What will rein in these Aston Martin-like price tags. At least Herceptin will lose its patent protection soon. Right? And biosimilars will force the price down. Wrong! Those banking on biosimilars to bring the cost down to earth are in for a rude shock.
Biosimilars cannot qualify as replacements for biologics once their patent expires by following the path laid down by the 1984 Hatch-Waxman Act for "generics". Under Hatch-Waxman Act, incorporating active ingredient and showing similar effect or PK qualifies a generic drug as equivalent to the branded.
For biosimilars -- the generic equivalent of biologics, such as, antibodies and vaccine that make up the bulk of oncology drugs -- the bar is higher: the biosimilars must match the physical structure and biological effect; the proteins and formulations are more complex; interchangeability is not easy to demonstrate; and an abbreviated Phase III trial would be essential. Not an easy (or cheap) task!
The issues are so complex that FDA has yet to issue its guidance on the regulatory path to biosimilars' approval; the draft guidance was released more than a year ago in February 2012.
Better option is BIOBETTER. . . injecting Silicon Valley tech style into Pharma model
In her article, "Biosimilars: On Pins and Needles," in the March issue of Medical Marketing & Media, Deborah Weinstein quotes Frost and Sullivan's analyst, Debbie Toscano that a Biobetter is a more attainable goal for pharmaceutical and generic drug companies to compete with branded biologics and bring down the price.
The idea of "biobetter" formulation means treating follow-on drug as a new drug, only better. Just like Samsung or Blackberry coming up with new cellphone models, OS and Apps to compete with iPhone, the same market dynamics need to happen in the world of oncology drugs -- copying will not work. Biobetter remains a goal.
Meanwhile, news like the one from Sloan-Kettering will continue to make headlines:
"The doctors at Sloan-Kettering balked at the high price of Zaltrap and decided not to approve the drug for use in the hospital. Three of the doctors then wrote an Op-Ed article in The New York Times explaining their rationale and making a strong case that there is often little relationship between the prices of drugs and the value they provide. Companies often seem to charge what the market will bear for cancer drugs — as much as $35,000 a month and $100,000 a year in various cases." - November 13, 2012, New York Times [Link]
There are things that Congress can do to rein in the runaway cost of oncology drugs. The top oncologists in the country, Hagop Kantarjian, Tito Fojo and Leonard Zwelling recently suggested common-sense policies in an opinion piece, "Making Cancer Drugs Less Expensive," in the Washington Post, February 22, 2013.
"And how do we reduce the price of cancer drugs? We can start by eliminating self-inflicted wounds: Medicare should be allowed to negotiate prices as the VA system does — and as Medicare was able to do before 2003 — and pay-for-delay strategies should be outlawed.Regulations on cancer research that add to costs without increasing patient safety should be curtailed. Regulators and investigators alike should demand that new drugs offer true clinical improvement over current drugs, measured by such standards as cost-efficacy ratios, prolonging of life in years or quality-adjusted life in years, not just efficacy, safety and other “me-too” criteria.
Finally, market forces should have a greater role. The price of most traded commodities is based on supply and demand; this should be true of cancer drugs, too. Factors for pricing could be based on an objective measure of patient benefit, such as the average number of months lived longer with the new drug, with higher pricing for more months; the degree of tumor shrinkage; improved quality of life; or months lived in remission. If prices were set with FDA approval, to help keep rates at what the market can reasonably bear, costs would likely be significantly lower, as is the case in European Union countries such as Britain, where regulators approve drug prices."