Americans Say Drug Costs Are Too High, and They Are Right

Eight in 10 Americans say prescription drug costs are unreasonably high. Biosimilars are critical to decreasing these costs. Biosimilars are effective, lower-cost treatments that could alleviate the drug cost burden for millions of Americans. Policymakers and regulators should prioritize biosimilars to help patients achieve the full cost-saving potential of these treatments.

Biosimilars are FDA-approved, lower-cost biologic medicines that have the same safety and efficacy as their reference counterparts. Biosimilars are used to treat many chronic, life-threatening conditions, including cancer, diabetes, Crohn disease, arthritis, macular degeneration, and more. The approval pathway for biosimilars was established by the 2010 Biologics Price Competition and Innovation Act (BPCIA), within the Affordable Care Act (ACA), leading to the first biosimilar Zarxio approved in 2015 in the United States.

Biosimilars are projected to reduce drug costs by $133 billion in the United States by 2025. In addition to being a lower-cost treatment to brand biologics, biosimilars also lower the cost of other biologics. In fact, a 2021 study found the average price of brand biologics was estimated to be 56% higher without biosimilar competition—and up to 150% higher for some cases. For example, the average sales price (ASP) of the brand biologic Remicade was projected to be 150% higher in the absence of biosimilars, but the competition from biosimilars Inflectra, Renflexis, and Avsola lowered Remicade’s price. In total, biosimilars make up only about 20% share of the accessible biologic market. As this market share increases, so will the cost-savings for patients, providers, and payers.

Policies supporting the adoption of biosimilars are necessary to achieve the full cost savings these treatments can provide. For example, officials should reduce or eliminate out-of-pocket costs for Medicare Part B patients taking a biosimilar through a zero-co-pay policy. This policy would lower costs for patients and has widespread support among patient groups. In fact, more than a dozen US patient groups signed onto a letter to federal health care officials supporting a zero copay policy last year.

Another policy that has proven to support biosimilar adoption in the US and Europe is a shared savings model, which has been particularly successful in the oncology market. In a shared savings model, the savings gained from adopting lower cost biosimilars are shared with the provider and the patient. The Forum recommends policy makers expand the use of shared savings programs to additional therapeutic areas that have biosimilars, ophthalmology, inflammatory diseases, diabetes and other conditions.

Physicians and providers can also be supported through an increased add-on payment for a lower-cost biosimilar. Specifically, increasing the incentive from ASP+6% of the biosimilar to ASP+8% for a period of 5 years would help increase adoption. Twenty-eight health care groups - both patient and provider organizations-signed a letter to US Reps. Schrader and Kinzinger last year supporting this bipartisan policy initiative.

The continued slow market growth for US biosimilars increases the need for federal action, as the cost savings from biosimilars can support patient access and lower drug costs. Biosimilars can also help open the door for the future’s new and innovative treatments. Policymakers and regulators must prioritize biosimilars and create policies that increase their adoption.

Author Information

Juliana M. Reed is the executive director of the Biosimilars Forum. Prior to serving as executive director, Reed served as the Biosimilars Forum president for more than eight years and was one of its original co-founders. Email: juliana@biosimilarsforum.org