AAM Report: Generics and Biosimilars Savings Reach $445 Billion in 2023, Part 1

Generics and biosimilars generated $445 billion in savings in the US by the end of 2023, bringing the total savings for the past 10 years to $3.1 trillion and showcasing the success of expansion policies for these products, according to the new report from the Association for Accessible Medicines (AAM).¹

AAM is a national trade association for manufacturers of generic and biosimilar prescription drugs. Its primary mission is to enhance patient lives by promoting timely access to affordable, FDA-approved generics and biosimilars. The Biosimilars Council, a division within AAM, focuses on fostering a regulatory, reimbursement, and policy landscape that supports increased patient access and adoption of biosimilar therapies. Together, AAM and the Biosimilars Council work to improve access to generics and biosimilars by educating stakeholders and advocating for policies that empower manufacturers to deliver these treatments to patients.

The AAM U.S. Generic & Biosimilar Medicines Savings Report highlighted the value of the generic and biosimilar industry, marking AAM’s 14-year collaboration with the IQVIA Institute. In 2023, generics and biosimilars together accounted for 90% of all US prescriptions, while comprising only 13% of drug spending. In terms of overall health care costs, these medications represented just 1% of total US health care expenditures.

The report comes as the FDA biosimilar approval list approaches 60 (n = 59 approvals as of August 2024), since the first approval for Zarxio (filgrastim-sndz) in March 2015.^2,3 Part 1 of this 2-part series on the report focusses on the overall savings generated by biosimilars and generics. Part 2 will cover the impact these products have had on out-of-pocket costs and policies to ensure lower prices are being passed on to the patient. 

Savings by Plan Type and Drug Type

In 2023, total savings from generic and biosimilar drugs in Medicare amounted to $137 billion, averaging $2,672 per beneficiary. In the commercial market, these savings reached $206 billion. Generic and biosimilar drugs accounted for 90% of all US prescriptions while representing just 13.1% of prescription drug spending and only 1.2% of total US health care spending.

Biosimilars alone generated $12.4 billion in savings in 2023, bringing the total savings since their introduction in 2015 to $36 billion. Since then, patients have benefited from 2.7 billion days of therapy, with an additional 495 million days made possible due to biosimilar competition.

“Even as the generic drug market exhibits increasing fragility, biosimilar medicines continue to demonstrate their promise of lower costs and greater access for patients but are nevertheless struggling to fulfill their potential in the face of brand rebate and patent schemes. Strong and swift legislative and regulatory action to encourage biosimilar competition is vital,” commented Craig Burton, executive director of the Biosimilar Council, in a statement.⁴

Savings by Treatment Space and State

Generic drugs provide significant savings for common conditions and comorbidities. In 2023, generics saved patients with heart disease $118.1 billion and mental health patients nearly $76.4 billion. Patients with cancer benefited from $25.5 billion in savings through generics and biosimilars. States also saw substantial savings, averaging over $8 billion each, with more populous states like California saving nearly $38 billion.

The diabetes space saw $61 billion in savings, and the cancer space saved $25.5 billion through the use of generics and biosimilars. Additionally, savings for allergies and asthma, arthritis, multiple sclerosis amounted to $13 billion, $5.6 billion, and $4.6 billion, respectively. Savings extended to the inflammatory bowel disease space ($2.4 billion), bone diseases like osteoporosis and osteoarthritis ($2.2 billion), and autoimmune diseases ($350 million).

On average, the use of generics and biosimilars saved more than $8 billion per state in 2023, with savings ranging from around $600,000 in Alaska to nearly $38 billion in California. More populous states, which tend to have higher health care costs, also experienced greater savings through the widespread use of generics and biosimilars. These cost reductions are crucial for managing expenses in states with larger patient populations.

The authors wrote, “Generic and biosimilar medicines…are expanding patient access, making life-savings medicines more affordable for patients, enabling patients to better adhere to their therapies, and ultimately saving lives. But the continued savings achieved through use of lower-cost generics and biosimilars can no longer be taken for granted. The long-term outlook for generic and biosimilar competition hinges on addressing the barriers to development and adoption and, ultimately, sustainability of this vital industry. Without action to strengthen the generic and biosimilars markets, many of these lower-cost medicines may disappear, and patients' access to care will suffer.”

References

1. The U.S. generic & biosimilar medicines savings report: September 2024. AAM. September 6, 2024. Accessed September 16, 2024. https://accessiblemeds.org/sites/default/files/2024-09/AAM-2024-Generic-Biosimilar-Medicines-Savings-Report.pdf?_ga=2.26519412.852721147.1725487448-1012601349.1713223936

2. Biosimilar product information. FDA. Updated August 26, 2024. Accessed September 13, 2024. https://www.fda.gov/drugs/biosimilars/biosimilar-product-information

3. FDA approves first biosimilar Zarxio^TM (filgrastim-sndz) from Sandoz. Sandoz. Press release; March 6, 2015. Accessed September 13, 2024. https://www.novartis.com/news/media-releases/fda-approves-first-biosimilar-zarxiotm-filgrastim-sndz-from-sandoz

4. Generic and Biosimilar Medicines Save $445 Billion in 2023. AAM. Press release; September 5, 2024. Accessed September 16, 2024. https://www.accessiblemeds.org/resources/press-releases/generic-and-biosimilar-medicines-save-445-billion