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The fight over the future of our most expensive drugs

An illustration of a hammer and a concrete pill.
Illustration: Sarah Grillo/Axios

The market designed to create competition for biologics — typically our most expensive drugs — has been slow to take off, but some experts say that even its best-case scenario doesn't do enough to lower drug prices.

Why it matters: While wonks debate the future of biosimilars in policy journals and on editorial pages, the argument is reflected in the political divide over whether enhanced drug competition or price regulation is the best way to address drug prices.

The big picture: Congress created the pathway for biosimilars to come to market knowing that they'd look different than small-molecule generics, and even their most ardent supporters say biosimilars will never achieve the steep discounts that generics do.

  • That's because biosimilars are much harder to make than normal generics, meaning that drug companies have to charge enough to make their endeavor worthwhile.
  • Nevertheless, the Biosimilars Council says on its website that biosimilars could lead to more than $54 billion in savings over the next decade. A recent analysis by the Pacific Research Institute found that biosimilars could save $7.2 billion a year under the most optimistic modeled scenario.

Yes, but: Some experts are arguing that that's not enough, and that biosimilars aren't the best way to control biologic prices.

  • Last week, Memorial Sloan Kettering Cancer Center's Peter Bach and MIT's Mark Trusheim published an editorial in the Wall Street Journal arguing that biosimilars don't produce enough savings and that the resources spent developing them would be better used to bring new, innovative drugs to market.
  • Bach and Trusheim proposed that the government instead regulate the price of older biologics after they've been on the market for a certain period of time, which they wrote could save around $50 billion a year.

The other side: Former FDA Commissioner Scott Gottlieb wrote an editorial in the WSJ yesterday in response, arguing that Congress should speed up the use and development of biosimilars instead of regulating prices.

  • "Among other dangers, [price regulation] could trigger shortages of the drugs. It would also discourage investment in manufacturing, as few drugmakers would want to produce complex drugs in perpetuity for little profit," Gottlieb writes.

The bottom line: This argument isn't just for the academics. The leading Democratic presidential candidates are also arguing for drug price regulation, a major shift left for the party.

  • "Price regulation may be a tough sell in some quarters, but it’s the best way to keep the promise of America’s extraordinary pharmaceutical industry alive," Bach and Trusheim write.

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