Biosimilar Cost Savings: How They Cut Biologic Prices Without Compromising Care

Biologic drugs save lives. They treat rheumatoid arthritis, cancer, Crohn’s disease, and other serious conditions. But they also cost ten to twenty times more than regular pills. A single year of Humira, for example, could set you back $20,000 or more. That’s why millions of patients either skip doses, split pills, or go without - not because they don’t need it, but because they can’t afford it.

Enter biosimilars. These aren’t generics. They’re not exact copies like the cheap versions of aspirin or statins. But they’re close enough - so close that the FDA says they work just as safely and effectively as the original biologic. And they’re starting to bring those prices down. Not by 90%, like generics do. But by enough to make a real difference.

Why Biosimilars Cost Less - But Not as Much as Generics

Think of a biologic drug like a living organism. It’s made from cells grown in labs, not chemicals mixed in a vat. That means every batch is slightly different. Replicating it exactly? Impossible. That’s why biosimilars are called “highly similar,” not “identical.”

Creating a biosimilar takes years. You need the same cell line, the same growth conditions, the same purification steps. The FDA requires over 100 tests to prove it behaves the same way in the body. That’s why developing a biosimilar costs $100 million to $250 million - not $5 million like a generic pill.

So, you won’t see an 85% drop in price overnight. But you will see a 35% average savings compared to the original biologic, according to Segal Consulting’s 2025 data. Some cases are even better. When ten biosimilars hit the market for Humira in early 2025, list prices dropped by up to 85%. That’s not a trick - it’s competition working.

The Real Savings: It’s Not Just the Price Tag

Here’s where things get messy. The list price isn’t the price you pay. Pharmacies, insurers, and pharmacy benefit managers (PBMs) negotiate rebates. The original biologic companies often give huge rebates - sometimes 50% or more - to stay on formularies. That makes their net price look competitive, even if the sticker price is sky-high.

Biosimilars don’t have that history. They enter with lower list prices and fewer rebates. That means even if their list price is only 30% lower, their net price can be 50% lower. And because they don’t have to pay back big rebates, they’re cheaper for the system overall.

Here’s what that looks like in practice:

• For Humira biosimilars, average patient out-of-pocket costs dropped 23% in commercial insurance plans (CSRxP, April 2025).
• Employers saved an average of $1.53 million per company when switching employees from Humira to its biosimilars.
• Across all self-insured U.S. employers, switching just two biologics to biosimilars saved $1.4 billion in 2024.

And it’s not just about money. More people are getting treated. Since 2015, biosimilars have enabled over 460 million extra days of therapy - care that wouldn’t have happened without lower costs.

Where the Biggest Savings Are Happening

Not all biologics are equal. Some have dozens of biosimilars competing. Others have none.

Humira (adalimumab) is the poster child. It was the top-selling drug in the world for years. When its patent expired in 2023, ten biosimilars rushed in. By January 2025, list prices were down 85%. That’s not just savings - that’s a market reset.

Stelara (ustekinumab) followed. Nine biosimilars entered by July 2025, with prices as low as 10% of the original list price. Medicare Part B data shows prices kept falling over time - the more competitors, the lower the price.

But here’s the problem: only 12 out of 118 biologics set to lose patent protection over the next decade have biosimilars in development. That means 90% of future biologic drugs - worth an estimated $234 billion in annual spending - could stay locked at high prices.

Compare that to Europe. In Norway, biosimilars make up 86% of the market for some biologics within three years. In the U.S., originator biologics still account for 98.9% of all biologic spending. Why? Because the system isn’t built to favor them.

Why Adoption Is Still So Slow

Doctors, patients, and even insurers are hesitant. Many think biosimilars are “second-rate.” They’re not. Over 3.3 billion patient days have been treated with biosimilars since 2015. No unique safety issues have been found.

But fear sticks. Patients worry about switching. Doctors don’t want to risk a flare-up. Insurers don’t always push them. And PBMs? Some have private-label biosimilars they profit from - so they block others.

There’s also the rebate trap. If a brand-name drug gives a 60% rebate to a PBM, even a biosimilar with a 40% lower list price might not win. The math gets twisted. Only those with deep data tools - like Segal’s SHAPE warehouse - can see the real net cost.

It’s not just about price. It’s about incentives. And right now, the system rewards the status quo.

How to Get More Savings - And Faster

Change is possible. But it needs action.

Employers and health plans can:

1. Put biosimilars on the preferred tier - make them the first option.
2. Require step therapy: try the biosimilar before approving the brand-name drug.
3. Negotiate contracts that reward lower net costs, not just list prices.
4. Train doctors and patients with real data: biosimilars are safe, effective, and cheaper.

It takes 6 to 12 months to get these systems running. But once they do, savings pile up. One health system in the Midwest cut its biologic spend by 42% in 18 months by switching to biosimilars for all new patients.

The FDA is helping. It’s speeding up approvals and designating more biosimilars as “interchangeable” - meaning pharmacists can swap them without asking the doctor. That’s a big deal. It cuts red tape and increases access.

The Inflation Reduction Act also gave Medicare new tools to negotiate drug prices. That could push biosimilars further into the spotlight.

What’s Next? The 4 Billion Gap

By 2035, over 100 biologics will lose patent protection. If biosimilars are developed for all of them, the U.S. could save $234 billion over the next decade.

But right now, only 12 are in the pipeline. That’s a 90% gap. The rest? No competition. No price pressure. No savings.

Europe didn’t get to 80% biosimilar use by accident. They had policies that forced change: mandatory substitution, public pricing transparency, and incentives for hospitals to choose cheaper options.

The U.S. is starting to catch up. But slowly. The Biden administration’s 2024 executive order on drug pricing specifically mentioned biosimilars. The FDA is approving more. But without stronger policy - like limiting rebates that block competition or requiring transparency in PBM contracts - the savings will stay locked away.

Patients aren’t asking for miracles. They just want access. A biologic that works. At a price they can afford. Biosimilars deliver that. But only if the system lets them.

Final Thought: It’s Not About Cheaper - It’s About Access

Biosimilars aren’t magic. They won’t fix the entire drug pricing system. But they’re one of the most proven tools we have right now to bring down the cost of life-changing medicines.

Every dollar saved on a biologic is a dollar that can go to another patient. To a new cancer drug. To mental health care. To insulin.

The question isn’t whether biosimilars work. They do. The question is whether we’ll let them reach the people who need them - or keep letting the system block them with rebates, confusion, and inertia.