Recently, Phil DeLuca, a retired Long Island Railroad worker, was profiled on a national news television program. Suffering from a potentially fatal red blood cell deficiency, he receives a weekly shot of Procrit. Simple enough, but that shot costs a staggering $1,500, of which his co-pay is $196. That amounts to slightly under $800 a month, a hardship on the retiree but a price he has to pay. Why is the drug so expensive? Two main factors -- corporate avarice and government inaction.
Since 1984, Americans have come to rely on generic drugs, comparable but cheaper -- often much cheaper -- versions of brand-name drugs that, once the brand-names' patents have expired, can be produced by any manufacturer, not just the company that created it, usually one of the Big Pharmaceuticals. Every year, millions of consumers save billions of dollars buying generic drugs.
Since they are both made from chemicals, a generic drug contains the same ingredients as its brand-name version, so they are considered "identical." But the hottest new drugs in pharmaceutical manufacturing today are those that are made from living organisms, not chemicals. Known as biologics, they are created through a biological process and consist of proteins, nucleic acids, sugars, or a mixture of the three.
Procrit, the drug keeping Phil DeLuca alive, is a biologic, as are drugs like Humira, used to combat arthritis, and Avastin, used in cancer treatment. Biologics are effective, but they are expensive. It is not unusual for a biologic to command an annual cost to a patient of between $25,000 and $200,000. Many patients need to take the drug for long periods of time, if not indefinitely.
Biologics represent the fastest growing sector of the drug market in the United States and Europe -- a multibillion industry so vibrant that in 2012 seven out of 10 of the top-selling drugs worldwide were biologics. Currently, biologics account for one fourth of the $320 billion Americans spend annually on drugs. And while sales of many conventional drugs are dropping biotech drugs are expected to increase their market share in the future.
These high prices have presented an opportunity for companies to produce generic-type equivalents of biologic drugs. Creating a replica of a chemical-based drug is simple, but recreating a biologic drug is more challenging. Made from living organisms as well, the cheaper equivalent of a biologic cannot be considered identical but "similar," the reason this new class of lower-priced drugs is called biosimilars.
In 2005, biosimilars were approved for use in Europe. Other countries followed suit, including Japan in 2009 and South Korea in 2010. Much of the rest of the world may be embracing biosimilars, but the United States has not -- for one reason. The Food and Drug Administration, an agency defined by its turgid bureaucracy and institutional cautiousness, has refused to approve their use.
Other parts of the government have attempted to prod the FDA along. In March 2010, to facilitate an "abbreviated regulatory pathway," Congress passed and President Obama signed the Biosimilar Act as part of the Patient Protection and Affordable Care Act -- Obamacare. The bill's purpose was to speed up the process by which biosimilars could reach the public. So far, the FDA has approved no biosimilar.
Indeed, the FDA has not adopted a definitive timeline to consider the drugs nor has it made clear, even though it has requested new data, what regulations are going to have to be met for approval. Because of this air of uncertainty, manufacturers have been reluctant to submit biosimilars. Even more disconcerting, the major drug companies -- to protect corporate profits -- have put up roadblocks to keep the FDA from moving ahead.
For example, all drugs are assigned an International Nonproprietary Name (INN). To create delay, the Big Pharmaceuticals are asking the FDA to require that a biosimilar receive a name different than that of the brand name on which it is based. This would require a whole new naming system, which would take years to develop. "The issue of interchangeability," according to one source, "is not an issue of nomenclature." It is merely intended to slow down the process by which biosimilars can reach market.
The drug companies argue that allowing a biologic and its biosimilar to share the same name would pose a safety threat to patients. In fact, the opposite is true, according to a letter written to the FDA by 32 pharmacy and insurance organizations. "Requiring different INNs...could lead to patient and prescriber confusion, increasing the possibility of medication errors," the letter read, "and would also effectively separate the biosimilar from existing safety information about the underlying [biologic]."
A bipartisan group of U. S. senators have weighed in. "The name that will be given to the active ingredient for these biosimilar medications -- a drug's [INN] -- has significant implications for both patients and providers," stated a letter signed by senators Jay Rockefeller, John McCain, Charles Schumer, Tom Harkin, Bill Nelson, and Roy Wyden. "If biosimilars are unable to share the same active ingredient name as the brand originator product, we believe the Congressional intent behind the [biologic bill included in Obamacare] would be undermined as would the safety and accessibility of affordable biosimilars."
So far, the FDA has done nothing, ignoring the letter written by a notable Senate coalition. In the meantime, patients like Phil DeLuca, whose life depends on affordable medications, continue to wait.