Amgen Is Taking On a $3 Billion Cancer Drug. But Will It Cut Costs for Patients?

September 15, 2017, 2:34 PM UTC
An Amgen sign is seen at the company's office in South San Francisco
An Amgen sign is seen at the company's office in South San Francisco, California October 21, 2013. The biopharmaceutical company reports earnings on Tuesday. REUTERS/Robert Galbraith (UNITED STATES - Tags: BUSINESS HEALTH SCIENCE TECHNOLOGY LOGO) - RTX14J0R
Photograph by Robert Galbraith — Reuters

The Food and Drug Administration (FDA) continued its potentially record-breaking pace of new drug approvals Thursday, green lighting the first-ever “biosimilar” copycat of a cancer drug. The new treatment, U.S. biotech Amgen’s Mvasi, has a big target in its crosshairs: Avastin, a versatile cancer therapy from drug maker Roche that rings in nearly $7 billion in global annual sales, including $3 billion in America.

Avastin is, like many cancer drugs, extremely expensive. And that was one of the motivations for introducing a clinically-proven competitor like Mvasi (also known as bevacizumab-awwb) to the market. Biosimilars are approximate copies of “biologic” drugs that must prove themselves “similar” the branded product they’re attempting to mimic. Mvasi is approved in all of the same cancer indications as Avastin (colorectal, lung, brain, kidney, and cervical cancer).

“Bringing new biosimilars to patients, especially for diseases where the cost of existing treatments can be high, is an important way to help spur competition that can lower healthcare costs and increase access to important therapies,” said FDA Commissioner Scott Gottlieb in a statement. “We’ll continue to work hard to ensure that biosimilar medications are brought to the market quickly, through a process that makes certain that these new medicines meet the FDA’s rigorous gold standard for safety and effectiveness.”

Biosimilars haven’t been on the U.S. market for very long even though they’re been around in other countries for more than a decade. The first one was only approved in 2015. The big question about them is just how much they might lower health care spending—and whether their competitive pricing will ultimately translate to savings for patients.

For instance, some biosimilars have been introduced at relatively modest 15% discounts to branded product list prices; others, like Merck’s recently-approved copy of Johnson & Johnson best-seller Remicade, can come with 35% discounts.

It’s unclear how Amgen and partner Allergan will price Mvasi. But, even if it proves significantly cheaper than Avastin, there’s a chance that those discounts will mostly be seen by middlemen such as pharmacy benefits managers and insurance companies during behind-the-scenes negotiations. That would likely translate to some out-of-pocket savings for patients—but not necessarily whatever price cut is announced.

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