How to Understand Biosimilars and Their Cost Implications

How to Understand Biosimilars and Their Cost Implications
  • Feb, 7 2026
  • Daniel Remedios
  • 9 Comments

When you hear the word biosimilars, you might think they’re just generic versions of expensive biologic drugs. But that’s not quite right. Biosimilars aren’t chemically identical copies like the pills you pick up at the pharmacy. They’re complex medicines made from living cells - yeast, bacteria, or animal tissue - and even tiny changes in how they’re made can affect how they work. Still, they’re designed to work just like the original biologic, and they’re saving patients and the healthcare system a lot of money.

What Exactly Are Biosimilars?

A biosimilar is a biologic medicine that is highly similar to an already approved reference product. The U.S. Food and Drug Administration (FDA) requires manufacturers to prove, through thousands of lab tests and clinical studies, that there are no clinically meaningful differences in safety, purity, or potency. That means if you’re being treated for rheumatoid arthritis, Crohn’s disease, or cancer with a biologic like Humira or Enbrel, a biosimilar will deliver the same results.

Unlike traditional generics - which are simple chemical copies of small-molecule drugs - biosimilars can’t be exact duplicates. The manufacturing process involves living organisms, and even minor changes in temperature, pH, or cell culture conditions can create small differences. But these differences aren’t harmful. The FDA’s approval process is strict: it looks at the molecule’s structure, how it behaves in the body, how the immune system reacts to it, and whether it works the same way in real patients.

The first biosimilar approved in the U.S. was Zarxio, a copy of filgrastim (used to boost white blood cells after chemotherapy), cleared by the FDA in 2015. Since then, 45 biosimilars have been approved, covering treatments for cancer, autoimmune diseases, and diabetes. The European Medicines Agency (EMA) approved its first biosimilar back in 2006, and over 16 years of real-world use have shown no unexpected safety issues.

How Do Biosimilars Save Money?

Biosimilars don’t slash prices the way generics do. While generics often cut costs by 80-85%, biosimilars typically start at 15-30% lower than the reference product. That might not sound like much, but when you’re talking about drugs that cost $7,000 a month - like Humira - even a 25% reduction means $1,750 saved per patient, per month.

In 2023, when the first Humira biosimilars hit the market, their list prices were around $5,054 - 28% lower than Humira’s $7,000. That’s not just a discount; it’s a game-changer for patients paying out-of-pocket or for insurers covering thousands of users. The Express Scripts 2023 Drug Trend Report showed that biosimilars for infliximab (Remicade) captured 72% of new prescriptions within 18 months of launch, meaning most new patients are now starting on a cheaper version.

But here’s the catch: list price doesn’t always equal what you pay. Pharmacy benefit managers, insurers, and drug manufacturers often negotiate rebates and discounts behind closed doors. That’s why some patients don’t feel the savings right away - their insurance might still be covering the brand-name drug at a high copay. The Inflation Reduction Act of 2022 changed that for Medicare Part D: starting in 2024, biosimilars will cost patients just 25% of the price, same as generics. That’s a big step toward making savings real.

Are Biosimilars Safe and Effective?

Yes. Over 10,000 patients have been studied in clinical trials comparing biosimilars to their reference products. A landmark study called NOR-SWITCH, published in The Lancet in 2016, followed over 500 patients with inflammatory diseases who switched from a reference biologic to a biosimilar. After 52 weeks, there was no increase in side effects, loss of effectiveness, or immune reactions.

Dr. Gary Lyman, a cancer specialist at Fred Hutchinson Cancer Research Center, reviewed dozens of these studies and concluded in a 2022 JAMA Oncology editorial that biosimilars have proven equivalent in efficacy and safety. The FDA states plainly: “Biosimilars are as safe and effective as their reference products.”

Even patient surveys back this up. The Arthritis Foundation surveyed 1,200 people using biosimilars in 2022. Eighty-seven percent said they noticed no difference in how well the drug worked compared to the original. Seventy-two percent reported lower out-of-pocket costs. Only 28% had initial concerns - and most of those were eased after talking with their doctor.

On Drugs.com, patients reviewing Renflexis (a biosimilar to Remicade) gave it 4.2 out of 5 stars. Common comments: “Same effectiveness as Remicade but half the cost.” The top Reddit thread on r/rheumatology had a rheumatologist with 2,500+ karma explain: “The science supports biosimilars, but we must address patient concerns through education - I spend 10-15 minutes per patient explaining the evidence.”

Doctor explains cost difference between brand-name drug and biosimilar syringes to a smiling patient.

Why Aren’t Biosimilars Used More?

Despite the evidence, adoption isn’t uniform. In Europe, biosimilars capture over 80% of the market for drugs like filgrastim. In the U.S., it’s closer to 65% for some drugs and as low as 28% for others. Why the gap?

One reason is patent litigation. Drugmakers use legal tactics - called “product hopping” - to delay biosimilar entry. For example, when Enbrel’s patent was set to expire, the manufacturer released a new version with a different delivery device. That reset the clock on exclusivity and pushed biosimilars back by years.

Another barrier is payer policies. Some insurance plans automatically favor the brand-name drug because they get a bigger rebate from the manufacturer. Even if a biosimilar is cheaper, the insurer might not switch unless forced to. A 2022 survey of 350 oncologists by the American Society of Clinical Oncology found that 78% needed extra training to feel confident prescribing biosimilars - mostly because they were confused by coverage rules.

Also, not all biosimilars are created equal. The FDA has two categories: “biosimilar” and “interchangeable.” Only six products had the interchangeable designation as of late 2023. An interchangeable biosimilar can be substituted at the pharmacy without the prescriber’s approval - just like a generic. But most biosimilars still require a doctor’s OK to switch. Forty-eight U.S. states have laws governing substitution, and rules vary widely. Some require the pharmacist to notify the prescriber; others require written consent from the patient.

What’s Next for Biosimilars?

The pipeline is full. Seven biosimilar applications for Stelara (ustekinumab), a $10,000-a-year drug for psoriasis and Crohn’s, are under FDA review. When they launch, they could save the system billions. The Congressional Budget Office projects that by 2030, biosimilars could save U.S. healthcare $150 billion a year - if market barriers are removed.

Also on the horizon are “biobetters” - next-generation biologics designed to be better than the original. These aren’t biosimilars; they’re improved versions with longer-lasting effects or fewer side effects. They’ll compete with both the original and biosimilars, adding more complexity - and more options - to the market.

The global biosimilars market was worth $9.3 billion in 2022 and is projected to hit $33.3 billion by 2028. That growth will come from new approvals, expanded use in developing countries, and better reimbursement policies.

FDA shield protects patients receiving biosimilars while patent barriers are pushed aside by a rising savings arrow.

What Should You Do as a Patient?

If you’re on a biologic drug and your doctor suggests switching to a biosimilar, ask questions:

  • Is this biosimilar approved as interchangeable?
  • Has it been used in patients like me?
  • Will my insurance cover it at a lower cost?
  • What happens if I switch back?

Don’t assume biosimilars are riskier. The data says otherwise. But do demand transparency. If your pharmacy tries to substitute without telling you, speak up. You have the right to know what you’re getting.

Use trusted resources: the FDA’s Purple Book lists all approved biosimilars and their reference products. The Biosimilars Council offers disease-specific guides. And if you’re unsure, talk to your pharmacist or provider - they’re trained to help you navigate this.

Final Thoughts

Biosimilars aren’t a gimmick. They’re a proven, science-backed way to make life-saving treatments more affordable. They’re not perfect - market forces still hold back full adoption - but they’re working. Patients are saving money. Doctors are prescribing them. And regulators are standing behind them.

As more biologics lose patent protection over the next few years, biosimilars will become the new standard. The real challenge isn’t the science. It’s making sure the system - insurers, pharmacies, and policymakers - catches up.

Are biosimilars the same as generic drugs?

No. Generic drugs are chemically identical copies of small-molecule drugs, like aspirin or statins. Biosimilars are copies of complex biologic drugs made from living cells. Because biologics are large, intricate molecules, biosimilars can’t be exact duplicates - but they’re designed to work the same way with no clinically meaningful differences in safety or effectiveness.

Do biosimilars cause more side effects than the original biologic?

No. Multiple large studies, including the NOR-SWITCH trial and FDA-monitored post-market data, show no increase in side effects or immune reactions when switching to a biosimilar. The FDA requires extensive testing to ensure safety before approval. Real-world data from Europe and the U.S. confirms this over more than a decade of use.

Why are biosimilars cheaper if they’re so complex to make?

Because they don’t have to repeat the full clinical trials the original drug went through. Manufacturers only need to prove similarity, not start from scratch. This cuts development time and cost by 60-70%. That savings gets passed on - though not always directly to patients due to insurance and rebate structures.

Can my pharmacist switch my drug to a biosimilar without my doctor’s approval?

Only if the biosimilar is designated as “interchangeable” by the FDA AND your state allows automatic substitution. As of 2023, only six biosimilars have that status. In 48 states, laws require either the prescriber’s consent or notification before substitution. Always check with your pharmacist and doctor before any switch.

Will switching to a biosimilar affect my treatment outcome?

For most patients, no. Studies show equivalent effectiveness and safety. A 2022 Arthritis Foundation survey found 87% of users reported no difference in symptom control. However, if you’ve been stable on a biologic for years, some doctors prefer to keep you on it unless there’s a clear cost or access benefit. Always discuss switching with your provider.

How do I find out if a biosimilar is available for my medication?

Check the FDA’s Purple Book, which lists all approved biosimilars and their reference products. You can also ask your doctor or pharmacist, or visit the Biosimilars Council website. If your drug is a high-cost biologic like Humira, Enbrel, or Stelara, biosimilars are likely already available or coming soon.

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