Biosimilar Cost Savings: How Much Do They Really Save Compared to Original Biologics?

When you hear the word biosimilar, you might think it’s just another generic drug. But it’s not. Biosimilars aren’t copies like the pills you pick up for $5 at the pharmacy. They’re complex, living-molecule drugs designed to match expensive biologic treatments - like those for rheumatoid arthritis, cancer, or Crohn’s disease - as closely as science allows. And they’re saving billions. But not as much as they could.

Why Biosimilars Aren’t Like Generics

Generic drugs are simple. They’re chemically identical to brand-name pills. If you switch from brand-name Lipitor to generic atorvastatin, you’re getting the exact same molecule. Biosimilars? Not even close. They’re made from living cells - yeast, bacteria, or animal cells - grown in huge vats. Tiny changes in temperature, pH, or nutrient mix can alter the final product. That’s why regulators don’t call them “identical.” They call them “highly similar.” This complexity is why biosimilars cost way more to develop than generics. A generic can be made for under $1 million. A biosimilar? Often over $100 million. That’s why you don’t see 80-90% price drops like you do with generics. Instead, you get 15-35% off the list price - sometimes more, sometimes less.

How Much Are Biosimilars Actually Saving?

The numbers tell a clear story. In 2024 alone, biosimilars saved the U.S. healthcare system $20.2 billion. Since the first one hit the market in 2015, that total hits $56.2 billion. That’s not pocket change. That’s enough to cover free insulin for millions of patients for years. Take Humira, the top-selling drug in the world for over a decade. Before biosimilars, a single month’s supply could cost over $7,000. In January 2025, with 10 FDA-approved biosimilars on the market - including several labeled “interchangeable” - the list price dropped by up to 85%. That’s huge. But here’s the catch: the real price you pay isn’t always what’s on the sticker. Pharmaceutical companies use rebates and discounts to keep their drugs on pharmacy benefit managers’ (PBMs) formularies. So even if a biosimilar lists at $1,000 a month, the originator drug might be priced at $7,000 - but after rebates, the net price is $2,200. That’s still higher than the biosimilar, but not by much. This “rebate trap” means savings aren’t automatic. They depend on who’s negotiating, how contracts are structured, and whether the payer pushes for biosimilars.

Real-World Savings: Patients, Employers, and Medicare

Patients aren’t just seeing lower list prices - they’re paying less out of pocket. A 2025 report from CSRxP found that average patient copays for biosimilars were 23% lower than for the original biologics. For some, that meant going from $400 a month to $300. For others, it meant dropping from $1,200 to $650. That’s life-changing for someone on a fixed income.

Employers are saving too. One study found that if every employee switched from a brand-name biologic to its biosimilar, an average employer saved $1.53 million per year. Across all self-insured U.S. companies, switching just two biologics to biosimilars saved $1.4 billion in 2024. Medicare Part B, which covers drugs given in clinics, saw consistent price drops after biosimilars entered the market. Prices fell over time - not just once, but steadily - as more competitors joined.

In Europe, the savings are even more dramatic. In Norway, 86% of patients using a specific biologic now get the biosimilar version within three years of launch. In the U.S., that number is still under 10% for most drugs. Why? Because the system isn’t built to push biosimilars. Doctors aren’t always trained on them. Patients are scared they’re “less safe.” PBMs don’t always prioritize them.

The Humira Effect: A Case Study in Savings

Humira’s story is the best example of what biosimilars can do. Before 2023, AbbVie held a monopoly. No competition. Prices stayed high. Then, in January 2023, the first biosimilars arrived. By January 2025, ten were approved. The list price dropped 85%. But here’s what really happened: AbbVie’s net revenue didn’t crash. Why? Because they offered bigger rebates to PBMs. The biosimilars didn’t get those rebates - at least not all of them.

But here’s the twist: even with rebates, the biosimilars still won. Why? Because when you add up all the costs - administration, hospital visits, side effect management - the biosimilars came out cheaper overall. And when patients switched, fewer stopped treatment because they couldn’t afford it. That’s the real win: more people got the medicine they needed.

The Biosimilar Void: Why Most Biologics Still Have No Competition

Here’s the scary part: only 12 of the 118 biologics set to lose patent protection in the next 10 years have biosimilars in development. That means 90% of future savings are sitting on the shelf - waiting for someone to build them.

Why? Because it’s risky. It takes 7-10 years and over $100 million to get one biosimilar approved. And if the originator company sues you for patent infringement - which they often do - you could be stuck in court for years. In Europe, governments step in and push biosimilars. In the U.S., no one’s pushing. Companies wait. Investors hesitate. The pipeline dries up.

Compare that to the EU, where 73% of high-sales biologics have biosimilars in the works. In the U.S., it’s 23%. That gap isn’t accidental. It’s policy.

How to Get the Most Savings - For Patients and Payers

If you’re an employer, a health plan, or even a patient, here’s how to unlock more savings:

• Push for formulary preference. Make sure biosimilars are listed first in your drug plan. If the plan covers the biosimilar at a lower tier, people will switch.
• Use step therapy. Require patients to try the biosimilar before getting the originator. Not to deny care - to save money so more people can get treated.
• Ask for transparency. Demand to see net prices, not just list prices. Rebates matter. If your PBM is hiding them, you’re not getting the full savings.
• Educate providers and patients. Many doctors still think biosimilars are “second-rate.” They’re not. Studies show no difference in safety or effectiveness. Patients need to hear that too.

What’s Next? The Future of Biosimilar Savings

The Biden administration’s 2024 executive order on drug pricing is a start. The FDA is speeding up approvals. Some PBMs are building dedicated biosimilar formularies. But without policy changes - like banning anti-competitive rebates or funding biosimilar development - the U.S. will keep falling behind.

If the 90% of biologics without biosimilars in the pipeline get developed, the U.S. could save $234 billion over the next decade. That’s more than the entire annual budget of the CDC. That’s enough to cover cancer care for 2 million more people. But right now, we’re not even trying.

Biosimilars aren’t magic. They’re not perfect. But they’re the best tool we have to bring down the cost of life-saving drugs. And if we use them right - with smart policies, transparent pricing, and real competition - they can change everything.