Biosimilars matter because they introduce competition into a drug market that has historically had none. Biologic drugs, the complex protein-based medicines used to treat cancer, autoimmune diseases, and other serious conditions, are among the most expensive therapies in modern medicine. A single biologic can cost tens of thousands of dollars per year, and for decades, many had no competitors. Biosimilars change that equation, and the financial impact is already enormous: an estimated $12.4 billion in savings to the U.S. healthcare system in 2023 alone.
What Biosimilars Actually Are
Biologic drugs are made from living cells, which makes them far more complex than traditional pills synthesized through chemical reactions. Because of that complexity, you can’t make an exact copy the way you can with a generic version of aspirin or ibuprofen. Instead, a biosimilar is a product that is “highly similar to the reference product notwithstanding minor differences in clinically inactive components,” as the FDA defines it. Those minor differences cannot produce any clinically meaningful change in safety, purity, or potency.
To earn approval, biosimilar manufacturers must run extensive analytical and structural studies comparing their product to the original. These studies examine everything from the protein’s primary structure and bioactivity to its receptor binding, purity, stability, and how it behaves in living organisms. The FDA evaluates all of this evidence together, using what it calls a “totality-of-the-evidence approach.” The bar is high: the goal is to confirm the biosimilar works the same way as the original in every way that matters to patients.
Driving Down Drug Prices
The core reason biosimilars matter is cost. When a biologic drug has no competition, there is no market pressure to lower its price. Biosimilars create that pressure. The Association of Accessible Medicines estimates that biosimilars have saved the U.S. healthcare system $36 billion since 2015. Those savings are accelerating. Over the next five years, cumulative savings are projected to reach $181 billion, more than four times the $40 billion saved in the previous five years, as new biosimilars launch and existing ones gain wider use.
The savings extend well beyond what insurance companies and government programs pay. When the overall cost of a treatment class drops, it can free up budget for health systems to cover additional therapies or expand access to patients who were previously priced out. In Australia, researchers found that 12 months after a biosimilar entered the market, total spending on the original biologic dropped by 38.3%, even as overall use of the therapy continued to grow slightly. That pattern, spending goes down while patient volume stays stable or rises, is the clearest sign that biosimilars are working as intended.
More Patients Getting Treatment
Lower prices don’t just save money in the abstract. They translate into real treatment for real people. Since 2015, biosimilar competition in the U.S. has been associated with 495 million incremental days of patient therapy, meaning courses of treatment that likely would not have happened at the original drug’s price point. For conditions like cancer and rheumatoid arthritis, where biologic therapy can be the difference between disease progression and remission, expanding access has direct consequences for health outcomes.
Oncology and autoimmune diseases are the two therapeutic areas where biosimilars have made the biggest inroads. In cancer treatment, biosimilar versions of bevacizumab (used in colorectal, lung, and other cancers) now account for 75.1% of that molecule’s total U.S. market. Biosimilar trastuzumab, used in breast cancer, holds a 71% share. In autoimmune conditions, biosimilar infliximab (used for Crohn’s disease, ulcerative colitis, and rheumatoid arthritis) has captured 45.4% of its market. These are not niche products. They have become the standard of care for millions of patients.
The U.S. Still Lags Behind Europe on Price
Despite growing adoption, the U.S. pays significantly more for biosimilars than other countries. Monthly treatment costs for biosimilars in the U.S. are roughly twice as high as in Germany and nearly three times as high as in Switzerland. That gap exists because European countries use more comprehensive systems for negotiating drug prices, while the U.S. relies on a fragmented patchwork of insurers, pharmacy benefit managers, and hospital systems.
There is a bright spot: biosimilar market share in the U.S. is growing faster than in Germany or Switzerland. The trajectory suggests that once biosimilars gain a foothold in a given market, adoption accelerates. But higher prices mean the U.S. captures less savings per patient treated than it could. Policy changes aimed at reducing anticompetitive practices, like exclusionary contracts that block biosimilar entry, could close some of that gap.
How Substitution Works at the Pharmacy
Not all biosimilars can be swapped in at the pharmacy counter. To be substituted without a new prescription from your doctor, a biosimilar needs to earn a special “interchangeable” designation from the FDA. As of now, 13 biosimilars have received interchangeable status. Notably, nine of those were approved without requiring additional switching studies, where patients alternate between the original and the biosimilar to confirm no adverse effects. The FDA’s position has evolved: it now considers that modern analytical tools can evaluate similarity with enough precision that switching studies are generally unnecessary.
At the state level, the rules add another layer. Most states have passed laws governing biosimilar substitution, and while the specifics vary, common provisions include requiring that your prescriber be notified of any switch, that you as the patient are informed (and in some states, give consent), and that records are kept. Your doctor can always block a substitution by writing “dispense as written” on the prescription. Several states, including Colorado, Georgia, Illinois, North Carolina, and Texas, require that any substituted product be the lowest-cost option for the patient.
New Biosimilars on the Horizon
The biosimilar pipeline is expanding into some of the best-selling drugs in medicine. The first biosimilar for Stelara, a blockbuster treatment for psoriasis and Crohn’s disease, launched on January 1, 2025. Biosimilar versions of Prolia and Xgeva, both used to treat bone loss and bone complications from cancer, were approved in March 2024 with launches expected in mid-2025. Each of these represents billions of dollars in current U.S. spending, meaning the potential for savings and expanded access is substantial.
High-demand therapeutic areas like oncology and autoimmune diseases continue to attract the most biosimilar development, which makes sense: large patient populations and high per-patient spending create both the incentive for manufacturers and the opportunity for system-wide impact. As more biologics lose patent protection over the next several years, the cumulative effect of biosimilar competition will reshape the economics of treating some of medicine’s most serious and costly conditions.