Just last week, Swiss drugmaker Novartis AG applied to create the first generic version of a brand named biologic drug for use in the United States. Their drug, a white blood cell stimulant, would be of great benefit to millions of cancer patients spending every last dime on incredibly expensive biologics. Generic versions of name brand biologics are referred to as biosimilars, and their use as a competitive alternative to the name brand products would almost immediately save suffering American’s millions of dollars.
Biologic drugs (also known as biopharmaceuticals) are a subset of medicines that are grown from or extracted from living organisms. The classification includes things as popular as vaccines and allergenics, as well as promising new technologies like gene therapies and somatic cells. While biosimilars must be bioequivalent or comparable to the original biologic, their makeup may not be identical and they may utilize different manufacturing processes.
These biologic drugs, by their very nature, cost more to produce than chemical medications. A single course of treatment can cost patients more than $100,000. The introduction of biosimilar competition could mean much more affordable access to life-saving treatments. Unfortunately, while regulators have not approved a single biosimilar drug in the US market, patients have doled out billions for biologics to receive treatments that could have been just a fraction of the cost in more than 60 other countries.
In 2012 alone, generic prescription drugs saved Americans over $217 billion. That number has increased dramatically year-on-year and, in real terms, means a significant difference in the quality of life for seniors, the disabled, and the seriously ill. The introduction of biosimilars is slated to save just as the introduction of chemical-based generics did decades ago.
So why hasn’t the US market seen biosimilars yet? More than five years ago Congress passed The Biologics Price Competition and Innovation Act, which was designed to help introduce and foster competition in the biologics market, where barriers to entry are nearly insurmountable. Still, today not a single biosimilar appears to be any nearer to US consumers, because the FDA has yet to write the regulatory rules that would permit competitive entry.
The need for quality control and to ensure the safety and effectiveness of these drugs is clear, but not a single drug has even made its way to the safety-testing phase of trials. Instead, the FDA takes up less urgent matters like how we should be naming the drugs once approved and exactly how much money the FDA ought to rake in during the trial process.
But while the FDA idles along, making those important administrative decisions, what do the real costs look like for consumers? Let’s examine one of the more successful biologic drugs, erythropoietin. The drug – which helps sufferers of kidney disease, anemia and Crohn’s disease – brings in over $100 million each a month in profits.
With a monopoly on the market, biologic drug manufacturers turn their products into cash cows the likes of which are unimaginable. Without competition, as patents expire, the monopoly pricing of biologic drugs continues. One study, undertaken by prescription service ExpressScripts, estimated that given the quick approval of biosimilars, U.S. consumers would see a $250 billion cost savings over the next 11 years. As Alan Daly points out, that savings equates to $2,000 in costs to every U.S. household.
It’s high time the FDA get off their collective hands, dispense with time-wasting, and begin the very important process of safety checking these drugs. For U.S. consumers, their inaction is truly a matter of life and death.
Zack Christenson writes on tech issues for the American Consumer Institute Center for Citizen Research, a nonprofit educational and research institute. For more information, visit www.theamericanconsumer.org.