Why Does the U.S. Biosimilar Market Lag Behind Europe? Economic Consequences are Discussed

Nov 3, 2019 | Biosimilars, Cost Savings, Payer, Price Watch

Why Does the U.S. Biosimilar Market Lag Behind Europe? Economic Consequences are Discussed

Biosimilar uptake in the United States lags behind Europe possibly causing the American health care consumer. A report published by the think-tank Pacific Research Institute this past summer implies a low uptake of biosimilars with significant economic consequences for U.S. health providers.

By Summer of 2019, 60 biosimilar applications were approved in Europe with only 19 approved in America. At the time of the report biosimilars generated approximately $254 million savings associated with annual healthcare spend.   When factoring in an uptake to 25% market share would lead to a savings of $2.5 billion; a 75% market share is projected to equal $7.2 billion based on already approved biosimilars in 9 drug classes.  Savings would skyrocket if more biosimilars were developed and approved. For instance, Winegarden projects a savings up to  $71.7 billion respectively over a 10 year period.

American Market Challenges

There are structural and systemic forces precluding widespread growth of biosimilars in American markets. The report’s author Wayne Winegarden attributes these to the following”

  • Reimbursement in the U.S. is based upon the average sale price of that medicine; thus the original biologics are more profitable than the biosimilar medicine
  • In the U.S. biosimilars can only be used if the originator medicine doesn’t work
  • There have been disturbing reports that of biologic producers agreeing coverage for their products with Payers on the condition that they agree not to reimburse for biosimilars (contract away competition)
  • Importantly, biosimilars are more expensive than generic drugs as the production of large protein molecules is more complicated, and their make-up differs from the originator so they must undergo extensive clinical trials—hence quite different than the generic drug comparison analogy.

The Report

For those interested in understanding biosimilar options in the U.S.—the products, the costs and potential savings a thorough review of this report is in order.

Who is the Author?

Wayne Winegarden has been published in the Wall Street Journal, Chicago Tribune, Investors’ Business Daily, Forebes.com and other outlets. Previously on the faculty at Marymount University he has testified before the U.S. Congress and has been interviewed for quotes in prominent media such as CNN and Bloomberg Radio. He has served as policy economist for trade associations in Washington DC. Dr. Winegarden received his BA, MA and PhD in Economics from George Mason University.


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