Biologic drugs have been available in Canada and elsewhere since the 1970’s and are used to treat a wide variety of diseases, including cancer, rheumatoid arthritis, multiple sclerosis and diabetes. Health Canada defines a biologic as a product manufactured from animals or micro-organisms through the metabolic processes of the organisms themselves. They are inherently more complex than chemically synthesized pharmaceuticals and are much more difficult to produce. Examples of biologics include insulin, vaccines, blood components, protein hormones and gene therapy products.
Biologic drugs currently comprise between 14 – 16 percent of the Canadian pharmaceutical market and cost the Canadian health care system more than $3 billion annually. However, despite their effectiveness, the extraordinarily high cost of biologics has been a barrier to increased use. For example, it can cost $30,000 annually to administer Remicade to a patient suffering from ulcerative colitis, or $17,000 each year to treat one patient with rheumatoid arthritis who is prescribed Enbrel.
Regulatory agencies in Canada, the United States (US), the European Union (EU) and other developed countries have attempted to address the cost issue by allowing generic pharmaceutical companies to produce their own versions of previously approved, or reference biologics. Due to the complexity of these products, and the difficulties in producing exact replicas of a reference biologic, most countries have adopted terms other than bio-generics to describe them. Health Canada, which unveiled its regulatory framework in March 2010, has chosen the term Subsequent Entry Biologic (SEB). This new regulatory framework creates an opportunity for subsequent entry biologics to become as significant a therapeutic option as the small-molecule generics have become. However, SEBs are not interchangeable with the current biologic drugs offered and we will not see significant savings generated, such as we witnessed when generic drugs were introduced into the
The above is an important trend to consider when considering plan design alternatives.