Drug Approvals: Biosimilar Drugs

Biosimilar drugs are identical copies of a product that has an expired patent. They are expected to increase competition and reduce drug prices. Europe, Canada, Japan, and Australia have sold dozens of biosimilar drugs for ten years. In the US, prices are expected to drop by 35%. In addition, $80 billion in sales will lose patent protection through 2020 (Thayer, 2015). In 2015, $10 billion in sales already lost their patent protection. In 2016, sales for biologics drastically beat out the sales of small molecules. The drug with the most sales was Humira with $16.1 billion in sales, a 13% increase from 2015 (Thayer, 2017). New biosimilar drugs and other specialty drugs are increasingly coming to market; however, they still look economically like brand drugs. The Pharmacy Benefit Manager (PBM) sits opportunistically to profit from rebates and formulary placement (Hill, 2017). Oddly enough, the Federal Government does not determine which drugs are biosimilar, the PBM does. The industry needs to be mindful of where prescriptions are coming from (ie: specialty doctor, primary care provider, etc.) as that also dictates the price.