Biologic drugs are used to treat a number of serious, life threatening diseases and save countless lives. They are, however, exceedingly expensive. The average daily cost of a biological in the U.S. ($45) dwarfs that of chemical drugs ($2). Annually, some of these drugs can cost patients as much as $400,000. The question becomes “how do we make these treatments more sustainable?” The short answer to that question centers around biosimilars as one study estimates they have the potential to save north of $250 billion from 2014 to 2024.
The long answer to that question, however, is not as straight forward. Manufacturers of biological drugs can continue to charge monopoly prices as long as those drugs remain under patent protection. Even as these medications begin to come off patent, many over the next few years, the road for biosimilars to enter the market is not exactly paved. While many other countries (Australia, Canada, and the EU specifically) have had a market for biosimilars since 2006, the US policy for entry of these drugs remains ambiguous.
A big part of this delay can be attributed to the FDA’s lack of progress in establishing guidelines for the approval of biosimilars. Although they did accept their first biosimilar application last week, there still lacks a definitive set of regulations. Tentative guidelines had been provided both in 2012 and 2014 but a final set is still in progress.
This uncertainty in the regulatory process has caused apprehension among many drug companies and left fewer players vying for a place in the market. Said one pharmaceutical executive, “I would like absolute clarity before we make a large investment. The quality of the decision is worth more than speed.”
While the FDA wavers in putting a process in place, biologics manufacturers have engaged in stall tactics. The longer biosimilar drugs stay off the market, the longer these companies can continue to enjoy massive profits—reportedly as much as $100 million a month for some drugs. The latest strategy employed involves disputing the naming system to be put into place for these drugs. Biologics manufacturers have lobbied to maintain separate names, and the equity that goes with those names, from competing biosimilars.
While this dispute carries on, patients are missing out on billions of dollars in savings. Many have called for the FDA to re-calibrate their priorities and fast track a set of guidelines that would allow biosimilars to hit the market sooner. Other countries have had regulations in place for almost eight years while we wait for officials to perfect ours. Until then, drug companies will continue to pad their pockets with massive profits from these drugs.
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