Little-Known Provision of the Affordable Care Act Is About to Pay Major Dividends for U.S. Consumers

06/03/2015 11:31 am ET | Updated Jun 03, 2016

It's no secret that health care costs are on the rise, and have been for years. From monthly premiums to co-pays and now coinsurance for prescription drugs, consumers are being squeezed financially as a result of trying to keep their families healthy.

A relatively new factor in this cost-versus-care debate are biologic drugs, complex medicines made from living cells that treat deadly and debilitating diseases. Doctors are increasingly prescribing them to treat everything from cancer to rheumatoid arthritis to multiple sclerosis.

Their high price tag, though, is a barrier for some of the patients that need these treatments the most. That's why the expected entry into the U.S. marketplace in the coming weeks of the first biosimilar, essentially a copycat version of a biologic drug, could be a watershed moment for health care consumers.

The first biosimilar was approved by the Food and Drug Administration (FDA) in March and is the biosimilar for Neupogen, which reduces the risk of infection from chemotherapy for cancer patients. Neupogen is a costly drug; the retail cost of a month's worth of treatment runs approximately $3,500. While estimates of cost savings from biosimilars range from 10 to 50 percent, even a 10 percent savings on Neupogen would be significant for the health care system and patients managing their health care expenses. With the median family household income in America at about $54,000 last year, such a savings would be welcome news for the average American consumer.

The Affordable Care Act established a pathway for biosimilars to be sold in the United States, and the FDA was tasked with implementing the rules of the road. This entry of the first drug is historic in the tradition of the Hatch-Waxman Act passed in 1984, which paved the way for generic medicines in America. That truly revolutionary law has brought massive savings of about 75 percent for prescription and over-the-counter drugs that people use every day. As the FDA continues to consider a permanent biosimilars pathway, rather than its ad hoc approach to date, consumers and patient advocates are watching the fine print closely.

Biosimilars have been available since 2006 in Europe, where a system is in place to ensure minimum confusion. The Europeans utilize consistent International Nonproprietary Names (INNs) for biosimilars, as do Health Canada and the World Health Organization. This allows drugs to be referenced by their generic names (acetaminophen) rather than their brand names (Tylenol®). If American consumers are going to get the full benefit of biosimilars competition, it's important that the FDA take a position on naming that is consistent with the rest of the world. Deviation from this system, one with a proven track record of safety used by the WHO and the EU, would only cause greater confusion for both innovative producers and patients.

For sick Americans, the introduction of biosimilars could be a game changer. With biosimilar versions, some patients could save as much as $800 per month in co-pays. For their counterparts living in Europe, multiple biosimilars options are already available at significant cost savings.

The National Consumers League has a long history of advocating for access for to lifesaving medicines, a core component of healthy communities. In fact, more than a century ago, our early leaders helped establish the Pure Food and Drug Act of 1906, which led to the creation of the FDA and ensured that American had access to medications that were both safe and effective. Such tremendous health care advances today should be available to every American without breaking the bank. Biosimilars hold great potential for saving consumers money and increasing their access to lifesaving treatments. Cancer patients receiving chemotherapy would be the first to benefit from the cost savings. How can we say no?

It's up to the FDA to ensure that this potential is maximized with regulations that ensure fair competition and promote cost savings. American consumers are depending on it.