How Does the Recent FDA Approval of a Biosimilar Affect People with Diabetes?

Earlier this month, the FDA approved the first so-called biosimilar for the U.S. market. What is a biosimilar and how does this approval affect people with diabetes?

Health and patient advocates and drug companies big and small have eagerly awaited the FDA's recent approval of the biosimilar Zarxio (filgrastim-sndz).

What is a Biosimilar?

When a drug company is the first company to bring a non-biologic Drug A to the market, that drug is sold as the brand name drug. When this happens, the drug tends to be pretty expensive for several years as it enjoys market exclusivity thanks to the patent protecting it. When that patent runs out, other drug companies formulate generic copies of Drug A and sell them at a much lower price. FDA standards require that generic drug to be an exact copy of Drug A.

Those drugs are different from biologics. A biologic drug is a medicine that comes from living organisms. Those organisms include humans and animals as well as microorganisms like yeast and bacteria.

Until a couple of weeks ago, the U.S. Food and Drug Administration had never approved the generic equivalent of a biologic drug for the U.S. market.

It is impossible to make a perfect copy of a biologic drug. So what regulatory agencies around the world have settled on is the biosimilar drug. Biosimilars are not precise copies, but they must be found to be close enough as to have the same mechanism of action and therefore work in functionally the very same manner as the biologic they are created after.

Like their generic cousins, biosimilars undercut the price of the biologics they are based upon and lower costs for patients. How much lower remains to be seen. The biosimilar Zarxio is based on the white blood cell booster Neupogen, which is given to cancer patients whose white blood cells may be depleted from chemotherapy and who may therefore be at risk of life-threatening infections.

A single Neupogen injection costs around $350. We haven't learned yet how much a single Zarxio injection in the U.S. will cost, but Zarxio has been on the European market for some time, where it sells for about 80 percent the price of a Neupogen injection. Assuming for the moment that that does not change, the difference is $280 vs. $350 – not really the kind of savings that get people dreaming of vacations, especially when generic drugs often sell for just 10 percent of the drugs they copy.

It seems unlikely that biosimilars will ever be undercutting biologics by 90 percent, but it's a bad idea to underestimate the power of a competitive marketplace. Right now the technology to manufacture biosimilars is costly, but advancements will in time bring it down.

What Does This Mean for People with Diabetes?

Most people aren't familiar with biologic drugs, much less having been given one, but this is not the case for people with diabetes who take insulin.

People have been receiving insulin for diabetes at least since the 1920s when Toronto researchers extracted insulin from cattle and carried out a clinical trial by giving it to people with diabetes. Dramatic and life-changing results followed. For the next 50 years, people with diabetes were receiving insulin made from several different animals.

The arrival of recombinant DNA technology in the 1970s rang the death knoll for animal-derived insulin. Scientists could now take the human gene responsible for insulin, put it into bacteria and manufacture a whole lot of highly effective insulin hormone.

Modifications to the technology have improved insulin even further since then, but the insulin diabetics take today is fundamentally the same as what was being produced 40 years ago. And it remains expensive.

Unbeknownst to many people with diabetes in the United States, their disease can be controlled much more effectively with animal-derived insulin than it is with what is available to them on the U.S. market (where older versions of insulin are not available).

The arrival of Zarxio does offer the potential for people with diabetes to one day soon start to see a savings on their monthly insulin costs, and that savings could be fairly substantial. The biggest hurdle in getting anything novel past the FDA to market is the absence of an established regulatory pathway. Companies that are making therapeutic vaccines for cancer have been learning this for the past 20 years, but finally, with the approval of Provenge for prostate cancer – as disappointing a treatment as it actually is – there is at least an established pathway for others to follow.

Zarxio cuts a similar path. Companies hoping to create biosimilar versions of insulin now have some idea of what the FDA wants to see in a biosimilar drug. Will biosimilar versions of Humulin be all that less expensive than that drug, which costs around $400 every month?

If the biosimilar only saved the patient 20 percent, that's still a savings of $80 per month. To put it in more attractive figures – almost $1,000 per year.