New England Journal of Medicine (05/06/15) Sarpatwari, Ameet; Avorn, Jerry; Kesselheim, Aaron S.

The Food and Drug Administration (FDA) in March approved Sandoz's filgrastim-sndz (Zarxio), making it the first product in the United States authorized through a new regulatory pathway for follow-on biologics. Biologics account for less than 1 percent of all U.S. prescriptions, but 28 percent of prescription-drug spending, and costs are expected to increase significantly. Generic versions of small-molecule drugs can reduce prices by 90 percent, but savings for biologic drugs are limited because they are more complex and harder to produce, write researchers from Brigham and Women's Hospital and Harvard Medical School. The Biologics Price Competition and Innovation Act (BPCIA) provides a pathway that permits approval of follow-on biologics based on evidence of structural similarity. Vigorous post-approval surveillance of biologics will be a major challenge in the future. Savings from follow-on biologics also may be less than expected due to hurdles such as the potentially costly and convoluted patent-dispute resolution process under BPCIA. U.S. postapproval factors could hinder uptake of follow-on biologics, as naming practices for biosimilars are not set. Challenges to achieving savings from follow-on biologics can be addressed, the authors write, and market-entry barriers should be low enough to ensure competition and affect prices. Public investment in technological advances to support biosimilar development can help manufacturers. FDA can promote guidance on how companies can demonstrate biosimilarity or interchangeability. Appropriate periods of exclusivity will reward innovators of the original products and encourage them to create new products.

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