Biosimilar Cost Savings: How Much Do They Really Save Compared to Original Biologics?

When you hear the word biosimilar, you might think it’s just a cheaper version of a biologic drug-like a generic. But it’s not that simple. Biologics aren’t made in a lab with chemicals. They’re grown in living cells-yeast, bacteria, or animal cells-making them incredibly complex. That’s why a biosimilar isn’t an exact copy like a generic pill. It’s highly similar, with no meaningful difference in safety or effectiveness, but the manufacturing process is so intricate that even tiny changes can affect the final product. And because of that complexity, the cost savings aren’t as dramatic as you might expect… but they’re still huge.

Why Biosimilars Save Money-But Not as Much as Generics

Generic drugs are simple. They’re small molecules. Once the patent on a drug like Lipitor expires, any manufacturer can copy the chemical formula. The result? Prices drop 80-90% almost overnight. Biosimilars? Not even close. They’re made from living systems. Replicating them requires massive, expensive facilities, strict quality controls, and years of testing. That’s why biosimilars typically save 15-35% off the list price of the original biologic-not 80%.

But here’s the twist: that 15-35% isn’t the whole story. When a biosimilar enters the market, it doesn’t just lower its own price. It forces the original biologic to drop its price too. In countries like Norway and Germany, after biosimilars arrived, the original drug’s price fell by 36% on average. In the U.S., when the first Humira biosimilars launched in January 2023, the list price of the original drug dropped by nearly 85%-but only because ten biosimilars flooded the market at once. That kind of competition doesn’t happen with generics. It happens because biosimilars are hard to make, and once multiple companies enter, they fight hard for market share.

Real-World Savings: The Humira Example

Humira (adalimumab) is the best example of biosimilar impact. Before 2023, it was the top-selling drug in the world, with a list price over $7,000 per month. Patients paid hundreds or even thousands out of pocket. Then, in January 2023, the first ten FDA-approved biosimilars hit the market. Some were labeled “interchangeable,” meaning pharmacists can switch them for the original without a doctor’s approval.

By January 2025, the list price of Humira had dropped to about $1,000 per month. The biosimilars? Some sold for as low as $150. That’s an 85% discount off the original list price. But here’s where it gets messy: the real price isn’t the list price. Drug manufacturers give huge rebates to pharmacy benefit managers (PBMs) and insurers. Those rebates can make the net price of Humira almost equal to the biosimilar’s net price-even if the list price is five times higher. That’s called the “rebate trap.”

So what’s the real savings? For patients on commercial insurance, out-of-pocket costs dropped by an average of 23% when switching to a biosimilar. For employers, switching just two biologics to biosimilars saved $1.4 billion across U.S. self-insured companies. One employer reported saving $1.53 million per year just by switching employees from Humira to its biosimilar. That’s real money-money that can pay for more treatments, better coverage, or lower premiums.

It’s Not Just Humira-Biosimilars Are Changing the Game

Humira is the poster child, but it’s not alone. Stelara (ustekinumab), used for psoriasis and Crohn’s disease, saw nine biosimilars enter the market by July 2025. Some of those biosimilars were priced at 90% less than the original list price. Enbrel, Neulasta, and Rituxan have all seen biosimilar entries with similar savings patterns. And the savings keep growing. The first biosimilar was approved in the U.S. in 2015. Since then, biosimilars have saved the healthcare system $56.2 billion. In 2024 alone, they saved $20.2 billion.

And the impact goes beyond money. More than 3.3 billion days of patient therapy have been delivered using biosimilars since 2015. That’s more than 460 million extra days of treatment that patients wouldn’t have been able to afford otherwise. For someone with rheumatoid arthritis or inflammatory bowel disease, that’s not just a cost saving-it’s a life change.

Why Aren’t More People Using Them?

If biosimilars save so much money, why are they still only a tiny slice of the market? In 2023, originator biologics still made up 98.9% of all biologic spending in the U.S. That’s shocking. The reason? It’s not about safety or effectiveness. Patients and doctors are just as confident in biosimilars as they are in the originals. The problem is the system.

Pharmacy benefit managers (PBMs) often push for the drug with the biggest rebate-even if it’s the expensive original. They get paid based on rebates, not on what’s cheapest for the patient. So even if a biosimilar is cheaper on the shelf, the PBM might still favor the originator because it gives them a bigger kickback. That’s why some employers hire specialists to analyze their pharmacy contracts and force rebates to be passed through to patients.

Another issue? Lack of awareness. Many doctors still think biosimilars are “inferior.” A 2024 survey found that nearly 40% of physicians weren’t confident in biosimilar safety. That’s not based on science-it’s based on old habits. Education is key. When patients and providers understand that biosimilars are rigorously tested and just as safe, adoption jumps.

The Big Problem: The Biosimilar Void

Here’s the scary part. We’re sitting on a $234 billion opportunity-and we’re not grabbing it.

Over the next ten years, 118 biologics will lose their patents. But right now, only 12 of those have biosimilars in development. That means 90% of the biologics about to go off-patent have zero competition lined up. In Europe, 73% of high-selling biologics have biosimilars in the pipeline. In the U.S.? Just 23%. Why? Because developing a biosimilar costs $100-$200 million and takes 7-10 years. Most small companies can’t afford it. Big pharma doesn’t want to compete with its own products. So the pipeline is empty.

That’s why savings are slow. Without competition, the original drug stays expensive. And when biosimilars finally arrive, they’re often too late to make a dent. The window for maximum savings is the first two years after launch. If a second biosimilar enters within three years, it can nearly double the price drop. But if no one else comes in? The original stays high.

How to Get the Most Savings-For Patients and Payers

If you’re a patient, ask your doctor: “Is there a biosimilar for my drug?” If you’re an employer or insurer, here’s what works:

• Put biosimilars on the preferred tier in your formulary.
• Require patients to try a biosimilar before approving the original (step therapy).
• Negotiate contracts that require PBMs to pass rebates to patients, not keep them.
• Use data tools like Segal’s SHAPE warehouse to track spending and spot savings opportunities.
• Train doctors and pharmacists with real-world data on biosimilar safety.

These aren’t theoretical. Companies that did this saw biosimilar use jump from 5% to over 60% in under a year. And patient out-of-pocket costs dropped by 12% to 45%.

The Future: More Savings, If We Act

The FDA has made it easier to approve biosimilars. The Inflation Reduction Act now caps insulin costs at $35 a month for Medicare patients-something that helps biosimilar access too. The Biden administration has pushed for more competition in drug pricing. But none of this matters if we don’t fix the development pipeline.

The U.S. needs incentives-like grants, tax breaks, or guaranteed contracts-to get more companies building biosimilars. Otherwise, we’ll keep paying top dollar for drugs that could be half the price. Europe shows it’s possible. Norway got 86% of its biologic market using biosimilars within three years. The U.S. is barely at 1% for most biologics.

The math is clear: if we close the biosimilar void, we could save $234 billion over the next decade. That’s enough to cover cancer treatments, mental health care, and diabetes meds for millions. But we won’t get there by hoping. We need policy, education, and smart contracting.

Bottom Line: Biosimilars Are Working-But the System Is Holding Them Back

Biosimilars aren’t magic. They’re not generics. But they’re the best tool we have to bring down the cost of life-changing biologic drugs. They’ve already saved tens of billions. They’ve helped millions get treatment they couldn’t afford. And they’re ready to do even more-if we stop letting rebate systems and slow approvals stand in the way.

The savings are real. The science is solid. The only thing missing is the will to use them.