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What Biosimilars Are and Why They Matter
Biologic drugs are among the most expensive medications in the world, and for millions of patients, that cost is a real barrier to treatment. Biosimilars were designed to change that equation, but for many people, the term still raises more questions than answers. What exactly is a biosimilar? Is it as good as the original? And why does it matter for patients, providers, and the healthcare system at large? You are not alone. As biosimilars become increasingly common in the U.S. healthcare system, more patients and providers are asking these questions.
This guide breaks down everything you need to know about biosimilars: what they are, how they’re approved, whether they’re safe and effective, and why they matter to your wallet and your health.
Key Takeaways
- Biosimilars are FDA-approved medications that are highly similar to already-approved biologic drugs.
- They are not identical copies (like generic drugs) but are held to rigorous standards before approval.
- Biosimilars typically cost 15–50% less than their reference biologics at launch, generating $20.2 billion in savings for U.S. patients in 2024 alone.
Interchangeable biosimilars may be substituted at the pharmacy without a new prescription from your doctor, like how generic drugs work.
What Are Biosimilars?
A biosimilar is a type of biological medication, or biologic, that has been developed to be highly similar to a biologic drug already approved by the U.S. Food and Drug Administration (FDA). The original, already-approved drug is called the reference product or originator biologic.
The word “biosimilar” itself tells you a lot: it is similar to a biologic, but not identical. That distinction is important, and it’s one of the things that sets biosimilars apart from generic drugs.
Biosimilars are made from living sources such as cells, proteins, or microorganisms, just like their reference products. Because the manufacturing process involves living biological systems, it is impossible to produce an exact copy.
However, any differences that exist between a biosimilar and its reference product are carefully analyzed and must be shown to have no clinically meaningful impact on safety or effectiveness before the FDA grants approval.
What Are Biologics?
To understand biosimilars, it helps to first understand biologics. Biologic medications are a class of drugs derived from living organisms — including humans, animals, bacteria, and yeast. They can be made from sugars, proteins, nucleic acids, or a combination of these, and they are significantly more complex than traditional chemical-based drugs.
Biologics are designed to target specific sites or processes in the body with precision. They are used to treat serious and chronic conditions that were once difficult or impossible to manage, including:
- Rheumatoid arthritis and other autoimmune diseases
- Various types of cancer
- Crohn’s disease and ulcerative colitis
- Diabetes
- Multiple sclerosis
- Psoriasis
- Osteoporosis
- Rare and serious blood disorders
Because they are grown from living cells rather than chemically synthesized, biologics are more complex to manufacture, more difficult to characterize, and generally more expensive than conventional drugs.
How Are Biosimilars Different from Generics and Original Biologics?
A common source of confusion is how biosimilars relate to both traditional generic drugs and their original biologic counterparts. The table below summarizes the key differences:
| Feature | Original Biologic | Biosimilar | Generic Drug |
|---|---|---|---|
| Source | Living cells/organisms | Living cells/organisms | Chemical synthesis |
| Complexity | High (large molecules) | High (large molecules) | Low (small molecules) |
| Identical to the original? | N/A | No — highly similar | Yes — exact copy |
| FDA Approval Pathway | BLA (full) | Abbreviated BLA (BPCIA) | ANDA (Hatch-Waxman) |
| Clinical studies required? | Yes (extensive) | Yes (abbreviated) | Limited (bioequivalence) |
| Typical cost vs. original | Reference price | ~15–50% lower | ~80–85% lower |
| Interchangeable? | N/A | Sometimes (FDA designation) | Generally, yes |
Generic drugs are simple chemical molecules that can be reproduced exactly. Because a biologic is a complex molecule derived from living cells, no two batches, even from the same manufacturer, are identical. A biosimilar meets a rigorous standard of being “highly similar” to its reference product with no clinically meaningful differences.
Think of it this way: even the original biologic drug may vary slightly from batch to batch during its own manufacturing process. Biosimilars go through similarly robust quality controls, and the FDA requires proof that any variation does not affect how the drug works in your body.
Are Biosimilars Safe and Effective?
This is one of the most common and important questions patients ask — and the answer is yes. Biosimilars approved by the FDA are just as safe and effective as their reference biologic products.
The FDA does not approve a biosimilar unless it has demonstrated:
- No clinically meaningful differences from the reference product in terms of safety, purity, and potency
- The same mechanism of action, route of administration, dosage form, and strength
- No new or worsening side effects compared to the reference product
Real-world data strongly support the safety of biosimilars. Since biosimilars entered the U.S. market in 2015, they have been used in approximately 3.3 billion patient therapy days, with no unique clinical challenges identified. That is a significant body of evidence.
Patients switching from a reference biologic to a biosimilar can expect the same treatment outcomes, symptom control, disease management, and side-effect profile they experienced with the original medication.
What About Long-Term Safety?
After a biosimilar is approved, the FDA continues to monitor it through post-market surveillance programs. This is the same oversight applied to all approved drugs and biologics.
Manufacturers are required to report adverse events, and the FDA actively tracks safety signals in real-world settings. The extensive use of biosimilars since 2015, without unique safety concerns, reinforces their strong long-term track record.
How Does the FDA Approve Biosimilars?
The FDA approval pathway for biosimilars was established by the Biologics Price Competition and Innovation Act (BPCIA), passed as part of the Affordable Care Act in 2010. This law created an abbreviated approval process that allows biosimilar manufacturers to build on the existing safety and effectiveness data of the reference biologic, rather than conducting the full, lengthy clinical trials required for entirely new drugs.
Approval requires a comprehensive package of evidence showing the biosimilar is highly similar to the reference product. The process typically involves the following steps:
| Step | What Happens |
|---|---|
| 1 | Analytical testing — Scientists compare the biosimilar’s structure and function to the reference biologic at the molecular level. |
| 2 | Animal studies (when relevant) — Evaluate safety and biological activity. |
| 3 | Human clinical studies — Compare pharmacokinetics (how the drug moves through the body) and pharmacodynamics (how it affects the body) in humans. |
| 4 | FDA review — The agency evaluates all data and may request additional information before granting approval. |
| 5 | Post-market surveillance — After approval, ongoing monitoring continues to ensure long-term safety and effectiveness. |
In October 2025, the FDA announced significant updates to streamline the biosimilar approval process, including reducing the requirement for time-intensive and expensive comparative clinical studies when advanced analytical testing can demonstrate similarity. This change is expected to lower development costs and accelerate the availability of more affordable biosimilars for patients.
What Is an Interchangeable Biosimilar?
Some biosimilars receive an additional FDA designation: interchangeable. An interchangeable biosimilar has met an even higher standard, demonstrating that it can be expected to produce the same clinical result as its reference product in any given patient. For medications administered more than once, interchangeable biosimilars must also demonstrate that switching between the biosimilar and the reference product does not pose additional risks.
Practically speaking, an interchangeable biosimilar can be substituted at the pharmacy for the reference biologic without requiring a new prescription from your doctor. This is similar to how a pharmacist might automatically substitute a generic equivalent for a brand-name drug.
Not all biosimilars carry the interchangeable designation, but all FDA-approved biosimilars have been shown to have no clinically meaningful differences from their reference products.
What Conditions Do Biosimilars Treat?
Biosimilars are available for a wide and growing range of serious conditions. As of mid-2025, the FDA had approved 84 biosimilars for 21 reference products, with 67 of those medications available to patients in the U.S.
Current therapeutic areas include:
- Oncology: Biosimilars of trastuzumab (Herceptin), bevacizumab (Avastin), and rituximab (Rituxan) are widely used in cancer treatment.
- Rheumatology: Multiple biosimilars of adalimumab (Humira), etanercept (Enbrel), and infliximab (Remicade) are now available for the treatment of rheumatoid arthritis, ankylosing spondylitis, and related conditions.
- Gastroenterology: Biosimilars are used to treat Crohn’s disease and ulcerative colitis.
- Dermatology: Biosimilars are available for moderate-to-severe plaque psoriasis.
- Endocrinology: Biosimilar insulins and treatments for diabetes-related conditions are available.
- Hematology and Oncology Support: Biosimilars of filgrastim and pegfilgrastim help manage low white blood cell counts in patients undergoing chemotherapy.
As patents on more biologics expire in the coming years, the number of available biosimilars is expected to grow substantially.
Why Do Biosimilars Matter? Cost, Access, and the Bigger Picture
Biologic drugs are among the most expensive medications in the world. As of 2024, biologic drugs accounted for only 5% of prescriptions in the U.S. but 51% of total prescription drug spending. For many patients, the cost of biologic therapy can reach tens of thousands of dollars per year, creating serious barriers to access.
Biosimilars help change that equation. By introducing competition in the biologic market, they drive down prices and increase patient access to treatments that were previously out of reach.
Real Cost Savings Data
The financial impact of biosimilars is substantial and growing:
- Biosimilars generated an estimated $20.2 billion in savings for U.S. patients and the healthcare system in 2024 alone.
- Since their U.S. market entry in 2015, biosimilars have accumulated $56.2 billion in total savings through 2024.
- Competition from multiple biosimilars further accelerates price erosion, with studies showing larger price reductions as more biosimilar competitors enter the market over time.
These savings benefit patients directly through lower out-of-pocket costs and the broader healthcare system by reducing spending on high-cost medications — freeing up resources for other care needs.
Expanded Access to Treatment
Cost savings also enable more people to receive the treatment they need. Since biosimilars entered the U.S. market, an estimated 460 million additional days of therapy have been made available to patients who otherwise would not have received treatment due to cost barriers. That is a meaningful and measurable improvement in patient care.
Frequently Asked Questions About Biosimilars
Will employees or plan members be notified of a biosimilar switch?
Notification requirements vary by state and health plan design, but generally, prescribers and pharmacists are expected to inform patients of any medication changes. For non-interchangeable biosimilars, the prescriber typically needs to approve the switch. For interchangeable biosimilars, some states permit automatic pharmacy-level substitution, though notification standards differ. Plan sponsors can influence this experience through formulary design and member communication strategies built into their benefits platform.
Do biosimilars have the same side effects?
Yes. The FDA requires biosimilars to demonstrate that they have no new or worsening side effects compared to their reference biologic. Individual responses can always vary, but from a plan management perspective, biosimilars carry the same clinical risk profile as the originator — meaning switching members to biosimilars does not introduce new safety considerations at the population level.
How do biosimilars affect member out-of-pocket costs?
Most members see lower out-of-pocket costs when a biosimilar is on formulary, though the actual savings depend on plan design, tier placement, and available manufacturer copay assistance programs. PBM platforms that give plan sponsors control over formulary structure and cost-sharing tiers are key to ensuring those savings actually reach members, rather than being absorbed elsewhere in the supply chain.
Can members request to stay on their original biologic?
Yes, and some will. Plan sponsors should anticipate step-therapy exceptions and medical-necessity appeals when transitioning members to biosimilars. A well-designed formulary strategy can reduce friction and minimize unnecessary exceptions while still respecting individual clinical needs.
Where can plan administrators find information on FDA-approved biosimilars?
The FDA maintains a current list of approved biosimilar products at fda.gov. Plan administrators and benefits managers can also reference this list when evaluating formulary updates, though a robust PBM platform should surface this data automatically as part of formulary management workflows.
The Future of Biosimilars
The biosimilar market in the U.S. is still in its early stages relative to its full potential. With roughly 90% of brand-name biologics expected to lose patent protection in the next decade, there is an enormous opportunity for biosimilar competition to further reduce drug costs and expand patient access.
However, challenges remain. Adoption of biosimilars has fallen short of expectations in some therapeutic areas due to pharmacy benefit manager (PBM) practices, complex rebate structures, and patient and provider hesitancy. Ongoing regulatory improvements — including the FDA’s 2025 streamlining of biosimilar development requirements — are designed to make it faster and more cost-effective to bring new biosimilars to market.
For patients, the bottom line is encouraging. More biosimilar options are coming, costs are expected to continue declining, and the safety record of these medications continues to strengthen.
How Serve You Rx Supports Patients Using Biosimilars
Managing biosimilar adoption across a plan population involves more than just updating a formulary. It requires visibility into utilization patterns, tools to manage step therapy and prior authorization workflows, and the ability to model cost impact before making coverage decisions. That’s where Serve You Rx comes in.
Our PBM software gives plan sponsors and administrators the tools to:
- Identify biosimilar substitution opportunities across your current member population
- Model formulary scenarios and project savings before making changes
- Automate prior authorization and step therapy workflows for biosimilar transitions
- Track biosimilar adoption rates and measure cost impact over time
- Support member communication and exception management at scale
Whether you’re optimizing an existing biosimilar strategy or building one from the ground up, Serve You Rx provides the data and workflows to do so confidently.
Key Terms Glossary
Biologic: A complex medication derived from living organisms, used to treat serious conditions like cancer, autoimmune diseases, and diabetes.
Biosimilar: An FDA-approved medication that is highly similar to an already-approved biologic (the reference product), with no clinically meaningful differences in safety or effectiveness.
Reference product (originator biologic): The original FDA-approved biologic drug that a biosimilar is developed to closely match.
Interchangeable biosimilar: A biosimilar that has met additional FDA criteria and may be substituted for its reference product at the pharmacy without a new prescription.
BPCIA: The Biologics Price Competition and Innovation Act (2010), the law that established the FDA’s abbreviated approval pathway for biosimilars.
BLA: Biologics License Application: the formal submission required for FDA approval of a biologic or biosimilar.
Sources: FDA.gov; Association for Accessible Medicines 2025 U.S. Generic & Biosimilar Medicines Savings Report (IQVIA Institute); HHS.gov Biosimilar Fact Sheet (October 2025); Vanderbilt Specialty Pharmacy.
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Serve You Rx is a full-service pharmacy benefit manager (PBM) with unquestionable flexibility and an unwavering commitment to doing what’s best for its clients. With a fervent focus on those it serves, including insurance brokers, consultants, third-party administrators, and their clients, Serve You Rx delivers exceptional service and tailored, cost-effective benefit solutions. Independent and privately held for nearly 40 years, Serve You Rx can implement new groups in 30 days or less and say “yes” to a wide variety of viable solutions. Known for its adaptability, quality, and client-centricity, Serve You Rx aims to be a benchmark for better client service.
