According to Reuters, the U.S. Supreme Court justices unanimously overturned a lower court’s ruling that prohibited pharmaceutical companies from selling and retailing copycat versions of biologic drugs until six months after the Food and Drug Administration approved it. In the 9-0 ruling, a Swiss pharmaceutical company Novartis AG (NASDAQ: NVS) won the right to market near-copies, also known as biosimilars, of Amgen Inc.’s (NASDAQ: AMGN) Neupogen before the six-month period.
Novartis disputed in 2015 the ruling from the U.S. Court of Appeals for the Federal Circuit in Washington gave the brand-name maker of Neupogen an extra six month period after the 12 years provided under law. Companies such as Novartis are normally allowed to manufacture a biologic near-copies normally when the original products patent expires.
This announcement has numerous consequences for pharmaceutical companies since it will control the duration of time brand-name makers of biological drugs can keep bio similar off the retail shelves and pharmacies. Since rising drug prices are a significant hindrance for patients and politicians, health experts believe bioimilars to succeed as a cheaper alternative to original medicinal brands. This period of time, even if only six months, can equal a difference of hundreds of millions of dollars in revenue.
Similar to generic drugs, biosimilars are cheaper alternatives to costly name brand drugs. In September 2015, Novartis began selling Zarxio, a biologic near-copy of Amgen’s Neapogen, at 15 percent less than their counterpart’s list prices and became the first biosimilar drug to be win regulatory approval in the U.S. Since the launch of Zarxio, Neupogen sales have dropped from over $1 billion, to $765 million last year.
Although it has the capability of treating a wide range of conditions such as Crohn’s disease, rheumatoid arthritis, plaque psoriasis, and variations of cancer, biosimilars do not have any access to the original active drug substances and are made of complex, living cells.