What’s at Stake?
Biologics, many of which are specialty medicines, are the most rapidly growing segment of increasing brand-name prescription drug costs in the U.S., with more than $100 billion in annual spending. In 2017, 11 of the top 15 drugs were biologics. Over the next few years, the number of biosimilar medicines available to patients will grow dramatically. In fact, by 2020, brand biologic medicines worth an estimated $100 billion in global annual sales will lose their patents, opening those markets for lower cost biosimilar alternatives.
Recent data show that the cost of many biologics is increasing at a faster annual pace than any other component in health care. It is expected that the biologics market will increase at a rate of more than 20 percent per year, and that by 2025, more than 70 percent of new drug approvals will be biological products. In 2014, United States spending for biologic medicines was approximately $115 billion, but it is expected to exceed $250 billion by 2019.4 This means that nearly $5 out of every $10 the country spends on prescription drugs will be spent on biologics.
In addition to the opportunity to provide millions of patients with lower-cost alternatives to brand biologic therapies, there are billions of dollars of savings at stake for America’s taxpayers. Estimates from various economic impact studies pin the projected savings from $44 billion on the low end to as high as $250 billion over 10 years and $378 billion over 20 years. While statistical assumptions for each analysis vary, experts agree on the transformative potential and significant savings from biosimilars.