Once patents expire on a drug there have traditionally been major decreases in drug prices following the arrival of generics. This has been of major importance for the budgets of healthcare payers. However, a major challenge is to be expected in the coming years related to biologicals. Many new cancer drugs are biologicals, and, due to their complexity, only biologically ‘similar’ (not identical) agents can be produced following patent expiration.

Regulatory agencies have required that such biosimilars go through basic testing to demonstrate pharmacological equivalency, however, stringent clinical trials are not required. Despite this, however, the cost of development of such biosimilars is considered to be higher than the development of generics. It has been estimated that it takes up to eight years to bring a biosimilar to market and development costs are around US$100–US$150 million (50 times that to launch a conventional generic drug) [2].

As a result, the drug price reductions at patent expiration are not expected to be significantly less than those for generics, this may also be simply due to a lack of significant competition. Due to the complexity of producing biologicals, entry into the biosimilars market may be limited to a few specialist companies with the means to invest heavily and to fend off a legal onslaught [2].

Generics prices have traditionally fallen to around 10% of their original price. However, biosimilars prices are projected initially to fall only to approximately 80%. This is evidenced by the launches of the first two biosimilars in the US, Zarxio (filgrastim-sndz) and Inflectra (infliximab-dyyb), which have both been launched at a 15% discount to their respective originator products [3].

As a result, the authors expect that ‘drug budgets may face significant challenges in the future’.

Conflict of interest
The authors of the research paper [1] declared that there were no conflicts of interest.

Editor’s comment
Readers interested to learn more about how biosimilars can help to reduce healthcare costs are invited to visit www.gabi-journal.net to view the following manuscripts published in GaBI Journal:

Reducing healthcare costs and building trust in biosimilar medicines

Oncologists urged to embrace biosimilars to help control spiralling costs of cancer care

GaBI Journal is indexed in Embase, Scopus, Thomson Reuters’ ESCI, and more.

Readers interested in contributing a research or perspective paper to GaBI Journal – an independent, peer reviewed academic journal platform – please send us your submission here.

Related articles
Saving money and building trust in biosimilars

Healthcare alliance proposes ways to reduce drug costs in the US

References
1. Goldstein DA, Stemmer SM, Gordon N. The cost and value of cancer drugs – are new innovations outpacing our ability to pay? Isr J Health Policy Res. 2016;5:40.
2. GaBI Online - Generics and Biosimilars Initiative. Hurdles to entering the biosimilars’ market [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2016 Dec 2]. Available from: www.gabionline.net/Biosimilars/General/Hurdles-to-entering-the-biosimilars-market
3. GaBI Online - Generics and Biosimilars Initiative. Pfizer to launch infliximab biosimilar Inflectra in US [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2016 Dec 2]. Available from: www.gabionline.net/Biosimilars/News/Pfizer-to-launch-infliximab-biosimilar-Inflectra-in-US

Permission granted to reproduce for personal and non-commercial use only. All other reproduction, copy or reprinting of all or part of any ‘Content’ found on this website is strictly prohibited without the prior consent of the publisher. Contact the publisher to obtain permission before redistributing.

Copyright – Unless otherwise stated all contents of this website are © 2016 Pro Pharma Communications International. All Rights Reserved.