What’s keeping less expensive biologic drugs from the U.S. market?

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• EMILY SENAY:

  Philip DeLuca is enjoying retirement after working decades on the Long Island Railroad. The 71 year old stays busy with his ten grandkids, but lately it's been difficult to keep up.

  How has your energy been?

• PHILIP DELUCA:

  Low. I can't do the things I did, you know, ten, 12 years ago.

• EMILY SENAY:

  Patricia DeLuca is his wife.

• PATRICIA DELUCA:

  He became more tired, more frustrated with not being able to do the things he normally could do.

• EMILY SENAY:

  DeLuca found out his bone marrow wasn't producing enough normal red blood cells, and if the levels dipped too low it could be life-threatening. So the doctor gave DeLuca two choices: blood transfusions or medication that would boost his red blood cell count. He chose the medication.

• PROCRIT AD:

  Too tired to do the things you used to do? Talk to your doctor about Procrit.

• EMILY SENAY:

  DeLuca's medication, Procrit, is known as a biologic, a relatively young and revolutionary class of drugs. Other popular biologics include Humira or Enbrel used to treat rheumatoid arthritis and Lucentis for macular degeneration.

  Unlike pills used to treat common conditions like high blood pressure or high cholesterol that are made from chemicals, biologics are more complex. They're made in living organisms, resulting in proteins.

  They're often considered more effective because biologics work with the body to normalize its immune system in a way chemicals don't.

• GEOFFREY EICH:

  We will see more biologic medicines.

• EMILY SENAY:

  Geoffrey Eich is Amgen's executive director of research and development policy. Amgen is one of the largest manufacturers of biologics, including the drug DeLuca takes.

• GEOFFREY EICH:

  I think everyone is very excited about what the future holds in terms of our ability to treat diseases like high cholesterol, or diseases like Alzheimer's and fighting cancer, but also for disease where a patient will have a chronic lifelong disease.

• EMILY SENAY:

  Since DeLuca's condition is chronic every Monday morning he goes to the hospital for an injection of Procrit. The biologic medication has helped, the DeLucas say, but it's also extremely expensive.

• EMILY SENAY:

  When you heard the price of the, of the shot can you tell us what your reaction was?

• PATRICIA DELUCA:

  I was shocked. I had no idea that this could cost this much.

• EMILY SENAY:

  Had you seen a medication that has cost that much before?

• PATRICIA DELUCA:

  No.

• EMILY SENAY:

  According to a bill DeLuca showed us a single injection costs $1,500. Under his insurance plan his copay ended up being $196. And remember, he was going to the hospital every week. So the copay turned out to be nearly $800 a month.

• PATRICIA DELUCA:

  It's financially difficult. We're on a pension. And $196 a week extra, coming out of that pension, is a lot of money for us.

• EMILY SENAY:

  Can you afford it?

• PATRICIA DELUCA:

  Can I afford it? I have to afford it. I have to pay it. It's a bill.

• EMILY SENAY:

  But why is it so expensive? Some critics say that's because there's no system in place in this country that would make "generic" biologics available. But they are sold overseas and at a much lower price and have been for nearly eight years. There they are known as biosimilars.

• STEVE MILLER:

  If you look at Europe with there are already biosimilars on the marketplace the discount is somewhere between 30 and 50 percent. So, we're talking about tens of thousands of dollars of savings annually for each and every patient.

• EMILY SENAY:

  So Europe is already using these biosimilars?

• STEVE MILLER:

  Much of the world is way ahead of us. So Japan, Canada, much of Europe already has biosimilars in their marketplace. And patients are already benefiting from both the great products and the discounts.

• EMILY SENAY:

  Steve Miller is the Chief Medical Officer at Express Scripts, which negotiates drug prices with pharmaceutical companies for employers, unions as well as the department of defense.

  Patients like DeLuca are forced to pay much more for their biologics because there's no competition in the U.S. in Europe there are at least 5 versions of DeLuca's biologic where according to manufacturers they're sold for up to 30 percent less than the brand name biologic.

  So why aren't less expensive versions of DeLuca's drug or any biosimilars available in this country? That's because when Congress passed the Hatch-Waxman bill nearly thirty years ago creating generic drugs, biologics barely existed.

• EMILY SENAY:

  If these biosimilars could be sold would people have access to something they don't have access to now because it's just too expensive?

• STEVE MILLER:

  So just like when you use a generic drug and you often have, you know, a four-dollar payment or ten-dollar payment, the same thing would happen with biologics in that you would have a much lower co-pay.

• EMILY SENAY:

  In 2009 the federal trade commission reached a similar conclusion that "competition is likely to lead to an expanded market and greater consumer access." In other words lower prices.

  Geoffrey Eich of Amgen says his company is open to competition but cautions that biosimilars cannot be approached the same way as traditional drugs.

• GEOFF EICH:

  They're different, right. These are, these are different than drugs and different than chemicals. And the prevailing assumption is that you have a brand medicine and you have generic medicines and generics are all the same and they're also the same as the brand medicine. In the world that we're going to in the future though, because they're expressed in living cells, each medicine will have its own particular profile.

• EMILY SENAY:

  That means biosimilars will never be identical to the original biologic.

  According to the New England Journal of Medicine, "given the complex nature of biologics, it's unlikely that a "one size fits all" systematic assessment of biosimilarity can be developed."

  But Miller says the U.S. should simply look to the European Union as a model. The European medicines agency, which is the equivalent of the F.D.A., has been approving biosimilars there for eight years.

• STEVE MILLER:

  There has actually not been a single episode with a biosimilar in Europe that has risen to the point of concern. And they've had a great track record.

• EMILY SENAY:

  In an email to NewsHour a spokesperson for the European Medicines Agency wrote, "biosimilars have a good safety record since introduction" in 2006.

  Still, Eich says new procedures have to be in place before biosimilars hit the u-s market.

• GEOFFREY EICH:

  You really have to have a program in place that gets them from the law that enables them to be approved to the FDA approval, to the way they're going to be used in health care.

• EMILY SENAY:

  The affordable care act passed in 2010 authorized the FDA to set up an approval process for biosimilars. But in the four years since, not a single biosimilar has hit the U.S. market.

  What's taking the FDA so long?

  In an email to the NewsHour an FDA spokeswoman wrote: "congress deliberately set a very high bar for a biosimilar product approval…when these products go to market, they will meet the standards of safety, efficacy and high quality that everyone expects and counts on."

  But Miller says the FDA has been impeded by biologic companies that have extensively lobbied congress and state legislatures to stall competition. He says the strategy is designed to protect the huge profits they make off their biologic drugs.

• STEVE MILLER:

  If you think about just the drug erythropoietin which is made by Amgen, their profit's a month over $100 million for that product. That product came out into the market in 1989.

• EMILY SENAY:

  Eich says the high price of biologics is justified.

• GEOFFREY EICH:

  They are expensive to manufacture. The workforce is made up of PhD scientists who on a daily basis, are managing the production of these medicines, so there's a tremendous amount of investment that goes into making and manufacturing high-quality biologic medicines.

• EMILY SENAY:

  Some people say that Amgen is able to charge $50,000 a year for a particular medication because it can. Because it's able to. There's no regulation. And when those issues come up, a company like Amgen has been very successful at lobbying to prevent any– movement in terms of price.

• GEOFFREY EICH:

  I'm not, I'm just not familiar with any of the pricing information. But what I can tell you is that I mean, we're a company that's focused on the future. So if there are revenues here, we want to invest in clinical studies for new clinical trials and for new medicines.

• EMILY SENAY:

  In fact Eich says if the company were so against biosimilars it wouldn't have its own plans to start selling them.

• EMILY SENAY:

  One of the points that Amgen makes is that they too are getting into the biosimilar marketplace. They don't see anything they're doing as, as a roadblock to getting biosimilars on the market. Is, is that fair?

• STEVE MILLER:

  The reality is that they actually are well positioned to make biosimilars, but they probably make more on their branded product than they'll make on their biosimilars. So, it makes sense every, every month they can delay makes a lot of money for them.

• EMILY SENAY:

  Now these medicines that would be very similar to the one you're taking would require that the FDA, and the regulatory process, and the states, and the companies move very slowly to make sure that these are safe. Isn't that what we want?

• PATRICIA DELUCA:

  How long does it take?

• PHILIP DELUCA:

  And if they are being used in Europe, and if they're standing', and if they're still surviving, and if they're in better shape? Then obviously it must be, it must be working and it must be safe.

• EMILY SENAY:

  Philip DeLuca's doctor recently added another biologic drug to his treatment regimen. He's waiting to find out how much that one's going to cost him.