'Biosimilar' drugs could save patients, USA billions

In a move expected to increase competition and lower drug prices, the Food and Drug Administration today approved the first "biosimilar" drug, designed to closely mimic existing drugs grown in living cells.

Pharmaceutical companies have been able to produce low-cost generic drugs for three decades, but they haven't before been able to produce knockoff versions of these more complicated therapies.

The new drug, Zarxio, is "highly similar" to the cancer drug Neupogen, according to the FDA. Both drugs aim to alleviate a common complication of chemotherapy, in which patients lose white blood cells, putting them at higher risk of life-threatening infections.

Unlike traditional drugs made with chemicals in a lab, Neupogen, Zarxio and other so-called biologics are grown in organisms such as animal cells, bacteria or yeast.

While Neupogen has been a major advance for patients, it's also expensive, says Len Lichtenfeld, deputy chief medical officer at the American Cancer Society. Neupogen provides a protein that signals the body to start making white blood cells. It is administered to patients intravenously when their white blood cell count is low.

The average price for a 30-day supply of Neupogen was about $3,500 a month last year, according to Express Scripts, which analyzes the pharmaceutical industry.

Although biologics make up only 1% of all prescriptions, they will account for half of all prescription drug costs by 2018, according to Express Scripts.

Making biologic drugs is far more difficult and complicated than making a conventional drug. This has limited competition, keeping prices high, says Seth Ginsberg, co-founder and president of Global Healthy Living, a patient advocacy group.

Six years ago, Congress stepped in to speed up development of these drugs. It passed the Biologics Price Competition and Innovation Act of 2009, part of the Affordable Care Act, which reduced the number of steps involved in getting biosimilars approved.

Many other biosimilar drugs are now in the pipeline, says Ginsberg, noting that a number of expensive, brand-name drugs will lose their patent protection in coming years.

Zarxio's manufactuer, Princeton, N.J.-based Sandoz, hasn't yet announced a price. But Express Scripts projects that it will cost 30% less then Neupogen. At that price, Zarxio would save the health care system $5.7 billion over the next decade, says Express Scripts spokesman David Whitrap.

Neupogen, made by San Diego-based Amgen, had $1.4 billion in sales last year, according to Express Scripts.

The FDA is also considering a biosimilar version of Remicade, a rheumatoid arthritis drug, according to Express Scripts.

Express Scripts estimates that approving biosimilars for 11 leading drugs — including Remicade and the cancer drug Avastin — would save the country $250 billion over the next decade. Europe began approving biosimilars in 2006. Since then, biosimilars have been approved in Japan, Canada, Australia, South Korea and India.

Mariah Leach, a 32-year-old mother of two from Louisville, Colo., says biosimilar versions of her rheumatoid arthritis drugs could save her a lot of money. She's paid up to $1,000 for a one-month supply of the biologic drug Enbrel, even with insurance. Leach says she can only afford the drug now because of a copay assistance program from the manufacturer, which limits her monthly costs to $10.

But Leach also has concerns.

She is afraid that insurance companies will try to force patients to accept cheaper biosimilars, even if patients are doing well on their current drugs.

Under the 2009 law, a biosimilar may be substituted for another drug — without a doctor's consent — only if the FDA says the two medications are interchangeable. The FDA has said that Zarxio is not interchangeable with Neupogen.

Leach recently testified about her concerns before the Colorado legislature, asking lawmakers not to allow insurers to substitute biosimilars for a patient's current drug without first notifying the patient or patient's doctor.

"I'm sure patients would love to pay less," Leach says. "But it's important that patients and doctors be on board before they get biosimilars."