In 2010 the Public Health Service Act (PHS Act) was modified in the U.S. to create the Patient Protection and Affordable Care Act (Affordable Care Act) in order to facilitate a potentially quicker route to licensing through the FDA for biological products that have been presented as ‘biosimilars’.

A ’biosimilar’ is defined as a biological compound that is highly similar to a product that is already approved but manufactured by a different company. The biosimilar creates a pharmacological response that is clinically the same as the original ‘reference’ product in terms of safety and effectiveness and is only very slightly different in molecular structure to the original compound.

The Affordable Care Act of 2010 created an approval pathway for biosimilars known as the Biologics Price Competition and Innovation Act (BPCI Act), which in very simple terms means that if a biological compound can demonstrate comparable data to an already FDA-licenced product it will be accepted as a ‘biosimilar’ through an abbreviated route. In a similar vein ‘Interchangeable’ biological products are also ‘biosimilars’ however interchangeables must achieve additional criteria for matching the reference product, and achieving this ‘matchability’ means that a pharmacist may dispense an interchangeable without first seeking the approval of the medical practitioner. The BPCI Act has potentially created a low traffic, fast flowing free-way to FDA approval for biosimilars in order to increase competition in the market place and enhance affordability.

But why is this so important? Biologics are difficult products to make—they are generally larger molecules than manufactured drugs, can be antibodies and generally made by living organisms unlike synthesized drugs, which are chemically much smaller and much easier to copy. For this reason it is more difficult to ‘create’ copy-cat biologics with similar molecular structures. Due to the processes that it takes to nurture and then research these treatments by very nature of the development pathway are expensive to use. Although there are many biological treatments available in the U.S. and worldwide, often the cost implications simply take them out of the patient care pathway, and so too, the BPCI Act.

In Europe biosimilars have been available for almost a decade following their approval by the European Medicines Agency (EMA) in 2005 and 2006 via an abbreviated registration process. During that time 21 molecules have been approved, of which 19 are still marketed (2 have since been withdrawn) and they have driven down the cost of biologics by 20-30% and ultimately made the drugs more available to patients. In general a modicum of protection is afforded to the company that has developed the ‘reference’ molecule in a similar manner to patent protection, whereby they have a period of  ‘data exclusivity’ that lasts for a period of at least 10 years before a biosimilar may be manufactured by another company. By introducing the BPCI Act it was hoped that competition would drive down the cost of treatments in the U.S.

It has taken almost 5 years, but in March 2015 the first biosimilar has been approved by the FDA for use in the U.S. through the abbreviated registration pathway. Sandoz, a Novartis owned company reported recently that Zarxio™ (filgrastim-sndz) has been approved for use for all the indications of its’ reference product (Neupogen manufactured by Amgen) for treatment of neutropenia, which is currently licenced in the U.S. This is a landmark decision in bringing biosimilars to market in the U.S., and clinicians believe that filgrastim has been underused up until now for various reasons including price. Introducing a direct competitor to the reference product certainly has the potential to push the price of the drug down and benefit a group of patients particularly at risk of developing neutropenia. Could this mark the beginning of a price competition war in the U.S. for a whole new category of treatment therapies? And what are the pros and cons?

Biosimilars are not the same as generics. A generic drug is an identical copy of a currently licenced pharmaceutical product that has an expired patent protection and must contain the ‘same active ingredients as the original formulation’. A biosimilar is a different biological product with a similar but not identical structure that elicits a similar clinical response.

Following on the approval of the Novartis biosimilar, the U.S. may be set for an onslaught of approval for many of the drugs that are currently available in Europe and other parts of the world, but there must be questions over regulations. When do they become interchangables? And what about the naming issues? Currently all biosimilars are named the same as the reference product, with the manufacturers name attached to it, but yet it is a different biological entity. There are currently no guidelines from the FDA as to biosimilar names, and in the case of Novartis they are currently arguing that Zarxio should be named as filgrastim so as not to introduce doubt of therapeutic value into the mind of the prescriber, and yet it is only similar to fligrastim not a biological copy.

As of today, Apotex, Hospira, and Celltrion all have applications sitting with the FDA for biosimilars awaiting approval, and in the interim Novartis is currently working on five other biosimilars—it’s a huge market potential. Surely it will introduce an amount of competition into the market but does it also introduce risk? Or do we just accept that the evidence that is presented illustrates equivalence and indeed therefore all biosimilars should be treated as interchangeables, effectively introducing generic competition?

On the up side, the price of biologicals will definitely be forced down. They may not cause the bottom to fall out of the market, but a report published by Rand Corp. in 2014 does suggest that biosimilars could afford a saving of $44 million over the period of a decade, effectively decreasing the cost of the products by between 10 and 50%, although as the landscape for biosimilars is different to that of generics it is very difficult to predict. This should however open up prescribing options for patients with difficult to manage and potentially life threatening conditions.

Out of the 21 biosimilars that have been approved in Europe, two have since been withdrawn… it’s difficult to find out why. As the biosimilars start to filter through in the U.S. the usage will obviously increase exponentially and new challenges with regards to regulation and therapeutic value are sure to emerge, never mind the legal challenges from bio-development companies trying to protect their territory. It’s an area of intense discussion within the Pharma world and only time will tell the full financial implications and regulatory ramifications of these new biopharmaceuticals.