Thanks to a landmark ruling by the US Food and Drug Administration, the market is now wide open for drugs that are biochemically similar to biotech drugs. Biotech drugs are some of the most expensive drugs on the market. Many of them cost thousands of dollars every single month. In fact, some drugs cost up to a hundred thousand dollars for an annual supply. That is how crazy the pricing is in the biotech drug space. A lot of this sky-high pricing is justified by the fact that the biotech companies behind these drugs spent hundreds of millions, if not billions of dollars, to get them to market. However, the fact remains that they are instrumental in skyrocketing US healthcare costs.
The price of healthcare in the United States has been a political hot potato. It doesn’t really matter which side of the fence you fall on. We can all agree that the price of healthcare services and pharmaceutical drugs in the United States is out of control compared to other developed economies. This is why there is a huge demand for biosimilar compounds. These are drugs that were made using processes involving living cells. These drugs are normally very expensive.
The good news is that the US Food and Drug Administration’s new policy of allowing more biosimilars into the market is sure to get a lot of investor attention. This should be a very hot market for investors to pay attention to. Look for biotech stocks that are looking to create “generic” versions of top-selling biotech drugs using cellular processes. There is a lot of room for growth in this market because biosimilar drug sales constitute less than 1% of the total $170 billion biotech medicine global market. Look for smaller stocks that are looking into building processes that produce drugs that have the same features as hot-selling biotech drugs.
