Health care in the United States sits at the crux of a frustrating truth; it is the home of some of the newest and best forms of treatment and services that are saving countless lives, but it is also exorbitantly expensive in a way that is simply unsustainable for our economy and for patients. For decades, the U.S. has shouldered the burden of expense for the rest of the world’s continually developing health care practices, and the strain is showing. We must take a careful look at where changes can be made that will reduce costs without impacting the quality of care we provide. An easy starting point where the Trump administration has already shown leadership is supporting the increased uptake of biosimilars.
Like generic drugs in the small molecule space, biosimilars are the more affordable versions of biologic medications that have already been approved by the U.S. Food and Drug Administration (FDA). Biosimilars have no clinically meaningful differences from the original medication and are made available for physicians to prescribe to patients once the brand name version of the medicine has gone off patent. They’ve been around for just over a decade and have been increasing in popularity — for good reason. Biologic medications are truly breakthrough therapies for people suffering from diseases like cancer, kidney disease and a range of autoimmune diseases to name a few and represent the future of medicine. However, they can be costly and currently make up nearly fifty percent of annual drug spending, even though they only account for only about 2% of prescriptions.
Since they were introduced into the marketplace thirty years ago, generics have brought down the prices of medications by eighty to eighty-five percent, according to the FDA. In terms of dollar savings, from the years 2002-2019 alone, generic drugs saved the U.S. healthcare system nearly $2.2 trillion. Biosimilars are posed to do the same if we can remove the barriers that are hindering the kind of broad access that we see in the generics space.
In 2023, U.S. health care spending reached $4.9 trillion, costing the average American roughly $15,000 per person. Biosimilars, on average, are priced 30 percent lower than their name-brand counterparts. Over the past ten years, biosimilars have saved the U.S. health care system north of $56 billion, with the potential to save an additional $181 billion in the next five years. And a recent IQVIA study showed that there are one hundred biologics set to go off patent in the next decade and yet only twelve have a biosimilar in development due to the costs associated with developing and approving these products and then the challenges they face in gaining market access.
There are a number of approaches the federal government could take to increase their support for biosimilars – support that the administration has already affirmed in an executive order signed in April of 2025 – including passing comprehensive Pharmacy Benefit Manager (PBM) reform to address the incentives driving PBMs to require patients to receive the product that provides the higher rebate versus cost savings for patient and the government. Fortunately, momentum continues to build for PBM reform which also has the backing of the administration so real reforms could benefit our system soon.
There are currently several efforts underway to find areas of efficiency and savings within our regulatory agencies such as the FDA. We should also consider how to increase efficiencies within the development and approval process to encourage more biosimilar options.
Biosimilars are the future of medicine – they are often at the most cutting edge of their biologic counterparts and offer a huge revenue opportunity of the U.S. economy. With a combined focus of removing unnecessary barriers to access to incentivize greater investment in the continued development of biosimilars, we are in a position to generate a lot of economic growth for the U.S. economy while also saving the healthcare system billions of dollars. The reasons to support biosimilars are many, but the best reason is offering patients greater access to the health care they need.
