Biosimilars may benefit almost every stakeholder in the healthcare system. They can reduce costs by offering a lower-cost treatment option and provide more treatment options for patients. Indeed, the competition fostered by the introduction of biosimilars in the market can benefit patients by providing quality biologic products at more affordable prices.1
The introduction of biosimilars creates opportunities for cost savings for payers, employers, state and federal governments, and patients, compared with the reference products. These opportunities are based on two factors:2-4
Developing a biosimilar costs less than a reference biologic. Biosimilars are expected to take 8 to 10 years to develop at a cost between $100M and $200M, compared with an estimate of $2.6B for developing a new drug. As a result, manufacturers have fewer expenses to recoup, theoretically allowing for biosimilars to have lower list prices.
Biosimilars introduce competition into the healthcare system. As the number of treatment choices increases for a particular disease or condition, manufacturers are incentivized to reduce the prices of their products to maintain or increase market share.
The introduction of competition from biosimilars may also create downward pressure on reference product prices—leading to even greater spending reductions.5
References: 1. The Biosimilars Council. Biosimilars in the United States. http://biosimilarscouncil.org/wp-content/uploads/2019/03/Biosimilars-Council-Patient-Access-Study.pdf. Accessed October 29, 2019. 2. Dolinar RO. Biosimilars are not generics. Endocrine Today. www.healio.com/endocrinology/practice-management/news/print/endocrinetoday/%7Bfd6accbd-a927-467b-ba5e-4f8796327816%7D/biosimilars-are-not-generics. Accessed October 29, 2019. 3. Federal Trade Commission. Emerging health care issues: follow-on biologic drug competition. www.ftc.gov/os/2009/06/P083901biologicsreport.pdf. Accessed October 29, 2019. 4. US Food and Drug Administration. Biosimilars action plan: balancing innovation and competition. July 2018. 5. Boccia R, Jacobs I, Popovian R, et al. Can biosimilars help achieve the goals of US health care reform? Cancer Manag Res. 2017;9:197-205.