Last week the US FDA announced a potential milestone for people with diabetes: it just got a lot easier to get a generic insulin approved.
First, a word about terminology: technically speaking, there’s no such thing as generic insulin, and there never will be. The word “generic” is reserved for chemical pharmaceuticals. Insulin is not a chemical, it’s a biological, created through a biological process. But biologicals do have their own version of generics, known as “biosimilars.” A biosimilar, just like a generic drug, is virtually identical to the approved biologic medication that it is based on: same structure, same purpose, just as safe, just as potent.
The FDA announcement – Insulin Gains New Pathway to Increased Competition – is downright exuberant:
Today is a historic day and a landmark moment for patients with diabetes and other serious medical conditions, as insulin and certain other biologic drugs transition to a different regulatory pathway. This regulatory transition, mandated by Congress and implemented by the FDA, is incredibly important for patients… The availability of safe and effective biosimilar and interchangeable versions of these treatments, including insulin, is expected to increase patient access, adding more choices and potentially reducing costs of these vital therapies.
The clear goal of the change is to allow for more competition in the biologics market, increasing options and decreasing prices. And there’s reason to be optimistic that it will work. While there are only a handful of established biosimilars in the US market, so far they have launched with list prices 15-35% lower than the reference products they were designed to compete with. Biosimilars may also be able to drive down prices across the board. The FDA estimates that even just one generic drug on the market can bring prices down 31-39%.
The change has been on the books for exactly ten years. When President Obama signed the Biologics Price Competition and Innovation Act of 2009 into law, it provided a decade-long transition period before coming into full force. On March 23, 2020, that transition period finally ended. Now companies interested in selling biosimilars will have a much easier path to FDA approval.
Lack of competition has been one of the prime reasons that insulin is so expensive in America. But it’s easy to imagine a future where biosimilars are widely available. A remarkable 90% of prescription medicines are sold in generic form. By contrast, today’s biosimilars have a vanishingly small toehold in the broader biologic drug market: in 2018, less than 1% of spending on biologics went to biosimilars. Some forecasters have predicted astonishing growth in the near-term for biosimilars, and the potential savings for consumers are well into the billions of dollars. The change will impact more than just insulin: biologic drugs are also used to treat conditions such as respiratory distress syndrome and deep vein thrombosis.
Nevertheless, we can’t expect the market to be flooded with new options soon. Even the newer, more streamlined approval path has been described as “daunting.” Major pharmaceutical firms – there are essentially only three insulin manufacturers for the American market – still have a few tricks available to frustrate would-be competitors. And actually developing a biosimilar insulin will be a long and extremely expensive process. In Europe, where there is greater opportunity to bring biosimilars to market, most biosimilar insulin is actually produced by “the big three” pharmaceutical businesses themselves, and as such hasn’t disrupted the market very much.
We’ve recently seen something similar happen in America, as the crescendo of outrage over insulin pricing prompted the two of the big insulin manufacturers to release lower-cost versions of their own brand-name insulins, repackaged and remarketed as “generic.” The availability of these lower-cost insulins has been generally subject to the vagaries of our byzantine insurance system.
But despite the significant roadblocks that still stand in the way of biosimilar manufacturers, the new milestone can only be seen as cause for celebration. Increased competition is desperately needed in the American insulin market.
