In a major step forward for Novartis'
Novartis took the FDA to court to force the agency's decision on the drug in question, known as Omnitrope. Despite clearing the medicine, the FDA was quick to point out that the approval does not establish a pathway for true biogenerics. Instead, the agency is calling Omnitrope a "follow-on protein product" with enough similarity to marketed products that it can be approved based on what is known about those previous products. The agency noted that it is not rating Omnitrope as therapeutically equivalent to approved human growth hormone products.
From a practical standpoint, though, Omnitrope is likely to be treated by physicians as a substitute for branded products. The sales potential is substantial, especially since the drug has been approved in Europe as well. Pfizer's
It's also clear that Novartis is not done pushing the biogenerics envelope. The company has five more unspecified "biosimilar" medicines in different stages of development. And with biologics playing a bigger part in raising the nation's drug bill, the company will likely have lots of allies in its crusade to bring cheaper versions of such medicines to the market. With Omnitrope now approved, it's looking increasingly likely that Novartis will get its way on biogenerics, and that's good news for the company's investors.
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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.