Pharma Development Costs: A Biosimilars Case of Cost-Benefit

  • September 22, 2015

By Dr. Robert Roth

A recent press release noting the launch of Zarxio biosimilar version of Neupogen at only a 15% discount from the innovator product raises some basic questions related to FDA requirements for biosimilars and the value to the American public of such products entering the market.

As we noted in a blog published earlier this year, EU approval of Zarxio was concluded solely on the basis of comparative in vitro binding experiments and pharmacodynamic endpoints in healthy human volunteers, whereas the U.S. data package included a pivotal clinical non-inferiority study in nearly 200 subjects demonstrating therapeutic equivalence to Neupogen. Although we are not privy to the costs for the clinical development portion of the U.S. data package, it is commonly cited that for long and complex clinical trials the costs for late-stage clinical work can be in the range $16,000-$25,000 per subject or even higher. Development time is also greatly expanded when long-term clinical trials are conducted, especially if many sites and investigators are needed and if there is a focus on chronic dose safety including specialized tests such as immunogenicity.

The EU discount for the biosimilar, initially set at approximately 15% as in the U.S. but later raised to 20-30% as noted in the press release, suggests that the less onerous EU development program may have translated into lower costs to patients and therefore a more favorable cost-benefit for both patients and the pharma company. Assuming that there is some reasonable relationship between development cost and sponsor reimbursement, is the additional cost to U.S. patients because of more clinical development cost worth it to ensure the acceptability of the product as a biosimilar? How justified are the extensive development programs and patient costs when the stated intent of an abbreviated licensure pathway is to make treatments more affordable? Since the generic drug paradigm based solely on comparative characteristics and bioequivalence is unlikely to ever prove sufficient for most complex biological drug products, one is left to wonder just how cost effective is the biosimilar approval pathway and associated data requirements.

Robert Roth, M.D., Ph.D., is Vice President and Worldwide Medical Director at The Weinberg Group, the world’s leading food and drug consulting firm. If you have any questions or thoughts on this blog post or others, please contact us