$250 Billion in Biotech Drug Savings on Brink of Arrival

By Anna Edney

At least 14 expensive biotechnology medicines that have never before faced generic rivals in the U.S. are being targeted by drugmakers who want to sell imitations at cheaper prices, according to regulators.
For years, patients have been able to buy less expensive copies of existing chemical drugs -- ranging from Lipitor for cholesterol to the antidepressant Prozac -- once their patents ended. That saved the nation $239 billion last year alone, according to the Generic Pharmaceutical Association.
Now a new category of drugs, biotechnology treatments made from living cells that can’t be precisely copied, are mature enough that they can be legally imitated, and the first wave of these new “biosimilars” is coming to the U.S., according to the
Food and Drug Administration. While regular use of the products could save $250 billion by 2024, it’s unclear how quickly they’ll be ready and if they’ll catch on with Americans.
Biosimilars are “something many people have been waiting for for a decade or more,” said Michael Kleinrock, director of research development at the IMS Institute for Healthcare Informatics. “There are a number of uncertainties surrounding these applications. The attitudes of doctors, insurers and patients are far from clear and it will take several years to see how this evolves.”
The first formal application for a biotech imitation came in July from Novartis AG (NOVN), which wants to sell a version of Amgen Inc. (AMGN)’s biotech cancer drug Neupogen, a $1.4 billion product last year. Approval could come in March.

76 Meetings

Pharmaceutical companies have sought at least 76 meetings with the FDA to discuss what studies and actions may be required to bring imitations of 14 different biologic drugs to market, according to Sandy Walsh, an agency spokeswoman. The FDA has held 59 meetings with drugmakers so far, she said.
It’s expected to be a slow process. Regulators have to decide what to name generic drugs that are a little bit different based on the cell lines used to create them, and how to design studies that prove they can be safely swapped with the originals.
The payoff, though, is expected to be worth it.
Because of their complexity, biologics tend to be much more expensive than chemical drugs. Merck & Co. (MRK)’s melanoma drug Keytruda, approved Sept. 4, will cost $12,500 a month for the average patient, or about $150,000 a year for a medicine typically given every three weeks.
While biosimilars may not be able to reach the 85 percent price cut seen with traditional chemical drugs due to the added testing required by the FDA, an expected drop of about 30 percent could be substantial in many cases.

2010 Law

The development of biosimilar drugs for sale in the U.S. was allowed under a law passed by the Congress in 2010. European regulators, meanwhile, began approving biosimilar products in 2006, and cleared imitations of Amgen’s Neupogen for sale in that region in 2008.
“What’s embarrassing is that these drugs have been on the market in Europe for years,” said Steven Miller, the chief medical officer at Express Scripts (ESRX), the St. Louis-based pharmacy benefit manager. His company came up with the $250 billion savings estimate. “In this time of health-care expenses, wouldn’t it be great to be able to use these drugs?”
The second biosimilar to get U.S. approval may be a version of Johnson & Johnson (JNJ)’s arthritis drug Remicade, made by the South Korea-based generic-drug company Celltrion Inc. (068270), which filed its application for approval in August. Other biotech drugs Express Scripts expects will face biosimilar competition include Amgen’s Epogen, for anemia caused by chronic kidney disease, and Roche Holding AG (ROG)’s best-seller Rituxan, for rheumatoid arthritis and certain blood cancers.

High Bar

The FDA is putting a higher bar on biosimilar drugs than regular generics. Because of their manufacturing differences, the agency is requiring a limited set of clinical trials to make sure biosimilars act in the same way as the originals.
This agency is also deciding how to name the drugs.
Generics for small molecule drugs, such as copycat versions of Pfizer Inc. (PFE)’s Lipitor, have succeeded because they all share the same medical name. A doctor can prescribe Lipitor, and a pharmacist can substitute atorvastatin, the chemical name for Lipitor’s active ingredient.
The active ingredients in biotech drugs, though, are made from living cells and each generic version will have to be made from a different originating cell line.

Drug Name

Novartis wants to use both the medical name for the drug, filgrastim, and a brand name that sounds like Zarzio, the brand the Swiss drugmaker has given its drug in Europe, according to Mark McCamish, global head of biopharmaceutical and oncology injectable development at Sandoz, the generics unit for Novartis.
“We found that most physicians, health-care providers and patients know your drug based on a brand name,” McCamish said in an interview.
Large biologic drugmakers like Amgen, though, oppose the idea of allowing biosimilars to carry names that sound too similar, arguing the drugs are too different. Companies keep their manufacturing process secret, forcing biosimilar manufacturers to come up with their own processes to get their products to work just like the original version.
The problem is that “everyone is starting with a different cell line,” said Geoffrey Eich, executive director of biosimilars at Amgen.

Safety Issue

The differences could cause patients to respond differently to biosimilars, and if there’s a safety problem unique to the slightly different version doctors and patients need to know which drug caused it, he and others within the industry have told the FDA.
The agency is working on a guidance document for biosimilar naming expected to come out this year, as well as guidance that will tell drugmakers what data they need to prove their products can be substituted for an original biologic drug.
The European Medicines Agency allows for the same names and doesn’t require the biosimilar manufacturer to add on a qualifying tag to the generic name of the drug, as the World Health Organization proposed in July.
“This is the first one,” said Kleinrock, whose researcher group is part of IMS Health Holdings Inc. (IMS) “We’ll see how it goes. There’s a lot of hope.”