The FDA Just Approved Something Pretty Great

The U.S. Food and Drug Administration (FDA) just made a big step towards cutting Americans’ spending on pharmaceutical drugs. On Friday, the FDA announced that, for the first time ever, it had approved a biosimilar drug for use in the U.S. But before we can get excited about this news, we first probably need to answer the question running through all of our heads: What exactly is a biosimilar drug?

The FDA press release defines a biosimilar as “a biological product that is approved based on a showing that it is a highly similar to an already-approved biological product, known as a reference product.” Biosimilars are essentially less expensive imitations of costly drugs, known as biologics. However, biosimilars are not to be confused with generic drugs. Unlike generics, biosimilars aren’t exact copies of the drug from which they’re modeled. Rather, as the name implies, they’re just similar.

There’s a reason not many Americans are familiar with biosimilars — they haven’t really made it over here yet. In Europe, on the other hand, they’re gaining speed and fast. Fortune reports that FirstWord estimates biosimilars could account for as much as $4.8 billion of Europe’s drug sales in 2015. The FDA’s first nod of approval for a biosimilar today is the first concrete indication that biosimilars might soon play just as big of a role in the U.S. pharmaceutical market as they have in Europe.

This announcement isn’t just something for the pharmaceutical world to get excited about either. Biosimilars spell good news for patients more than anyone. For example, the drug that the FDA recently approved, Zarxio, is used for patients undergoing chemotherapy, as it increases white blood-cell counts. The medication is very similar to a medication that’s been on the market since 1991, except for one key difference — it’s more affordable.

“This is the first approval for low cost alternatives to biological drugs,” Ronny Gal, an analyst at Sanford C. Bernstein & Company, told The New York Times in an email.

It will reasonably allow for reduction of cost in older cancer care drugs, clearing room in the budgets for new breakthrough cancer agents.

According to prescription drugs benefits manager Express Scripts, biosimilars range in cost from 33 to as much as 90 percent less than biologic drugs, The New York Times reports. The approval of just this one biosimilar, Zarxio, will likely save the U.S. an estimated $5.7 billion in drug costs over the next decade. If the biosimilar industry is launched more broadly, The Wall Street Journal estimates the U.S. could cut its drug costs by as much as $375 billion.

With everything broken down, it makes a lot more sense why the FDA’s announcement is such an exciting one. As healthcare and pharmaceutical costs continue to skyrocket, a step towards cutting costs is good news indeed.

Images: Getty Images