What is a Value Added Medicine

A Value Added Medicine (VAM) is an innovative drug product that significantly improves an existing, approved medicine by enhancing its therapeutic value, safety, or patient experience. VAMs leverage known compounds to create smarter, better treatments. This innovation typically involves reformulating the drug (e.g., changing a tablet to a long-acting injection for better compliance), repurposing it for a new use, or developing a biosimilar (a highly similar, high-quality version of a complex biologic). By utilizing the FDA's efficient regulatory pathways, VAM developers bring crucial enhancements to market faster and at a lower cost than discovering entirely new compounds.

Why VAMs are Essential to U.S. Healthcare

VAMs are a vital pillar of the healthcare system, bridging the gap between expensive new chemical entities and simple generics. Their importance lies in their ability to directly solve critical, real-world treatment problems: they increase patient adherence (e.g., easier dosing means better health), improve safety profiles, and generate substantial economic value for the healthcare system. By maximizing the utility of proven molecules, VAMs drive targeted, low-risk innovation that reduces overall treatment costs and delivers superior outcomes for patients, providers, and payers across the country.

505(b)(2)

A 505(b)(2) product is a type of New Drug Application (NDA) pathway s[ecoified under the U.S. Federal Food, Drug, and Cosmetic Act that allows applicants to rely on the FDA’s previous findings of safety and/or effectiveness for an existing approved drug and/or on data not developed by the applicant (e.g., published literature). This pathway is typically used for repurposed or reformulated medicines—drugs that are not entirely new chemical entities but are not simple generics either. Examples include a new dosage forms, new indications, a new combination of two already approved drugs, or a change in strength. This pathway encourages innovation by providing a more efficient, lower-cost development route compared to a traditional NDA, allowing developers to bring valuable enhancements and improvements to patient care faster.

Biosimilars

A biosimilar is a biological product that is highly similar to, and has no clinically meaningful differences from, an existing FDA-approved reference biological product. In the United States, biosimilars are approved through a specific regulatory pathway (351(k) under the Public Health Service Act) that requires extensive testing to demonstrate similarity in structure, function, and efficacy to the reference product. Because biological products are made from living sources, they cannot be copied exactly like traditional small-molecule generics; hence, they are "highly similar," not identical. The introduction of biosimilars is crucial to the U.S. healthcare system as it creates competition for expensive innovator biologics, increasing patient access to life-saving treatments for conditions like cancer and autoimmune diseases while driving substantial cost savings.