A new kind of 'generic' medication could save us billions on medicine by 2020

White blood cellShutterstockZarxio, the first biosimilar approved in the US, boosts white blood cells (shown here in a rendering) to help cancer patients fight off infections.

In 2020, the world will spend about $US1.4 trillion on medicine, according to a new report from the IMS Institute for Healthcare Informatics.

While that sounds like a big rise, it’s lower than the rate seen for 2010-15.

The report credits this curb in spending to drugs called “biosimilars,” which the report estimates will have roughly a $US41 billion impact on the industry.

Biosimilars are essentially generic versions of biologics, or drugs made of living organisms (usually cells).

Because drug companies can patent the cells, other companies can’t copy their recipe to make generics the way they do with chemical-based drugs.

But the patents on some of those biologic drugs are about to expire. Humira, a drug used to treat rheumatoid arthritis and inflammatory bowel diseases, among other conditions, will lose its patent in the next few years.

And when this happens, companies will scramble to make biosimilar versions of it, the report says.

The FDA has shown that they’re willing to approve these drugs, so long as there’s “no clinically meaningful differences in terms of safety and effectiveness from the reference product,” according to their website. The FDA approved the first biosimilar drug in March 2015. The drug, called Zarxio, helps patients in cancer treatment fight infection, and has the same active ingredient as the biologic it’s similar to, called Neupogen
. In Europe, biosimilars already have a route to approval, Murray Aitken, the executive director of the IMS Institute, told Business Insider, but “there’s still a lot of uncertainty about how it will play out in the US.”

That’s because pharmaceutical companies that make the original version of the biologics won’t go down without a fight, reasons Aitken. He predicts there being several lawsuits about proprietary information and patents over the next five years as these issues unfold.

Another factor that will likely keep prices down between now and 2020 is expanding access to medication in emerging markets, such as China and India.

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