Biologics & Biosimilars
Biologics or biological products are medicines made from living materials through highly complex manufacturing processes and must be handled and administered under carefully monitored conditions. Biologics include a wide variety of products such as cell and gene therapies, therapeutic proteins, monoclonal antibodies and vaccines. Biologics are used to prevent, treat or cure a variety of diseases with unmet medical need including cancer, chronic kidney disease, diabetes, cystic fibrosis and autoimmune disorders.
A biosimilar is exactly what its name implies — it is a biologic that is highly similar to and has no clinically meaningful differences from an existing biologic medicine (known as a reference product) that is already licensed by the U.S. Food and Drug Administration (FDA).
Biosimilars came to fruition in the U.S. after Congress enacted the Biologics Price Competition and Innovation Act (BPCIA) in 2010. Since then, biosimilars have become an important way to bolster competition and increase options for patients. The BPCIA created an abbreviated approval pathway for biosimilars while providing 12 years of data protection following the first licensure of innovative biologics, balancing the goal of reducing costs with the need to maintain incentives for the development of new innovative biologics.
Biologics: What Makes Them Different?
Biologics: What Makes Them Different?
The Importance of the Biosimilar User Fee Act in Bringing New Options to Patients and Increasing Competition
The Biosimilars User Fee Act (BsUFA) provides the FDA supplemental resources and staffing to support greater consistency and predictability in the regulatory review of biosimilar and interchangeable biosimilar products. Since enactment in 2012, BsUFA has played an essential role in strengthening the FDA’s ability to implement a regulatory approach for biosimilars that is consistent with the agency’s gold standard science-based review.
FDA,Biologics and Biosimilars
Fact Sheet
After the BPCIA, The Biosimilars User Fee Act (BsUFA) was enacted in 2012 to help provide the FDA with supplemental resources and staffing specifically to support greater consistency and predictability in the regulatory review of biosimilar and interchangeable biosimilar products.
Since enactment of the BPCIA and BsUFA, and the FDA’s first approval of a biosimilar for marketing in March 2015, a robust biosimilars market has emerged in the U.S., yielding increased competition and substantial savings for patients and the government.
As of the end of 2025, over 70 biosimilars have been approved and there are 60 biosimilars launched on the market in the U.S. competing against over 15 brand biologics. Among these launched biosimilars are the first interchangeable biosimilar products, which may be substituted at the pharmacy counter without intervention from the prescriber, similar to many generic drugs. Over the next five years, savings attributable to biosimilars are projected to exceed $180 billion, a more than four-fold increase from the last five years, with much of this savings benefiting the Part B program.
Related Resources
16 years later: How BPCIA continues to expand competition and lower costs
Sixteen years ago today, the United States enacted the Biologics Price Competition and Innovation Act (BPCIA), a landmark law that helped establish a strong, IP-driven and predictable regulatory system for biological innovation and competition. The groundbreaking legislation reshaped the biologics and biosimilars marketplace, expanding options for patients.
Biologics are complex medicines made from living cells that treat many serious diseases, while biosimilars are highly similar alternatives to FDA-approved biologics, and have no clinically meaningful differences in safety and effectiveness.
Before the BPCIA was enacted, there was no formal pathway to approve biosimilars. The 2010 law created an abbreviated approval process that encouraged the development of lower-cost alternatives to biologic medicines while maintaining incentives for the development of new innovative biologics. In striking this balance, the BPCIA has facilitated competition and helped expand patient access to lifesaving treatments.
When paired with the highly successful Hatch-Waxman Act, the impact of these two policies cannot be overstated for America’s leadership in medicines. Together, BPCIA and Hatch-Waxman have:
- Ushered in lower cost generic and biosimilar medicines now accounting for about 90% of prescriptions filled in the U.S., with the average generic costing patients under $7—and each one exists because a brand medicine came first.
- Provided the pathway for over 80 biosimilars to get FDA approval to date.
- Driven competition that has resulted in average sales prices that are 45% below the brand biologic product at three years post launch among more recently launched biosimilars.
- Resulted in over $3 trillion in patient savings over the past decade alone.
The success of Hatch-Waxman, the BPCIA and strong patent protections incentivize companies to invest $2.6 billion on average over 10–15 years to bring a single medicine to market despite long odds—while also enabling early patient access to innovative medicines and robust competition among brands before lower-cost generics and biosimilars arrive.
But this anniversary is also a reminder that we cannot rest on our laurels. To maintain America’s edge against rising international competition, we must continue to prioritize and protect the ecosystem that makes American innovation possible. Policymakers should:
- Protect our world-leading innovation and IP ecosystem
- Reauthorize the Prescription Drug User Fee Act (PDUFA) and Biosimilar User Fee Act (BsUFA)
- Reject government price setting like Most Favored Nation policies
- Drive savings and efficiency across the health care supply chain
At the same time, policymakers should not overlook the role that misaligned incentives have played in slowing biosimilar adoption—especially as PBM middlemen increasingly block biosimilars from lists of covered medicines and the 340B program disincentivizes hospitals from using them.
Learn more at PhRMA.org/Biologics.
Jocelyn Ulrich
The Biosimilar Red Tape Elimination Act Provides a New Profit Source for PBMs
The Biosimilar Red Tape Elimination Act would deem all biosimilars interchangeable with their reference products without the U.S. Food and Drug Administration (FDA) needing to make any additional determination. The bill would do away with important scientific standards while failing to address the broader misaligned incentives in the marketplace allowing pharmacy benefit managers (PBMs) to block biosimilar competition and profit off medicines at the expense of patients.
The Biosimilar Red Tape Elimination Act Provides a New Profit Source for PBMs image
Medicaid
Fact Sheet
Biosimilars drive savings, but the IRA undermines their development
A growing body of evidence shows the biosimilar market is increasingly realizing its potential as a driver of competition and savings in the United States. But a new report from Cencora highlights how implementation of the Inflation Reduction Act (IRA) threatens to undermine biosimilar progress driving competition in the marketplace and the future savings that could be achieved. Since Congress enacted the Biologics Price Competition and Innovation Act (BPCIA) in 2010, biosimilars have become an important way to bolster competition and increase options for patients.
What you need to know
The competitive dynamics in the biosimilar market are unique. While generic competition among small molecule medicines often leads to decreased uptake of brand-name products, the biologics market yields a more dynamic effect where both brands and biosimilars compete to retain market share. This dynamic effect is particularly noticeable in payment rates in the Medicare Part B program. An analysis of Part B payments in the report highlights the substantial reductions in the average sales price (ASP) of brand biologics facing competition from biosimilars. In one example, a brand biologic lowered its ASP by 57% while still maintaining majority market share with significant biosimilar competition.
As a result of growing competition, the biosimilars market has led to $21 billion in cumulative savings in the United States over the past six years for Medicare, employers, patients and the broader health care system.
On the contrary
While these benefits and the future promise biosimilars present are substantial, the IRA threatens the role these medicines play in controlling costs. Under the IRA, the government can select certain biologics in both Medicare Part B and Part D for government price-setting.
Biologics that have been on the market for 11 years or longer may be eligible to be selected for government price setting as long as they do not have a biosimilar competitor that is licensed and marketed. But it will be very difficult for biosimilar medicines to enter the market before the corresponding reference product is eligible for selection and government price setting may occur given existing timelines governing biosimilar entry that were created under the BPCIA.
And there is more
Though Congress enacted a “Special Rule” as part of the law enabling biosimilar manufacturers to obtain a “pause” before a brand biologic product is selected for price-setting to allow time for a biosimilar to be approved and launched before the set price is imposed, the timelines and criteria under the “pause” may still be insufficient to provide predictability for biosimilar manufacturers, throwing the future of the market into question.
Due to the complexities of biologics, biosimilar development can take between seven and eight years and $100-$250 million in investment. But under the IRA, biosimilar developers are not able to predict, with any accuracy, which branded products will be subject to price setting. As a result, the law creates significant uncertainty and will reduce incentives to invest in biosimilar development moving forward as manufacturers may find it difficult to recoup the significant costs of investment.
Impact is already harming future development
The negative impact is already apparent with the recent announcement of CMS’ initial list of drugs selected for 2026. Two of the biologics selected for price setting face pending biosimilar competition in the years ahead. However, due to the provisions in the IRA and CMS’ flawed interpretation, if the pending biosimilar products are unable to reach the market by August 1, 2024, and meet CMS’s arbitrary “bona fide” marketing standard, they will be forced to compete against products with a government set price, reducing the chances of success in the marketplace.
Here’s the deal
The utilization of biosimilars has been forecasted to save more than $180 billion over the next five years, a more than 4-fold increase from the previous five years. Unfortunately, substituting government intervention for market competition comes at a cost. Chilling biosimilar development at a time when the marketplace is positioned to demonstrate the full value of competition in reducing health care costs is misguided and seriously threatens projected savings for patients, Medicare and the broader health care system.
To learn more about biologics and biosimilars, visit here.
Lindsey Seidlitz
"Biosimilars drive savings, but the IRA undermines their development"
The US Market for Biosimilars and Biologics Medicines
The U.S. Market for Biosimilars and Biologics Medicines
Since Congress enacted the Biologics Price Competition and Innovation Act (BPCIA) in 2010, biosimilars have become an important way to bolster competition and increase options for patients. The BPCIA created an abbreviated approval pathway for biosimilars while providing 12 years of data protection following the first licensure of innovative biologics, balancing the goal of reducing costs with the need to maintain incentives for the development of new innovative biologics. Since enactment of the BPCIA, a robust biosimilars market has emerged in the U.S., yielding increased competition and substantial savings for patients and the government.
The U.S. Market for Biosimilars and Biologics Medicines image
Biologic and Biosimilars
Fact Sheet
BsUFAIII
BsUFA III
The Biosimilar User Fee Act (BsUFA) is vital to the regulatory review of biosimilar and interchangeable biosimilar products and the mission of the U.S. Food and Drug Administration (FDA) to protect and advance public health. Since its enactment in 2012, BsUFA has played an essential role in strengthening the FDA’s ability to implement a regulatory review approach that supports timely development of biosimilar biological products and is consistent with the Agency’s high standards for scientific rigor and patient safety. BsUFA III initiatives will build on the success of the program and help increase timely access to safe and effective biosimilars for patients.
BsUFA III image
Biologic and Biosimilars
Fact Sheet
BsUFA III PhRMA Priorities
BsUFA III will play a critical role in improving the predictable, timely and efficient development and regulatory review of biosimilar and interchangeable biosimilar products. PhRMA fully supports both the proposed BsUFA III performance goals as well as a timely legislative reauthorization of BsUFA. PhRMA looks forward to working with FDA, Congress, patient and medical provider groups and other stakeholders to ensure timely reauthorization of this important program and that there are no disruptions to the FDA activities.
BsUFA III PhRMA Priorities image
Intellectual Property
Report