At Pfenex, we’re focused on the development of biosimilars, drugs similar to generics, but different in the sense that they are produced from a living organism. Despite this difference, there are similarities and trends we see in the generics market that we can anticipate for biosimilars – notably the tremendous impact that generics have had on lowering cost and increasing patient access.
High drug costs are nothing new. In fact, the prices of brand-name drugs have almost doubled since 2008, according to a 2014 Express Script Drug Trends report. Conversely, generic drugs continue to see prices fall, with the second quarter of 2015 seeing a price decline for nearly 44 percent of generics, as reported by an August 2015 Drug Channels blog post. These trends speak for themselves – generic drugs are part of an effective long-term solution to the rising costs of healthcare.
This week, the Generic Pharmaceutical Association (GPhA) released its 7th Annual Generic Drug Savings in the United Sates report, compiled by the Institute for Healthcare Informatics (IMS), which revealed that the use of generics has saved the United States’ healthcare system a record-breaking $254 billion in 2014, bringing total savings over the past decade to an impressive $1.68 trillion.
These savings can be further realized with the maturation of the US biosimilars market. According to the FDA, biosimilars have no clinically meaningful difference from their reference product. A robust biosimilar market would give American patients greater access to biologic products that can be life-changing for many people with chronic conditions. It is also worth noting that in countries with such markets, biosimilars have historically cost 20 to 30 percent less than their reference products, a trend that is likely to replicate once the US biosimilars market reaches its full potential.
But, as with most markets, in order to maintain low prices, there needs to be an increase in competition. It’s important that policymakers encourage a regulatory environment that ensures a market that enables competition between biosimilars and the branded counterpart. It is not enough to create competition between biosimilars alone.
In order to recognize the full potential of biosimilars in the US, including lower prices and increased access, it is critical that the FDA and other regulatory bodies implement policies to increase competition, while urging regulators to consider policies, such as a naming system and interchangeability guidelines, that will create a thriving, competitive biosimilars market.