How to Approve 'Biosimilar' Drugs? The FDA Has to Figure That Out

drug research
drug research

The U.S. Food and Drug Administration is holding a two-day public hearing to start the process of creating an abbreviated approval procedure for so-called biosimilar and interchangeable biological products. While most agree the process could take years, the end outcome could affect many, from investors to companies to patients.

Unlike generic drugs, which are the exact chemical copies of a brand-name drug, biosimilars aren't identical to the branded medications because biological drugs are large and often complex proteins that are made in living cells. And tiny differences can produce very different reactions in a patient. As a result, the regulatory process for approving biosimilars is more complicated and even requires human clinical trials.

But as part of the health care reform, the FDA was mandated to create an abbreviated approval pathway for biosimilars. While the objectives are the same as for generics -- to create access to cheaper drugs, thus reducing the financial burden on patients and the system -- the challenges are greater. Mainly, the FDA will have to decide how to ensure that biosimilars match brand-name treatments in both safety and efficacy.

Proceed With Caution

Representatives of pharmacy groups, academics and doctors, as well as generic and brand-name drug companies presented to the panel. Among the companies were the largest independent biotech in the world Amgen (AMGN), Roche, Pfizer (PFE), Johnson & Johnson (JNJ) and the world's biggest generic-drug maker Teva (TEVA). So far, they haven't even agreed on how biosimilars should be named, let alone how to ensure the same safety and effectiveness as branded drugs. But it seems that at least everybody agrees the FDA should proceed with caution.

Several presenters, including Hospira (HSP), which currently markets two biosimilars in Europe, said that perhaps the FDA should approach this on a case-be-case basis and allow extrapolating safety and efficacy data. Teva added that unnecessary clinical trials raise ethical concerns. Of course, brand-name companies said such extrapolation could be dangerous and that new clinical trials would be needed.

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Many urged the FDA to improve access to these highly expensive products, which treat a range of diseases such as cancer and multiple sclerosis. They're also among the most expensive drugs, easily reaching tens of thousands of dollars a year per patient. But while generic chemical drugs cost a fraction of brand-name drugs, biosimilar prices have dipped just 15% to 30% in the European Union, which has had a specially adapted approval procedure for certain biologicals since 2006, and in other countries where they've been sold for years.

Still, there is a strong case to be made for a biologics market. Pfizer, Merck (MRK) and others are investing in the field, promising copycats within a few years, to the dismay of Amgen and Roche. Last year, biotechs were a $134 billion market, of which biosimilars' share reached just $235 million with sales in Europe, Japan, Canada and Australia, but not in the U.S., the largest potential market. Once the U.S. has a process in place, it could open a market worth $10 billion in the next decade, according to IMS Health.

The FDA has no deadline for coming up with its own approval pathways. But even when a system is in place, Reuters reports, experts say it could take at least five years for new biosimilars to emerge.

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