Biosimilars are expected to reduce overall drug spending in the U.S. by $100 billion in the next five years, according to a report from a data science firm.
Payers and physicians are becoming more willing to adopt biosimilars, cheaper versions of brand-name biologic drugs that have the same clinical benefits, according to the report from the IQVIA Institute for Human Data Science. Biologic drugs are made from living cells and treat serious illnesses, including rare genetic disorders, autoimmune diseases and cancer. The U.S. spent $125.5 billion on biologics in 2018.
Widespread use of biosimilars has been slower than the industry expected, due to factors including patient litigation and payers not being willing to put biosimilars on their formularies.
But the institute predicted that biosimilar sales could reach $80 billion in the next five years. Currently, about 19 percent of the biologics market faces competition from biosimilars, the report found.
Since the Biosimilars Act passed in 2009 allowing biosimilars to be developed in the U.S., $17 billion in biosimilar spending has been associated with savings of $37 billion, according to the report. The next five years are expected to result in an almost fivefold increase in savings compared to savings in the last five years, as newly approved, lower cost biosimilars launch and existing ones are used more.
Small drugmakers are developing the majority of biosimilars, with 87 percent being developed by 41 smaller drugmakers and 13 percent being developed by six large drugmakers. However, many smaller drugmakers license their products to large companies to market them, according to the report.
Find the full report here.