Biosimilars are an essential tool for increasing patient access to high-cost biologic medicines. Since the U.S. Food and Drug Administration (FDA) approved the first biosimilar medicine in 2015, biosimilars have generated more than $56 billion in savings. They have also resulted in over 460 million days of patient therapy that would not have occurred otherwise. However, as the biosimilar market matures, one question looms larger than ever: can biosimilar manufacturers sustain the deep price discounts that have become the industry norm, while still receiving a return on their investment?
Over the last several months, Stanton Mehr of the Biosimilars Review & Report has unpacked the factors that have contributed to this pricing conundrum, starting by closely examining the adalimumab biosimilar market. When biosimilars first became available in 2023 for AbbVie’s blockbuster drug, Humira, some biosimilars launched with up to 92 percent discounts off its wholesale acquisition cost (WAC), translating into net prices below $500 per month for a 40-mg dose.
For patients, these price points created unprecedented affordability (though, access to these biosimilar medicines continues to remain an issue). For manufacturers, these prices have led to razor-thin margins that have raised questions about long-term sustainability. As Mehr points out, if discounts deepen further, manufacturers will have little room to maneuver. This could not only mean bad news for patients who rely on adalimumab biosimilars, but other patients who are counting on biosimilars for other high-priced reference biologics that remain ‘stuck in the void’ given the warning signs.
Mehr struck a hopeful tone when describing how the situation might be unfolding differently with ustekinumab (Stelara) biosimilars, another product primarily provided through the pharmacy benefit. Initially, ustekinumab biosimilars launched with discounts between 86 and 90 percent, leading to prices between $3,000 to $4,200 per 90-mg prefilled syringe. Despite these large discounts, net cost recovery was still well above that of adalimumab’s. This would mean in theory, ustekinumab biosimilar manufacturers would have far greater room for profitability – and therefore, a better outlook in terms of sustainability – than adalimumab manufacturers.
Yet within weeks, competition drove WAC discounts even deeper, with Accord BioPharma’s Imuldosa entering the market at a 92 percent discount, or roughly $2,300 per prefilled syringe. While these trends are good for short-term savings, they are just as alarming as adalimumab biosimilar pricing is for market sustainability.
Sustainability is incredibly important in the biosimilars market. Biosimilars require $100-$300 million in upfront investment, years of clinical and regulatory work to bring a product to market, and the ability to fund costly litigation. If margins continue to collapse under unsustainably low pricing in the form of WAC discounts or steep ASP decline, fewer manufacturers will be able – or willing – to bring new biosimilars to market. This means that the U.S. market could face diminished competition and higher long-term costs for patients and the health system.
Policymakers must treat the experience of adalimumab biosimilars and the early experience of ustekinumab biosimilars as case studies related to the harmful consequences of aggressive price discounting. While steep WAC discounts may sound appealing today, most patients still struggle to access these lower-cost biosimilars largely due to flawed formulary decisions that continue to provide greater access to reference products, while unsustainably low prices jeopardize the entire industry. The Biosimilars Council advocates we correct course by encouraging fair reimbursement frameworks, ensuring formulary access, and correcting perverse market incentives that push manufacturers into unsustainable pricing strategies.
