Analysis Group Team Discusses the Impact of Biosimilar Drugs in Scientific American Blog Post

April 13, 2017

The introduction of biosimilars – drugs whose sales will compete with those of their branded biologic drug counterparts – initiated what some industry observers have termed a revolution in the pharmaceutical industry. Biologics and their biosimilar counterparts are complex medications that are “grown” rather than manufactured chemically, and so the production process is more difficult, more variable, and more expensive than it is for chemical (small molecule) drugs. The increased complexity and variability of production are also reflected in the fact that biosimilars (unlike generics) have not yet been approved as interchangeable with their branded counterparts by the FDA. While generic drugs have frequently replaced brand-name drugs at much lower cost, the experience with biosimilars to date suggests that their impact on the cost of treatment relative to branded biologics may be more moderate.

In a blog post, “Will 'Biosimilar' Medications Reduce the Cost of Biologic Drugs? Not Necessarily,” published on the Scientific American website, Analysis Group Managing Principals Richard Mortimer and Alan White and Vice President Christian Frois explore the impacts that manufacturing complexity, FDA trials, and pharmacy substitution may have on the introduction of biosimilars to the marketplace. The authors argue that, as a result of these factors, penetration rates and price discounts for biosimilars may be lower than for generics.