It is no secret that medicine is expensive, but for many high-cost drugs, no one is developing cheaper alternatives. Competition lowers prices and drives investment. In the biosimilar market, poor regulations from the Food and Drug Administration and anticompetitive behavior from pharmacy benefit managers limit investment in less expensive versions of the most complex medicines.
One of the significant achievements of modern medicine is the creation of “biologics” — medicines with far longer chemical structures than regular “small molecule” drugs. From insulin to treat diabetes to many new cancer drugs, biologics save lives. Just as those small-molecule drugs have generic versions, biologics can have biosimilar versions that are just as effective but far less expensive.
Of the 118 biologics expected to lose patent protection by 2034, only 12 have biosimilars in development. Given the potential profit, companies should be racing to develop biosimilars. Instead, the FDA makes it unnecessarily expensive, and PBMs often won’t offer them.
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Justin Leventhal is a senior policy analyst for the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit www.TheAmericanConsumer.Org or follow us on X @ConsumerPal.