On Friday, the Food and Drug Administration (FDA) approved the first lower-cost copy of a biotech drug in the US for patients undergoing bone marrow transplants or receiving certain forms of chemotherapy.

The approval to Novartis' version of the blockbuster drug Neupogen by the federal health officials could save billions for insurers, doctors and patients and will pave the way for a new market of quasi-generic biotech medicines.

Express Scripts, the country's largest prescription benefit manager, has estimated that the Novartis drug named Zarxio could save the US health system $5.7 billion over the next decade.

Biotech drugs are powerful, injected medicines produced in living cells and are usually much more expensive than traditional chemical-based pills. Neupogen is used to boost blood cells in cancer patients. It has US sales of $839 million last year.

Many newer biotech drugs cost more than $100,000 per year and together account for nearly 30% of all US drug spending. According to IMS Health, biotech medicines are five of the top 10 US drugs by revenue.

These drugs haven't faced generic competition since their introduction in the 1980s as the FDA did not have a system to approve copies. A regulatory pathway was laid out in 2012, to approve so-called ‘biosimilars’, which is the industry term for generic biotech drugs that indicate that they're not exact copies.

Les Funtleyder, health care portfolio manager at ESquared Asset Management, has predicted that now insurers will urge makers of original biologic drugs to lower prices once a biosimilar arrives.

According to a forecast by KPMG Strategy, prices for insulin, human growth hormones, drugs for chemotherapy side-effects and others could plunge 20% to 40% as biosimilars arrive.