Yahoo Finance 
A new drug that could save the US billions just got approved
(REUTERS/Karoly Arvai)
The FDA just approved a version of Enbrel, the blockbuster arthritis drug made by Amgen that brought in $5 billion in sales in 2015.
The newly approved drug, made by Novartis' Sandoz division, will go by the marketed name Erelzi. It's a type of drug called a "biosimilar," which is like a generic version of a biologic medication, a medicine produced by living cells.
Biosimilars are a bit more complicated than your average competing medicine: Unlike generics for chemical-based drugs like antibiotics, which can be interchangeable with branded versions, the copycats of biologic medications have a few more caveats.
This newest biosimilar is now approved to treat, according to the FDA, the same conditions that Enbrel is approved to treat:
moderate to severe rheumatoid arthritis
moderate to severe polyarticular juvenile idiopathic arthritis
active psoriatic arthritis
active ankylosing spondylitis
chronic moderate to severe plaque psoriasis in adults
This is now the third biosimilar that the FDA has approved.
Earlier in 2016, the FDA approved a version of Remicade, or infliximab, a drug used to treat autoimmune diseases like Crohn's disease and rheumatoid arthritis. Another one called Zarxio (also made by Sandoz) was approved in 2015. In July, the FDA held panels that recommended that the agency approve this biosimilar, as well as a biosimilar for another autoimmune drug called Humira.
There's not a clear timeline on when Sandoz will be able to start putting Erelzi on the market, since there are some legal disputes surrounding the drug. In response to what price it would come in at, a Sandoz spokeswoman said: "It is too early to speculate about the price of Erelzi. That being said, we believe patients in the US can benefit greatly from a competitively priced etanercept manufactured in accordance with strict GMPs and high quality standards."
And a spokeswoman for Amgen said in a statement, "We have confidence in our patents related to Enbrel and are currently in litigation with Sandoz to enforce our patent rights. Immunex/Amgen and Sandoz have entered into an agreement with respect to a preliminary injunction regarding Sandoz’s etanercept as set out in the Court’s order of August 11, 2016."
Having more biosimilars in the US would be a big deal: It might be the best way to drive down the cost of (generally very pricey) biologic medications that have been around for a while. The savings of putting people on less costly biosimilars — even just new patients who have never taken the original — are estimated to be billions of dollars.
What makes biosimilars different from generics
Developing a biosimilar is not as easy as creating a generic knockoff; because you're working with complex living things, making a copy isn't so simple.
"When you have a small molecule like Lipitor, you know where every single atom is," Dennis Lanfear, CEO of biosimilar company Coherus Biosciences, told Business Insider in April. Generic versions of drugs like that can be chemically identical.
That's not the case with something like a monoclonal antibody — a type of lab-produced protein that can go after certain cells like your immune system would — which can vary widely. This means that you have to run the biosimilar through a bunch of studies to prove that it does the same thing that the original drug does.
Coherus is developing biosimilar versions of drugs for autoimmune diseases and cancer treatment, including biosimilar versions of Humira and Enbrel. It plans to file a biologic-license application to the FDA for its version of pegfilgrastim, a bone marrow stimulant, in 2016.
"Biosimilars are here," Lanfear said. "They are now here today. The simple ones have been approved, like Zarxio, and the complex ones have also been approved."
NOW WATCH: Scientists are testing a new drug that could add years to your dog's life
More From Business Insider
