FDA Panel Supports Novartis Version of Amgen Arthritis Drug

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By unanimous FDA panel vote, Novartis AG’s (Basel CHE) Enbrel (etanercept) biosimilar was approved across all of its U.S. licenses.

The panel, which gives nonbinding advice to the agency, voted 20-0 that its biosimilar of etanercept, known as GP201, should be approved in all 5 indications of Amgen Inc.’s (Thousand Oaks CA) original drug, which includes rheumatoid arthritis and psoriatic psoriasis.

“We are encouraged by [the] favorable advisory committee recommendation for our proposed biosimilar etanercept,” said Mark McCamish, head of global biopharmaceutical development at Sandoz, Novartis’s biosimilars unit.

The original drug made $5.3 billion in 2015 for Amgen, up 14% for the year and its biggest seller. The two have history given that Novartis was the first company to gain a U.S. approval for a biosimilar–for Amgen’s chemotherapy side effects drug Neupogen (filgrastim).

Neupogen garnered $1.04 billion last year, down 9% year-on-year, coming after the FDA approval for Novartis’s Zarxio (filgrastim-sndz). The drug was launched last fall at a 15% discount to the original. Novartis closed the week off 1% at $81.61, while Amgen rose 1% to $163.28.

This comes a day after Amgen was also given a unanimous yes from another FDA panel for its biosimilar of AbbVie Inc.’s (North Chicago) Humira (adalimumab)–the biggest-selling drug in the world with $14 billion in sales from last year.

An ongoing patent battle between Amgen and AbbVie, however, could see the launch of the drug delayed by years. The FDA is set to make a final decision on approval by Sept. 25.

Ironically, it’s a similar situation for Amgen and Novartis, with the former also trying to block Novartis from launching GP201. At least 11 other biosimilar versions of Enbrel are currently in the development pipeline, while European regulators have already cleared Samsung Bioepis’s version and are also currently reviewing Novartis’s drug.

Steve’s Take: Biosimilars are lower-cost, “highly similar” versions of expensive biologic drugs. Biologics are made through genetic engineering and are manufactured in living cells.

The skyrocketing cost of biologic drugs is gaining much-deserved attention because it is a huge contributor to recent increases in overall drug spending. Many of the treatments cost tens of thousands of dollars or more for single course of therapy.

Spending on biologic drugs nearly doubled in the past five years, to $128.7 billion in 2015, and accounted for 54% of the increase in prescription-drug spending overall since 2010, according to IMS Health, a prescription-drug data and consulting firm. Biosimilars are not the same as generics, which have simpler chemical structures and are considered to be “identical” to their reference medicines.

It was initially thought that, like generics, biosimilars would be cheaper than their reference biologics because their manufacturers would get the benefit of using the innovator’s research data.

But biologic drugs, because they are more difficult and expensive to make than traditional chemical-based pills, makes the manufacturers of biosimilars unwilling to sharply reduce prices below the original branded medicines.

Rival versions of biologic drugs are just starting to be released but the biggest discount seen so far has been the launch last fall of Novartis’s biosimilar of Amgen’s Enbrel at a 15% discount to the original.

And of course everyone is suing everyone in order to generate as much revenue as possible before eventually and finally losing patent protection. The manufacturing costs of biologics and biosimilars contribute greatly to their high price to us patients, our health insurers and drug-benefit managers. But this is compounded by all of the patent litigation.

I occasionally use Rhinocort nasal spray for symptoms of common allergies. The cost of the original branded version from AstraZeneca was about $150 for a 0.285 fluid ounce bottle– about 120 sprays. When the first OTC version hit last year it cost about $113.

But then AstraZeneca began flooding the pharmacy shelves with its original brand, complete with identical packaging and labeling. In other words, it was the exact same medicine I have been using for years. What was the cost? About $20. How did I feel? Like I just put $130 in my pocket. Am I going to mess with a knock-off? Not a chance.

Where biosimilars are concerned, the manufacturers of the original biologic drugs about to go off patent would be better served to follow the example of AstraZeneca. Instead of raising prices sky high before competition arrives and then try to keep the prices as high as they can for as long as they can, they should discount their drugs and rely on the market’s preference for the “branded” version to thwart and perhaps even drive off competition, particularly given how expensive a biosimilar is to make.

It seems to me that all of us would be better served in the process. It will be interesting to see how the arrival of biosimilars plays out in the courts. And at the pharmacy cash registers.

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