The Food and Drugs Administration has moved to address increased concerns over the costs of cancer treatments by approving biosimilar drug, Zarxio, produced by Novartis Sandoz. The move by the agency moves to curtail a long running monopoly by some biotechnology companies, which have manufactured and sold expensive, complex medicines that have fewer less-expensive alternatives.
Zarxio is a drug that its developers hope will assist patients in forming white blood cells in cancer therapy. The drug should act as a substitute for the most costly treatments that usually leave a hole in cancer patient’s pockets. Some people are however arguing that it is a copy of an existing medication called Neupogen or Filgrastim that was approved in Europe as Zarxio in 2009.
Amgen’s Neupogen generated $1.2 billion in sales last year as a therapy for increasing cancer patient’s white blood cells and fight infections. The drug is part of an exclusive class of drugs called biologics that have never faced any generic competition. Biosimilars are not expected to cut the prices of drugs by 80% like other generic drugs but should go a long way in ensuring prices go down by between 10-50%.
Neupogen remains underused in the U.S. because of its price, which is expected to provide Zarxio with a clear opportunity to access a huge marketplace that has been yearning for affordable alternatives. A report by Rand Corp notes that biosimilars like Zarxio have the potential of saving up to $44 billion over a decade.
The approval is of importance as it opens the door for a class of new drugs that are cheaper because of increased competition. Biosimilars cost almost of a third of brand-name biologics on average. The Wall Street Journal reports that companies are pushing for the approval of 50 biosimilars for 15 different drugs. There is a belief in the industry that biosimilars may end up accounting for 70% of U.S prescriptions.