The U.S. Food and Drug Administration for the first time has approved a generic version of a biotech drug, a huge milestone that could save Americans billions of dollars.
Biotech drugs are powerful medicines with tremendous healing powers, but they haven’t been available in generic form because, unlike chemical and compound-based drugs, they are created within living cells and are extremely difficult to replicate cheaply, according to an Associated Press report.
However, the FDA has signed off on Novartis’ version of the drug Neupogen, which boosts blood cells to fight cancer in patients. The price for a 30-day supply of Neupogen averaged about $3,500 last year, and the drug had sales of $839 million last year.
Express Scripts Holding Co., which is the country’s largest prescription benefit manager, estimates that this new generic drug, which will be marketed as Zarxio, would save the U.S. health system $5.7 billion over the next decade — and that’s for just one biotech drug.
There is no official price tag for Zarxio, which will be released later this year, but the company says that the drug — which is referred to as a “biosimilar” — will be priced competitively.
Biotech drugs are extremely costly and are financially draining on the U.S. health system. Neupogen is expensive, but it pales in comparison to some drugs that can reach $100,000 per year. These drugs account for 30 percent of drug spending nationwide, and five of the top 10 revenue-generating drugs are biotech medicines. Biotech meds were first introduced in the 1980s and haven’t had to endure competition from generic competitors — until now.
The FDA has finally created a regulatory pathway for companies that want to market biosimilars. The biotech industry had fought against allowing competition, arguing that their drugs were simply too complex to be accurate reproduced.
As biosimilars get approved, it could lead to plummeting prices for life-saving medications such as insulin, chemotherapy drugs, and human growth hormones.
Novartis has already been selling biosimilars in other nations, with drugs available in about 60 countries.