Why Are Biologics So Expensive?
Many of the newer asthma treatments are biologics. They are options for people with severe asthma. They are also very expensive. So, that begs the question: “Why are biologics so darn expensive?” I will explain. Here are 4 reasons biologics are so darn expensive.
Before I give the reasons why they are expensive, how about one example. I”m just randomly picking one here. Fesenra was approved by the FDA in November 2017, for severe asthma with an eosinophilic phenotype.1 The actual cost of Fesenra treatment in the first year is $38,000. That includes the initial loading dose plus seven subsequent doses. During subsequent years, 6-7 doses are needed as maintenance therapy. The cost for this is $28-33,000.2 And AstraZeneca, the makers of Fesenra, say this is less expensive than the other biologics approved for severe asthma.3 Still, that’s pretty darn expensive.
Now, back to our 4 reasons why they are so expensive.
1. You cannot make generic biologics.
Once approved by the FDA, most pharmaceuticals apply for patents. These patents are good for 20 years.4-5 They are good because they allow pharmaceuticals to recoup money invested into the drug. On average, from idea to FDA approval, most drugs cost pharmaceuticals $2.5 billion.6 So, patents are very important.
But, once the patent period is expired, other pharmaceuticals may make copies of that drug. This is easy to do because the exact chemical components of drugs are known. It’s easy to copy them. So, because these generic pharmaceuticals only have to invest a small portion of that $2.5 billion, it’s much easier for them to recoup losses. So, they can sell their drugs at a much cheaper cost. This creates competition between pharmaceuticals. This is what drives down the cost of drugs over time.7
With biologics, it’s not so easy to make generics. They are made of complex molecules, and the exact components are often unknown. Plus, they have to be manufactured in special environments using biotechnology (described below). So, making exact copies of biologics is not possible in the current environment. This makes it impossible to make generic biologics at the present time.7
2. Legislators are not sure what to do.
So, while it’s impossible to make exact copies of biologics, it is possible to make similar products. These similar products are called “follow-on biologics,” or, more commonly, as biosimilars. These would be your generic versions of biologics. They are similar, so they are expected to do the same thing as the original biologic.8
But, is similar good enough? Will these have the same desired effect as the originals? Since they are similar and not exact, should they also be tested as vigorously as the original product to make sure they are safe and effective? Would this make them any cheaper than the original biologic? It’s questions like these that plague legislators, making them unsure how to handle this issue. So, this has resulted in lots of regulations for makers of biosimilars to follow, which brings us to reason #38-9
3. The industry is highly regulated.
Because this is such a new area of medicine (it’s only been around 15-20 years), regulations that do exist are very stringent. There are lots of tests, even more so than for drugs, that need to be performed before biologics can be studied on humans. More rounds of studies on humans are required for biologics compared with drugs. So, this makes gaining FDA approval of biologics very difficult and quite expensive.8-9
So, until legislators learn more and figure out how to best regulate the biologic and biosimilar industries, costs will probably remain high. And even when they do they may still remain high.
4. Biotechnology is exorbitantly expensive.
Putting #1 to #3 on this list aside, making biologics requires biotechnology. Biotechnology is crazy expensive. This technology is what makes it possible to turn a biologic into a medicine.7-8
Look at it this way. Biologics are proteins taken from living tissue. You don’t want to mix these proteins with other proteins or with germs, so aseptic technique must be used. These biologics cannot replicate without proteins released from living cells. So, researchers have to search long and hard to find a special environment for them to replicate. “Highly trained” scientists must be hired to find these environments.7
These environments contain living tissues, such as from bacteria or yeast. These living tissues must be kept alive. So, this means they must be properly nurtured. This requires specialized equipment, and even specialized structures. This is how biologics are manufactured using biotechnology. To add to this, lots of the biologic must be manufactured in order to be used medicine, so it may take a long time to manufacture them.7-8
What to make of this?
Well, the bottom line here is that biologics are expensive. At the present time, pharmaceuticals and legislators are unsure how to get around these high prices. After all, pharmaceuticals do have to make a profit to keep producing these medicines. So, what to do about it is something asthma advocates, researchers, pharmaceuticals, and legislators will continue to discuss in the days ahead.
Have you experienced a collapsed lung?