White blood cells (seen here in a rendering) can be boosted by the newly approved biosimilar drug. Shutterstock US regulators on Friday gave a green light to sales of the country's first copied version of a biotechnology drug, or "biosimilar," with approval of Novartis' white blood cell-boosting Zarxio.

The Affordable Care Act provided a pathway to approval for such drugs, which are cheaper approximations of complex, extremely expensive pharmaceuticals that are made from living things. Biosimilars have the potential to save the healthcare system billions, according a RAND Corporation analysis.

Jason Millman of The Washington Post explains why we don't see generics of some of these newer, often astronomically expensive drugs, called "biologics:"

Biologics are more complex than traditional drugs made from synthetic chemicals. They're made from living organisms, so they can't be exactly replicated by another product. Instead, the biosimilar manufacturer has to prove that its copycat product is similar enough in safety and effectiveness.

Even though biosimilars are not as deeply discounted as traditional generics, for patients with complex diseases like arthritis and some cancers, Millman notes, they stand to "save thousands of dollars" if biosimilars become available for the biologics they are treated with.

Pharmaceutical companies see biosimilars as a major opportunity — a fresh stream of revenue when the patents on these newer drugs out. The approval of a biosimilar in the US though also means the companies that have developed profitable biologics could soon face potential competition for the first time. "Innovative biotechnological companies have been enjoying bonanza times since the biodrug discoveries of the 1990s," researchers wrote in the journal Pharmaceuticals. "However, the market value captured by these companies is under threat due to the imminent biologics patent cliff."

When researchers first started developing biosimilars, "companies with the original patents initially resisted, arguing that their drugs were so complex that it was not possible to make an exact copy," The New York Times noted. "But that position eventually became untenable."

Swiss drugmaker Novartis' logo is seen behind scaffolding at a plant in the northern Swiss town of Stein February 4, 2015. REUTERS/Arnd Wiegmann

The US is expected to see many more drugs that follow this route, but Zarxio is the first such biosimilar approved here. Several pharmaceutical companies are now racing to develop biosimilar versions of some of the top-selling biologics, according to Ronny Gal, a senior analyst at Bernstein. There are already four applications for the approval of biosimilars in the pipeline, an FDA spokesperson confirmed to Business Insider.

The new drug contains the same active ingredient as Neupogen, or filgrastim, which logged 2014 worldwide sales of $1.2 billion for manufacturer Amgen. It helps patients undergoing cancer treatment fight off infections.

The FDA said it approved Zarxio for treating the same five conditions for which Neupogen is used.

The move had been expected after Zarxio, which is made by Novartis' generics unit Sandoz, won unanimous backing from an FDA panel in January. The drug has already been sold as Zarzio in Europe, but it's not yet known when it will become available to patients in the US or how much it will cost. Novartis is awaiting the results of a court challenge from Amgen, The Wall Street Journal reports.

(Reporting by Ben Hirschler. Editing by Jane Merriman)

This story was updated to add additional context.