The European Medicine Agency (EMA) has recommended approval of Abasria, Eli Lilly's biosimilar version of Sanofi's insulin glargine sold as Lantus. This means that the French drugmaker's $8 billion-a-year diabetes treatment will face a cheaper rival from 2015.

The regulators' move to allow the Lilly drug marketed in Europe by Boehringer Ingelheim promises to cut the cost of treatment.

Biosimilar versions of drugs such as Epo, used to boost red blood cells, and human growth hormone, for treating certain growth abnormalities, have been available for several years, while the first antibody-based biosimilar, for rheumatoid arthritis, was approved in Europe last September.

The evolution of such medicines represents a long-term challenge to makers of complex biological drugs, which are given by injection and have been largely immune to generic competition up until now.

Industry analysts expect Lilly's version of insulin glargine to be priced significantly lower than Lantus, in order to attract patients and healthcare providers.

Enrique Conterno, president of Lilly's diabetes division, said his company's product would provide "an important new option for the millions of patients in the EU who need basal insulin to help manage their diabetes."

Lantus currently dominates the market, outselling a rival treatment called Levemir from Denmark's Novo Nordisk.

The EMA, which announced its recommendation on Friday at the end of a monthly meeting of experts in London, said clinical studies had shown Abasria to have a comparable quality, safety and efficacy profile to Lantus.

The positive recommendation from the agency's Committee for Medicinal Products for Human Use (CHMP) will now go to the European Commission for final approval, but Lilly will not be able to launch immediately as Sanofi still has patent protection.

Lilly is expected to start rolling out the drug for type 1 and type 2 diabetes from around the middle of next year, after the Sanofi patent expires in May.

Although a challenge for Sanofi, analysts told the news agency Reuters that the financial impact of European approval of biosimilar Lantus would be limited as Europe accounted for only 14 % the product's global sales of €5.7 billion last year. The US market accounts for two-thirds of sales.

Sanofi is also developing an improved successor to its long-running cash cow. This follow-on, Toujeo, could also be ready for launch in mid-2015 and the French drugmaker is expected to work hard to shift patients on to the new medicine.

The EMA said a pharmacovigilance plan would be implemented for Lilly's product as part of its marketing authorisation.