Approval of Zarxio by FDA: Avenue for less expensive treatment options in expensive healthcare market

Zarxio is the first biosimilar by Sandoz biopharmaceuticals to be approved in USA [1] and naming conventions for biosimilars are likely to follow shortly afterwards. This marks the country’s catchup with Europe, where biosimilars have already been in the market for years. Zarxio is analogous to Amgen’s Neupogen and acts by decreasing rates of infection in chemotherapy receiving patients with nonmyeloid malignancies. Some patients and medical experts have voiced their concerns for Biologics as they are genetically engineered substances mimicking a certain type of drug and may be dangerous or have low quality. One impediment might be that Zarxio is not purely generic i-e biosimilar but not interchangeable and cannot be substituted for Nupogen without physician’s approval. The FDA briefing document however, states that the drug carries no meaningful differences to its reference counterpart and meets the required conditions of safety, purity and potency (http://www.fda.gov/downloads/ForConsumers/ConsumerUpdates/UCM436715.pdf). Regulatory concepts such as “biosimilar,” “highly similar” and “no clinically meaningful differences” are new and vulnerable to different elucidations and interpretations by the targeted general public, sales forces and physicians. The authorization, however, guarantees versatility in the drugs but also public felicitation due to a huge reduction in prices.

The approval of Zarxio is basically an upshot of the Biologics Price Competition and Innovation Act 2010. Congressional budget prophets also purported that biosimilar drugs could benefit federal government and the consumers by incentivizing market competition and saving a great deal of money. This poses a serious threat to Amgen which spawned a revenue of $1.2 billion by the reference drug Nupogen [2] in 2014 alone (http://www.fiercepharma.com/story/judge-says-novartis-can-launch-biosimilar-amgens-neupogen/2015-03-20). Amgen filed lawsuit against Sandoz for patent infringement and unfair competition. District court has ruled out Amgen’s motion for prevention of Zarxio’s marketing (http://www.natlawreview.com/article/district-court-rules-against-amgen-s-motion-preliminary-injunction-to-prevent-market) and the commercialization of Zarxio is anticipated to remove Neupogen’s hit standing in a couple of years. Initially, it was speculated that biosimilars will be sold 40-50% cheaper than costs of original reference products in USA. However, presumed the complications of bringing biosimilar drugs to market, several analysts have stated apprehensions that the actual savings to US customers could be considerably lower than expected. According to Andre Mulchay, it costs almost $300 for a single injection by Neupogen and Zarxio could benefit the public by provision of a 35% discount ($105 per injection) (http://www.modernhealthcare.com/article/20150107/NEWS/301079947). According to Express Scripts, its availability in the U.S. market could save $5.7 billion in drug costs over the next 10 years (http://www.allgov.com/news/where-is-the-money-going/fda-opens-door-to-less-expensive-drugs-150320?news=856011). Sandoz, however, has not specified the market price for Zarxio yet and currently staying off the market, probably due to patent battle with Amgen. European Union’s substantial market of biosimilars could be used for conjecturing monetary benefits for USA but degree of biosimilar market astuteness varies substantially across the European Union, owing to differences in payer systems and policies, laws related to drug substitution, and the overall size of the generics market within each country. Average price discount is around 25% (http://healthaffairs.org/healthpolicybriefs/brief_pdfs/healthpolicybrief_100.pdf). Environment for biosimilars is more complicated and legally challenging in USA than in other countries and US federal and state regulatory, pricing, and reimbursement policies will play a key role in determining future cost savings.
The approval, however, marks the dawn of a new era in treatment and setting up of glorious pathway for biosimilar centered small companies like Epirus, Coherus Biosciences and Pfenex. They are now, ready to step in after Sandoz and their share prices have already boosted after the word got out for approval of Zarxio.


References

1. Burki, Talha Khan. (2015). First biosimilar drug approved in the USA. The Lancet Oncol.
2. Senior, M. (2015). First US biosimilar edges towards market. Nat. Biotechnol., 33(3): 222-223.