NCPA - National Center for Policy Analysis

Biosimilars: The Precarious Battle between Cost-Centric Health Care Policy and Patient-Centric Care

October 2, 2012

Emerging forms of drugs, known as biosimilars, are becoming a popular avenue for patients to acquire cheaper medicine. Biosimilar drugs are like a generic form of biologic drugs, which are medicines that are derived from living sources. Biosimilar drugs are structurally similar versions of biologic medicines, which are gaining popularity because they reduce health care costs. It is important for policymakers to have a clear scientific understanding of biosimilars before they propose rules and regulations that can be potentially harmful, say Peter J. Pitts, an adjunct scholar, and Dr. Roger Stark, a policy analyst, at the Washington Policy Center Health Care.

As states cut their budgets and tighten health care spending, they are placing more emphasis on purchasing biosimilar drugs to help reduce costs. However, there are some scientific and regulatory issues they should consider:

  • Regulations that are used for generic drugs won't work for biologic medicines because of the complexity of molecules in the recreation of biologic medicines.
  • Incentivizing or requiring patients to purchase biosimilar drugs stifles medical innovation and economic investment, which ends up hurting patients in the long run.
  • Additionally, drug makers need to have monitoring and safety-related requirements imposed on them to ensure safety.
  • Finally, drug makers need to show that a biosimilar's quality is sufficiently comparable to that of the innovator product.

One thing to consider about biosimilar drugs is the cost. While biologic drugs and biosimilar drugs are comparatively cheaper than traditional chemical drugs, it is important to assess the costs and benefits of purchasing biosimilar and biological drugs. Because biosimilar drugs are expensive and difficult to get approved, the net savings average around 20 to 30 percent of the brand-name biologic drug.

In the next few years, it is estimated that biologic medicines will comprise about one-half of the top 100 best-selling drugs. As a result, it is important for drug makers and policymakers to be aware of the necessary standards by which to create biosimilars so as to provide the best care for patients at the cheapest cost.

Source: Peter J. Pitts and Dr. Roger Stark, "Biosimilars: The Precarious Battle between Cost-Centric Health Care Policy and Patient-Centric Care," Washington Policy Center, September 2012.


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