Generic Drugs vs. Biosimilar Biologics

Y. Tony Yang, ScD, LLM, MPH., Associate Professor, Department of Health Administration and Policy, George Mason University, Fairfax, Virginia. Charles Bennett, MD, PhD, M.P.P., Smart State and Frank P and Jose M Fletcher Chair, Medication Safety and Efficacy, Smart State Center of Economic Excellence, University of South Carolina and the Hollings National Cancer Institute Designated Cancer Center of the Medical University of South Carolina, Charleston, South Carolina.

Q: Are biosimilars the same as generic versions of biologics? Will they be approved by the FDA? Are they safe? Are they cheaper? What about the intellectual property rights of the manufacturer of the reference biologics? If they are only slightly less expensive than the reference biologics, why would anyone prescribe them- particularly if we are not certain that they are as safe as the reference biologic?
A: Biosimilars are NOT generic versions of biologics. Biosimilars are HIGHLY SIMILAR to the reference product they were compared to, but have allowable non-clinical differences. Differently, generic drugs are copies of brand-name drugs, have the identical active ingredient, and are the same as those brand name drugs in dosage form, safety, strength, route of administration, quality, performance characteristics and intended use. Biosimilars are produced from a living organism; therefore, it is impossible to produce an exact copy of the reference biologic. Two biosimilars are approved in the U.S. as of July 2016: one is marketed (Zarxio, a Neupogen biosimilar) and the other is involved with patent litigation (a Remicaide biosimilar approved in April). A third and fourth biosimilar received unanimous votes in July of support from FDA’s Arthritis Advisory Committee (a Humira and an Enbrel biosimilar) although patent litigation may occur before marketing is allowed to begin.
For years, biosimilars have been approved and safely used by patients in Europe, Japan, Australia and other countries. While the regulations for approval are similar internationally, Europe has been way out in front on approving biosimilars and the U.S. is just entering this market. The biosimilar approval in developed countries relies on each country’s regulatory agency’s previous findings that the agency-approved reference biologic is safe and effective.
Although biosimilars in the U.S. are not expected to provide the 70-80 percent savings we have seen with traditional generics, biosimilars have historically cost at least 20-30 percent less than the reference product, which can cost over $100,000 per year. Zarxio came to market in the U.S. at a 15 percent lower cost than its reference biologic. That implies the price differential between a biologic and its biosimilar is more likely to approximate the competition in a multi-brand category of drugs rather than between a reference drug and its generic. Nevertheless, these cost savings from biologics help give patients access to these complex drugs. By improving access to biologics through biosimilars, more patients have the potential to receive life-changing treatments. The reduced cost of biosimilars will also lead to substantial cost-savings in the broader healthcare market. Although it remains to be seen as the biosimilar pipeline continues to mature in the U.S., it is estimated that the U.S. health care system has the potential to save up to $250 billion by 2024. These savings create resources to enable access to other innovative treatments, improving the lives of all patients.
Biosimilars were first allowed under the Biologics Price Competition and Innovation Act (BCPIA), a section of the sweeping 2010 Affordable Care Act. The BPCIA acknowledges the significance of promoting innovation, but it also provides a pathway for competition once monopoly protection ends. Biologics can acquire patent protection, which lasts for 20 years from the date the patent application is filed. The BPCIA stipulates a 12-year market exclusivity and a 4-year data exclusivity beginning when the biologic drug secures FDA marketing approval. Each exclusivity can be extended 6 months for pediatric applications. A biosimilar cannot be marketed until the 12-year exclusivity expires. These exclusivity protections are designated to stimulate biologic research and development. However, if the politically controversial Trans-Pacific Partnership between the U.S. and 11 other Asia-Pacific countries is approved, exclusivity could drop to 5 years. Stay tuned and the next few years should be exciting times for biosimilar approvals and uptake in the U.S.
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