Biosimilars and Healthcare Costs Essay example

1495 Words Sep 16th, 2015 6 Pages
Biosimilars – Does it reduce healthcare cost or not?
As the US healthcare costs are skyrocketing, the legislators are making intensive efforts to find new ways to reduce them. One approach is to reduce the high cost of biologic drug products. Having the intention to reduce healthcare costs, the Congress established an abbreviated approval pathway for biosimilars as part of the Affordable Care Act (ACA), which became law in March 23, 2010. The Affordable Care Act authorized the US Food and Drug Administration (FDA) to develop regulations for the approval of biosimilars. As a matter of fact, the benefits of biosimilars to all its stakeholders seem modest due to the complexity of biological molecules, challenging manufacturing processes
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health system $217 billion, up from $188 billion in 2011.” Generic drugs account for about 65% of the US pharmaceutical market. The Hatch- Waxman Act of 1984 established an abbreviated approval pathway for the generic chemical drugs.
The approval process of a generic chemical drug is simple and requires limited clinical studies. In order to approve a generic chemical drug, FDA requires only bioavailability and bioequivalence (BA/BE) studies in humans to compare the generic drug to the innovator. The safety and efficacy of the generic drug are assumed based on studies conducted for the innovator product. Since the innovator drug market has already been established, no additional commercialization programs required. As a result, generic chemical drugs take less time to develop and their manufacturing and commercialization costs are significantly lower than that of the innovator products. The less financial investment leads to the lower costs of the generic drugs. There may be multiple generic versions for any given innovator product. This increases competition for market share and reduces the retail price even further. Also, a generic version of a chemical drug is an exact copy of the innovator drug and is interchangeable at the pharmacy level. Therefore, a pharmacist can dispense a generic drug instead of a brand-name drug without a separate prescription. All these reasons made the generic drugs affordable to everyone and thus reduced the…

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