of moldy soybean curds as a medicine in 500 BC. Contamination of vaccines made from horse serum played a role in the drive to create the FDA. But in 1984 the biotechnology revolution was too new to fall under the provisions of a new law that expanded the use of generic drugs in the U.S. Under that law, drugmakers have been able to make copies of traditional chemical drugs — ranging from Lipitor for cholesterol to the antidepressant Prozac — once their patents ended, without having to do additional clinical trials. In Europe, the sale of biosimilars was approved in 2006 and their use is growing rapidly. Japan has been approving biosimilars since 2009 and Australia since 2010. The process for approval in the U.S. calls for more testing than is required for traditional generics, costs that will cut into potential savings. Biosimilars won’t force prices down the way generics did, but they could shave 20 to 30 percent off spending on biotech drugs on average. Express Scripts, which manages the pharmacy benefits of 85 million Americans, estimates biosimilars could save $250 billion over the next 10 years.

Source: IMS Health

The Argument

Names matter in marketing, which is why the industry is fighting over what to call biosimilars. A traditional generic, like a copy of Lipitor, is called atorvastatin, the active ingredient in Pfizer‘s brand-name cholesterol pill. This makes it easy for a pharmacist to fill a Lipitor prescription with a cheaper generic. Opponents have argued slight differences in the “factory’’ cells from which biosimilars are made could cause patients to react differently to a copycat version of a biologic. Potential biosimilar-drug makers, including generic-drug companies, say FDA regulations will ensure that copies will be safe and effective. The WHO’s proposal — to use the names of active ingredients and create a database of codes about specific biosimilar products that can be used by countries that want to offer more information — is an attempt to retain some measure of global standardization. If this all sounds confusing, you’re in good company — a March survey found that a quarter of doctors in Europe weren’t able to define biosimilars. The question for the industry, and consumers, is how much that confusion cuts in to the savings biosimilars can offer.

The Reference Shelf

First published Nov. 3, 2014

To contact the writer of this QuickTake:
Anna Edney in Washington at aedney@bloomberg.net

To contact the editor responsible for this QuickTake:
John O'Neil at joneil18@bloomberg.net