* Approval of first U.S. biosimilar drug imminent

* FDA set to decide on approval of Novartis' Zarxio

* EU experience shows wide variation in biosimilar use

* Tender, quota systems key to price and uptake

By Ben Hirschler and Deena Beasley

LONDON/LOS ANGELES, March 6 (Reuters) - A revolution is brewing in healthcare with lower-cost copies of complex biotech drugs finally set to reach the United States, nine years after so-called biosimilars were launched in Europe.

The potential for copycats to take business from original biotech brands is grabbing investors' attention and was a key factor in Pfizer's recent move to buy injectable drugmaker Hospira for about $15 billion.

The first approval for a biosimilar in the United States is expected imminently - Zarxio, Novartis' copy of Amgen's white blood cell-boosting product Neupogen.

But Europe's experience shows the economics of biosimilars can be unpredictable.

The conventional wisdom has been that such copycats, which are still far more difficult to make than standard chemical drugs, will sell at a modest discount of perhaps 20 to 30 percent to the original biotech brands.

Yet when Norway's drug procurement agency held its latest national hospital tender in January for a biosimilar copy of Johnson & Johnson and Merck's Remicade it was offered a whopping 69 percent discount to the original brand.

The decision to slash the price was made by Orion Pharma , which distributes the biosimilar known as Remsima in Norway for South Korea's Celltrion.

Both Remsima and Remicade, which is forecast to be the world's second-biggest drug this year with sales of more than $9 billion, contain the antibody infliximab for rheumatoid arthritis and Crohn's disease.

Orion's move raises questions about the economics of biosimilars and the competitive threat they pose to originator companies - as well as the profit margins they offer to companies making them.

An Orion spokeswoman said the deep discount reflected the "tough pricing competition" in the Nordic region.

MEGABUCKS AT STAKE

As an early adopter, Norway is a biosimilars test-bed and Remsima is particularly important as the first copy of an antibody drug, while Norway's tender system makes it especially price-sensitive.

Norwegian doctors have cheered the low price, which frees up resources to treat more patients or pay for other newer medicines, such as cancer immunotherapy.

"Our experience has been very good," said Jorgen Jahnsen, professor of medicine at the University of Oslo, who has treated around 80 patients with Remsima since January 2014 and believes it works just like Remicade.

"Other countries may not achieve the same price reduction as in Norway but it can still be significant," he added.

With a population of only 5 million, Norway is a minnow in the global pharmaceuticals marketplace.

The megabucks are at stake in larger European nations like Germany, France and Britain, countries where Remsima was launched last month, and in the United States.

Express Scripts, the biggest U.S. manager of pharmacy benefits, predicts competition to Remicade and 10 other big biotech drugs could save the United States $250 billion over the next decade.

And Steve Miller, the firm's chief medical officer, reckons that's conservative, since discounts could be larger than the 30 percent his company has assumed, while new competitors could force originators to discount their prices.

He sees biosimilars acting like conventional generic drugs in driving down costs and creating financial headroom for new medicines.

Americans have been using standard generic drugs - exact copies of drugs with expired patents - for 30 years. But the regulatory pathway for biosimilars, which are made in living cells and can never be exact replicas of originals, was only established by healthcare reform in 2010.

FDA DECISION

The U.S. Food and Drug Administration (FDA) is due to give its verdict by March 8 on Zarxio, made by Novartis' generics unit Sandoz. A green light is expected after it won unanimous backing from an FDA panel in January.

The arrival of biosimilars threatens companies heavily reliant on biotech drugs, like AbbVie and Roche , and Citigroup predicts a transfer of at least $110 billion of value from innovator companies to copycat producers in the next decade.

Some big pharma companies, like Pfizer and Amgen, are hedging their bets with plans to produce their own biosimilars.

The big unknown is how quickly biosimilars will be adopted in clinical practice.

Europe's experience suggests that take-up hinges on the stance of governments and insurers.

A analysis published in October by consultancy IMS Health found biosimilar penetration in Europe ranged from 1 percent to 99 percent across different products and markets, depending on whether countries had prescription quotas for biosimilar drugs, tenders or other mechanisms to encourage use.

Key U.S. unknowns include the FDA's stance on naming biosimilars on pharmacy lists, questions over the extrapolation of a drug's use to multiple diseases, and the extent to which states will allow any prescription switching.

There are also legal challenges, with Amgen seeking an injunction to block the launch of Zarxio, while a crucial FDA panel to consider Remsima was recently postponed.

"We hope that there is not a problem with the application," said Express Scripts' Miller. "The sooner we can get these great new products to the marketplace, the sooner Americans can enjoy the same savings Europeans have been enjoying."

(Editing by Pravin Char)