What is a Biosimilar?

The pharmaceutical industry is constantly evolving. It is crucial to keep an eye on the pulse of the latest advancements. One area that has been rapidly evolving is the development and approval of biosimilars. So, what are biosimilars and why do they matter?

The Basics

Biosimilars are biologic drugs that, as the name suggests, are highly similar to an FDA approved brand-name biologic or “Reference Product.” Biologic drugs are complex molecules developed in living organisms. This leads to a complex manufacturing process. Unlike the development of generic drugs for non-biologic medications, biosimilars do not require a specific recipe that must be followed during production.

To be approved by the FDA, a biosimilar must be made from the same type of living organism as the reference product and exhibit no clinically meaningful differences in safety and efficacy. It must provide the same treatment outcomes, have a similar side effect profile and be given at the same dosage and frequency. Generally, biosimilars cost significantly less than their brand-name counterparts.

Here are a few examples of biosimilar drugs that have launched over the past few years:

Biosimilar Impacts

Biosimilars are flooding the market and as a result, creating significant savings opportunities for employers and employees alike. As of the end of 2022, the FDA had already approved 45 biosimilars across 14 products, with 30 of those products already launched in the marketplace.

The number of biosimilar approvals and upcoming launches is growing at an exponential rate. For instance, in 2023 alone, we can expect more than 9 biosimilar products for Humira® (adalimumab) to be introduced. Furthermore, in the next five years, approximately 10 other products will face biosimilar competition for the first time, resulting in projected savings exceeding $180 billion.

Like generic medications, biosimilars create competition for the original brand biologic products, leading to a reduction in prices.

Once multiple biosimilars are available in the market, the competitive landscape drives prices significantly lower, often ranging from 50% to 85% less than the original biologic drug.

Industry Outlook

At present, most biosimilars are available for medications that are administered in a medical setting and fall under the medical benefit category. However, with the anticipated release of Humira® biosimilars in 2023, there will be a surge in the utilization of biosimilars under the pharmacy benefit. It becomes increasingly important for organizational decision makers to understand how their Pharmacy Benefit Managers (PBMs) manage biosimilar coverage on their formulary.

Biosimilars have emerged as a game changer in the pharmaceutical industry. With their potential to drive down costs while maintaining comparable safety and efficacy to the reference products, biosimilars open new possibilities for affordable treatment options.

By keeping a close eye on the biosimilar landscape and understanding your PBM’s approach to biosimilar coverage, you can navigate this evolving market and make informed decisions that benefit your organization and its members.