Most people who either take prescription drugs or care for someone who does are familiar with generic drugs. These medications are supposed to be the same as the name brand medications but they are made by a different manufacturer who did not have to front all of the costs for marketing and research and development, so they are substantially cheaper. Most drugs eventually wind up with a generic equivalent when the name brand drug maker’s patent expires. But one class of drugs has, up until now, been isolated from the generic market. That era, however, appears to be at an end.
FDA Panel Approves Generic Version of Biologic Drug
The Food and Drug Administration (FDA) is the agency responsible for approving generic drugs. CNBC reports that a panel of the agency has unanimously voted to support the approval of Novartis AG’s copy of Amgen’s cancer drug Neupogen. Neupogen is an injectable biologic that prevents infections in breast cancer patients who are undergoing chemotherapy. Biologics are drugs made from living cells rather than being made from chemicals. A biosimilar is a biopharmaceutical drug designed to have active properties similar to one that has previously been licensed. While the panel’s recommendation is not binding on the ultimate agency decision, it is rare for the agency to not follow the panel’s recommendations.
Biologics Had Previously Been Isolated from the Generic Market
The New York Times reports that biologics have been isolated from the generic market for years. If the FDA follows the panel’s recommendation in this case, and continues down this road, drug prices could drop off significantly. Biologics are some of the most expensive drugs and they make up about one third of the drugs on the market. Examples include “Remicade, Humira and Enbrel for autoimmune disease, and Herceptin, Rituxan and Avastin for cancer.” Avastain can cost more than $50,000. According to the New York Times report, just this one generic biologic alone could save Express Scripts, the country’s largest prescription drug benefit manager, $5.7 billion in drug costs in just ten years.
Biologic drugs were invented in the 1980s. At that time the technology simply was not there to easily make generic copies of the drugs, so up until now manufacturers of these drugs have not had to worry about generic competition. This has allowed them to set extremely high prices. Now, however, the technology exists and generic drug manufacturers are seizing it. These generic biosimilars will be on average about 1/3 cheaper than the brand-name drugs, but in some cases they could be as much as 90% cheaper.
FDA Not Allowed to Consider Price
An interesting note is that the FDA is not allowed to consider the price of a drug when deciding whether it should be approved. Instead it is supposed to consider the safety and effectiveness of the drug. So the massive cost savings to the American people is not allowed to play a role in the FDA’s decision making process.
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