The Potential Benefits and Advantages
Biosimilars offer the opportunity for system-wide cost savings
Biosimilars may benefit almost every stakeholder in the health care system. They can reduce costs by offering a lower-cost treatment option and can potentially improve patient outcomes by providing more treatment options. Indeed, the competition fostered by the introduction of biosimilars in the market can benefit patients by providing quality biologic products at more affordable prices.
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:
Developing a biosimilar costs less than a reference biologic. Biosimilars are expected to take 8 to 10 years to develop at a cost between $100 and $200 million,1 compared with an estimate of $2.6 billion for developing a new drug.2 As a result, manufacturers have fewer expenses to recoup, which theoretically allows for biosimilars to have lower list prices.
Biosimilars introduce competition into the health care 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.3
References: 1. Federal Trade Commission. Emerging Health Care Issues: Follow-on Biologic Drug Competition. www.ftc.gov/os/2009/06/P083901biologicsreport.pdf. Accessed December 21, 2018. 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 December 21, 2018. 3. Boccia R, Jacobs I, Popovian R, et al. Can biosimilars help achieve the goals of US health care reform? Cancer Manag Res. 2017;9197-205.