The introduction of cheaper generic drugs, or biosimilars, can lower healthcare costs © AFP via Getty Images

Europe’s more liberal approach to biosimilar drug patents is continuing to give it an edge over the US in producing lower cost medicines — despite moves by Washington to ease market access for generic manufacturers.

US healthcare costs are significantly higher than Europe’s — the $11,000 spent per American in 2019 is more than double the amount per capita in France — with Europe’s wider availability of cheaper generic drugs, or biosimilars, a contributing factor.

Biosimilars are generic versions of biologic drugs that may only be sold after a period of exclusivity for the original treatment creator. This time-limited monopoly over the drug allows pharmaceutical companies to recoup the money spent on research and development (R&D).

“Without such protections, pharmaceuticals could not profit from their labour,” says Eileen Cole, partner at White & Case, a US law firm. “These exclusivities are intended to incentivise pharmaceutical companies to innovate.

“Other manufacturers are able to develop their own treatments that are biologically similar. These biosimilars then need to be registered with and approved by regulators before they can enter the market and compete with the original treatment,” she explains.

In Europe, the European Medicines Agency (EMA) will not approve a biosimilar in the first 10 years after approving the original drug. But, in the US, the Food and Drug Administration (FDA) will hold off for 12 years.

That difference in timing can be seen in the case of the drug bevacizumab — a treatment for colon and lung cancer and renal-cell carcinoma, sold as Avastin. This year, Europe approved a fifth Avastin biosimilar, whereas the US has approved just two biosimilars for bevacizumab overall, in 2017 and 2019.

As a result, the EMA has now authorised at least seven biosimilars of all types this year, while the FDA has approved none, notes Washington-based Aydin Harston, an intellectual property lawyer at Rothwell, Figg, Ernst & Manbeck, a US law firm.

And this matters to pharma groups as the introduction of biosimilars can drive down the price of drugs. For example, they cut the cost of some blood clot treatments by two-thirds in Europe, according to data provider Iqvia.

“This is a market that pharmaceutical companies that invent such treatments guard closely,” says Harston, who also holds a PhD in biochemistry. “Global sales for the top 10 branded biologic drugs totalled about $81bn in 2019.”

FDA reluctance to keep pace with Europe may be attributed to its stringent review process for the approval of biosimilars, suggests Harston — but also to the pharmaceutical industry’s strong lobbying presence in Washington.

According to research company Statista, pharmaceutical and health companies spent $306m on lobbying government in 2020 — the most by any industry.

“There is a direct cost to the public in the availability of products that are biosimilar to brand-name treatments — the more biosimilars, the more generic medicine options are available at a cheaper cost,” Harston points out.

“But there is a balance to be had,” he continues. “Intellectual property protections exist to spur innovation and, without them, pharmaceutical companies would generally not have sufficient motivation to develop new treatments, particularly the cost-intensive biologic therapies.”

US President Joe Biden signed two bipartisan bills aimed at reducing prescription drug prices by supporting biosimilars © Getty Images

Such innovation by drugmakers came under the spotlight during the race to develop vaccines during the Covid-19 pandemic, Cole notes.

“Pharma companies who had techniques in place based on their R&D were able to quickly turn and focus on the issue at hand,” Cole says. “If we didn’t have great pharma companies that were innovating in these spaces already, development of a Covid vaccine likely would’ve taken a lot longer.”

Yet, the US appears to be easing its grip on biosimilar approvals.

In April, US President Joe Biden signed two bipartisan bills aimed at reducing prescription drug prices by supporting biosimilar alternatives to branded drugs.

Iqvia estimates that expanding the use of biosimilars could reduce the costs of medications in the US by $100bn over five years.

In particular, the Advancing Education on Biosimilars Act pledged funds to educate patients, doctors and caregivers about biosimilar drugs via a new government website.

Enabling this broader access to biosimilars has bipartisan support on Capitol Hill, where — in total — there are now three bills circulating to extend access to generics.

“The pandemic forced us all to learn more about the development paths of medicine and drugs — how long treatments can take to develop and the importance of innovation,” Cole says. “The government has taken note of the need to educate people.”

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