Will Novartis' Copycat Zarxio Approval Be a Game Changer for U.S. Biologic Drug Market?

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Reported by Annette Kreuger, Industrial Info Resources (Sugar Land, Texas)--The U.S. biologics playing field is taking on a whole new aspect with the approval of the drug Zarxio, a similar version of Amgen's (NASDAQ:AMGN) (Thousand Oaks, California) cancer drug Neupogen (filgrastam). Novartis AG (NYSE:NVS) (Basel, Switzerland) is now free to market Zarxio through Sandoz, its generic division in the U.S. The key word is "similar," as in "biosimliar," the industry's term for generic or copycat biologic drugs.

To begin with, biologics differ from traditional pharmaceuticals, because they are manufactured using the base of a patented living organism. A biosimliar is unable to use the same active pharmaceutical ingredient (API) found in pharmaceuticals to produce a generic equivalent; instead, the manufacturer is forced to use comparable cells, but does not have access to the same cells.

Ultimately, the resultant drug is similar in effectiveness and safety. But it is not exactly the same as the branded drug, because the "API," or cell strain in this case, is not the same.

Biosimilars are accessible outside of the U.S., and have been available in Europe for almost a decade. Zarxio is already on the market in 40 other countries, sold under the name "Zarzio." Another difference between biosimiliars and traditional generics is the cost savings offered over the branded drug. Rather than the typical 75% saving offered by generics, biosimilars currently on the market are somewhere between 20% and 30% lower than their branded counterparts.

Biologics not only cost more to manufacture, but have the added cost of the necessary marketing to explain the benefits of using a biosimilar. Despite the calls for lowered drug prices from many physicians, many may hesitate to prescribe something that is not quite the same as a proven drug for patients. Physicians will have to specifically name Zarxio on their patient's prescription, unlike a true generic, for which physicians can request the use of the "generic equivalent."

Much like what happened when traditional generics arrived on the market, the major drug companies are already pursuing their own biosimilar versions of their own branded drugs. The thought is that as biosimilars eventually come into more widespread acceptance and use, the market undoubtedly will grow and add a profitable revenue stream.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.