At some point in a person’s life, they may take a medication—whether it is a one-time vaccine to prevent disease or an antibiotic to ward off infection. For some, medication can be a part of a regimen to help manage or recover from a chronic condition. Some of the most recognized and debilitating conditions, such as cancer, diabetes, hepatitis C, rheumatoid arthritis and multiple sclerosis, can be improved through the use of medicines called biologics.
Biologic medicines are created from large complex molecules derived from living cells. Although these cutting-edge technologies can be life changing, they are difficult and expensive to create. Some studies put research and development costs at $985 million to bring a single product to market. They can also be costly for patients, averaging $10,000—$30,000 per year, with some treatments now reaching millions of dollars.
Increasing access to generic equivalents is one option to alleviate prescription drug costs. In fact, the FDA reports that products with six or more generic competitors experienced a price reduction of 95%. Fostering generic competition is seen as a potential solution to lowering drug prices.
Generics are made from small molecules and are chemically synthesized as identical equivalents to the reference product. This means generic drugmakers use the exact same process as the brand-name manufacturer, and the product has the same active ingredients, strength, dosage and route of administration as the reference product. Although generics are approved by the FDA without the manufacturer conducting clinical trials, the FDA conducts a rigorous pre-approval review to ensure generics have the same quality and efficacy as the branded product. Because the active ingredients in a generic product are identical to its brand-name counterpart, it can be substituted at the pharmacy.
Though the active ingredients in generics are identical to their reference product, their inactive ingredients may differ. Inactive ingredients are used to facilitate absorption, improve stability and may alter the product’s physical taste and appearance. Variances in the inactive ingredients may cause some patients to experience an adverse reaction.
Biologics are derived from living cells, such as a microorganism, plant cell or animal cell, whose structures are complex and characteristics differ, thus making an identical copy impossible. Since the process of making a biologic drug cannot be replicated exactly, a biosimilar is created which is highly similar to the original biologic. According to the FDA, slight lot-to-lot (within-product) variations are expected during the manufacturing process for both biosimilar and biological products which are carefully controlled and monitored. Biosimilars must complete additional studies and, if needed, further clinical trials to demonstrate to the FDA that there are no clinically meaningful differences in safety and efficacy from its reference product.
Currently, over 30 biosimilars have received FDA approval for marketing in the U.S. with more expected in the years to come. However, not all biosimilars are considered interchangeable. Interchangeability is a regulatory designation unique to the U.S. that permits a pharmacist to substitute a biosimilar in place of its reference product without first obtaining permission from the prescriber. For a biosimilar to be considered interchangeable, a manufacturer must conduct additional studies and the drug must meet other FDA criteria separate from clinical trials.
Biosimilars already in use typically launched with initial list prices 15% to 35% lower than list prices of the reference products. Research shows biosimilar drugs saved nearly $8 billion in 2020 alone. As new products enter the market and increase competition, savings in 2022 is projected to reach over $30 billion.