A government panel Wednesday took a major step toward approving a copycat version of a blockbuster cancer drug, paving the way for a new class of cheaper medicines that could save consumers billions of dollars.
An expert Food and Drug Administration panel unanimously recommended that the government approve the drug known as EP2006, a lower-cost imitator of a popular medicine called Neupogen, used to help cancer patients fight off infection while undergoing chemotherapy. The FDA usually accepts recommendations from advisory panels but is not required to.
The drug, manufactured by Sandoz, could win final FDA approval this year, which would make it the first biosimilar, as such drugs are known, to enter the United States. Biosimilars are versions of complex biologic drugs, which are produced from living cells and more expensive and harder to manufacture than ordinary chemical drugs.
These drugs are frequently used to treat cancer and other complex diseases that can result in astronomically high medical bills. Popular biologic drugs include Rituxan and Avastin for cancer and Humira for autoimmune disease.
The wide availability of biosimilars in this country could significantly expand patient access to some of the most expensive, lifesaving drugs on the market. Janet Woodcock, director of the FDA’s Center for Drug Evaluation and Research, called Wednesday’s review meeting “a historic occasion.”
A small overseas market already exists for biosimilars, but the federal government is studying how to regulate the drugs in the United States. The FDA panel’s recommendation comes as insurance companies and policymakers are increasingly scrutinizing the high cost of specialty medications.
It is unclear how biosimilars will be priced in the United States, but they cost about 20 to 30 percent lower than the original biologics in overseas markets.
“Clearly, it’s going to have a big implication for cost,” said Mark Fleury, a policy analyst at the American Cancer Society Cancer Action Network. Fleury noted that insurers have increasingly required patients to pay a higher percentage out of pocket for the highest-cost drugs, while they have to chip in less for much cheaper generics.
“We fully expect the same type of behavior” when the biosimilar market is established, Fleury said.
The pharmacy benefits manager Express Scripts, which has led a crusade of sorts against high-priced drugs over the past year, projects that biosimilars will provide $250 billion in U.S. health-care savings over the next decade if 11 biologics gain biosimilar competition. Neupogen had $1.4 billion in global sales in 2013. Biosimilar competition will mean $5.7 billion in U.S. health savings over the next decade, according to Express Scripts projections.
Rand Corp. projects much lower savings from the introduction of biologics: about $44 billion. The nonprofit research group reported that annual spending on biologic drugs has grown three times as fast as spending on other prescription drugs.
Sandoz, a unit of the Swiss drugmaker Novartis, already markets its Neupogen biosimilar under the name Zarzio in more than 40 countries. The company says it owns more than 50 percent of biosimilar approvals in Australia, Canada, Japan and Europe.
Global sales of biosimilar drugs are expected to grow from $1.3 billion in 2013 to $36 billion by 2020, according to a projection from Allied Market Research.
The domestic biosimilar market is starting to take shape about five years after the Affordable Care Act cleared a regulatory pathway for their entry in the United States. A second biosimilar awaiting FDA review — an imitator of Johnson & Johnson and Merck’s rheumatoid arthritis drug, Remicade — would mean $17 billion in savings over the next decade, according to Express Scripts. Remicade had $8.4 billion in global sales in 2013, when it was one of the best-selling drugs in the world, and biosimilar versions have been launched in Japan and India.
Generics for traditional drugs made from chemical compounds now account for about 85 percent of all drugs dispensed in the United States, according to IMS Health. Their costs are about 80 percent to 85 percent lower than the brand-name product, according to the FDA, so they offer much higher savings than the biosimilars in overseas markets.
Biosimilars are not exact replicas of the original biologic, making these types of drugs more complicated than traditional chemical drugs. So federal regulators must determine whether drugs seeking biosimilar approval are similar enough clinically to the drugs they are trying to replicate.
Federal regulators and drugmakers are still working out the rules biosimilar manufacturers must follow in the United States. Decisions about how biosimilars can be substituted for the original version, or even how biosimilars are named, could affect how broadly they are adopted here.