Expert Opinion on Biological Therapy

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Short and long-term economic implications of

biosimilars

Ahmad Z. Al Meslamani

To cite this article: Ahmad Z. Al Meslamani (19 Jan 2024): Short and long-term
economic implications of biosimilars, Expert Opinion on Biological Therapy, DOI:
10.1080/14712598.2024.2307353

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EXPERT OPINION ON BIOLOGICAL THERAPY
https://doi.org/10.1080/14712598.2024.2307353

SPECIAL REPORT

Short and long-term economic implications of biosimilars

a,b
Ahmad Z. Al Meslamani
a
College of Pharmacy, Al Ain University, Abu Dhabi, United Arab Emirates; bAAU Health and Biomedical Research Center, Al Ain University, Abu
Dhabi, United Arab Emirates

ABSTRACT ARTICLE HISTORY

Introduction: Biosimilars are gaining popularity due to their ability to offer comparable therapeutic Received 6 November 2023
benefits at potentially lower costs. Accepted 16 January 2024
Areas covered: This article analyses studies that compare the cost savings of biosimilars with biologics. KEYWORDS
It also explores market competition dynamics and the impact of policies in countries. The focus is on Biosimilars; biological
the advantages of biosimilars in oncology and rheumatological treatments while considering broader therapy; economic
economic implications for the pharmaceutical industry such as market displacement, pricing strategies implications; cost-savings;
and their influence on innovation and healthcare sustainability. medication cost-
Expert opinion: The introduction of biosimilars marks a shift in healthcare economics by offering cost effectiveness
reductions and long-term potential for economic balance. However, I also recognize challenges related
to research methodologies and regulatory inconsistencies across countries. To fully capitalize on their
potential, future research and development in the field of biosimilars must emphasize harmonized
approaches and comprehensive studies that ensure both cost containment in healthcare and wider
access, to high quality treatments.

1. Introduction Although biosimilars may offer immediate cost-cutting

Biosimilars, closely resembling already approved biological med­
icines, provide comparable treatment risks and benefits, and are
sanctioned based on identical pharmaceutical standards, finding
applications in treating various illnesses including cancer and
rheumatological conditions at a potentially lower cost [1]. On
the one hand, their clinical importance lies in increasing the
accessibility of often expensive biologic treatments, as seen
with biosimilars like adalimumab, etanercept, and infliximab for
rheumatological conditions, and the introduction of oncology
biosimilars like filgrastim-sndz and epoetin alfa biosimilar due to
the expiration of patents on several biologic cancer therapies,
broadening treatment options albeit introducing challenges
related to pharmacy management and necessitating education
on their efficacy and safety [2]. Deng and colleagues [3], com­
pared the efficacy and safety of HLX02, the first trastuzumab
biosimilar introduced in the country, with the reference trastu­
zumab in treating HER-2-positive breast cancer. They reported
that HLX02 is an effective and safe alternative to the original
trastuzumab in both neoadjuvant chemotherapy and postopera­
tive adjuvant therapy.
On the other hand, the economic impacts of biosimilars are
diverse and could have far-reaching ramifications on healthcare
economies globally. Giuliani et al. [4], assessed the costs of trastu­
zumab and rituximab originator versus the corresponding
approved biosimilars. They found that the cost savings of biosimi­
lars compared to original drugs are significant. For rituximab, the
biosimilar offers a saving of 274 EUR per month, while for trastu­
zumab, the saving ranges from 3,283 EUR to 6,310 EUR per month.
advantages, their wider economic ramifications spanning mar­
ket competition, innovation, and healthcare sustainability
remain complex and not fully understood. This article explores
both short and long-term implications simultaneously, It aims
to provide a comprehensive narrative that can guide stake­
holders in making informed decisions.
2. Short-term economic implications
A recent systematic review of several simulation studies esti­
mated the short-term cost of transitioning a patient to biosi­
milars at approximately EUR 57.48 (US $64.96) per patient.
Nevertheless, the full scope of their long-term economic
impact remains to be seen [5]. In oncology, the cost savings
are particularly pronounced: biosimilars could yield annual
savings of EUR 4.9 million for rituximab in follicular lymphoma
treatment, EUR 40.5 million for filgrastim, EUR 56.4 million for
pegfilgrastim, and between EUR 95.9 and 120.5 million for
trastuzumab.
The economic impact of biosimilars is largely contingent on
the competitive dynamics with reference biologics, which are
crucial in determining their success in price reduction and
market displacement [6]. Companies that create original phar­
maceutical products might feel somewhat influenced by the
emergence of biosimilar competition to reexamine their pri­
cing strategies, perhaps considering adjustments to maintain
their position in the market. This could lead to a bit more
spending on marketing and legal efforts as they explore

CONTACT Ahmad Z. Al Meslamani amaslamanie1095@gmail.com College of Pharmacy, Al Ain University, Abu-Dhabi-MBZ, United Arab Emirates
© 2024 Informa UK Limited, trading as Taylor & Francis Group
2 A. Z. AL MESLAMANI
Article highlights
● Biosimilars has a role in enhancing access to treatments for condi­
tions like cancer and rheumatological diseases.
● Significant cost savings in oncology, with biosimilars potentially sav­
ing millions of euros annually.
● Regulatory costs and the need for educational materials for health­
care providers are additional factors.
● Biosimilars could democratize healthcare by making treatments more
accessible and affordable.
● Longitudinal studies and robust economic models are needed for
better understanding.
various approaches to manage the introduction of biosimilars.
Marketing initiatives may involve emphasizing the value and
track record of original biologics while legal strategies include
extending patent protections or challenging biosimilar
approvals in order to delay market entry. Furthermore, con­
cerns have been raised regarding unethical practices during
biosimilar tendering processes such as unfair prices or exclu­
sive contracts that may hinder their market entry [7]. However,
Maini and colleagues argue that while the list prices of origi­
nator biologics remain stable, larger rebates are offered after
biosimilars enter the market, resulting in only a marginal
reduction in sales and formulary coverage [6].
Indirectly, healthcare systems may see a modest rise in
costs associated with the dissemination of educational materi­
als, which are necessary to acquaint healthcare providers with
the safety and efficacy of these new treatment options.
Additionally, the growing biosimilar sector is attracting more
investor interest, with companies aiming to carve out a niche
in this emerging market, potentially leading to a surge in
innovative activities.
However, this rapid expansion does not come without its
regulatory costs. Governments and regulatory bodies are
tasked with the formidable undertaking of creating and per­
petuating robust frameworks that are essential for the thor­
ough approval and vigilant monitoring of biosimilars. The
complexity of weaving biosimilars into the fabric of healthcare
is underscored by the intricate economic factors that influence
their short-term financial impact. Recent research into the
adoption and prices of biosimilars illustrates varying methods
across different countries [8]. In European countries, the pri­
cing of biosimilars is heavily influenced by policies that con­
nect their prices to those of reference products. Switzerland
requires biosimilars to be sold at a predetermined discount
compared to their reference products, while Germany allows
independent pricing of biosimilars. This widespread practice
across Europe plays a significant role in making biosimilars
more affordable and contributes to healthcare savings. The
varied approaches to biosimilar pricing policies in Europe,
including those in Switzerland and Germany, demonstrate
strategies aimed at balancing cost-effectiveness and market
dynamics in the biosimilar industry [9].
The literature concerning biosimilars in Europe sheds light
on the evolving economic landscapes. Researchers such as
Simoens and colleagues have made contributions to under­
standing the adoption of biosimilars, market dynamics, and
policy implications. Their work involves examining how local
and national policies influence the use of biosimilar TNF-alpha
inhibitors in countries like Italy and Spain. They emphasize the
importance of addressing both supply and demand challenges
to establish a market for biologics and biosimilars, ensuring
affordability and accessibility [10]. Furthermore, they discuss
the impact of biosimilars, suggesting approaches like cost
minimization strategies and integrated economic assessments
[11]. Various studies, including an analysis of measures imple­
mented by the government using the ARIMA model, demon­
strate success in increasing the uptake of biosimilars [12].
A systematic review also highlights that assessments of the
value of biosimilars often overlook factors such as the patient
experience and overall health improvements. The research
highlights the necessity for policies to effectively manage
biosimilar markets with a focus on providing cost-effective
access for patients while fostering a competitive healthcare
sector that drives innovation and generates further cost sav­
ings [13].
In Norway, the adoption of biosimilars like somatropin and
infliximab has been inconsistent, affected by factors including
legal challenges, marketing strategies, and the absence of
automatic substitution policies [14]. In Denmark, the shift to
adalimumab biosimilars following the originator’s patent
expiration, resulted in a significant reduction in drug costs
[15]. In contrast, the US faces challenges due to patent dis­
putes and market conditions, preventing similar cost savings
from biosimilar adalimumab, highlighting the influence of
national policies and healthcare system structures on biosimi­
lar implementation and economic impact [15].
Lacosta and colleagues discovered varied designs in bene­
fit-sharing programs for biologics across Europe, influenced by
factors like healthcare system organization, timeframe, care
setting, and policy environment. It also points out
a widespread lack of transparency in how savings from these
programs are distributed and reinvested, which raises con­
cerns about the optimal implementation of future benefit-
sharing initiatives [16].
3. Long-term economic implications
In the long-term economic landscape, biosimilars are
poised to revolutionize healthcare accessibility and finan­
cial models over time. By broadening the availability of
biologic treatments, they hold the promise of democratiz­
ing healthcare and enhancing public health outcomes. This
advancement is not merely about increasing the scope of
care; it is also geared toward reshaping the economic
landscape of healthcare through substantial cost reduc­
tions fueled by competitive pricing. The introduction of
biosimilars has been associated with lower acquisition
costs compared to the originator biologic, with observed
savings ranging between 20% and 35% for drugs like fil­
grastim, pegfilgrastim, trastuzumab, and bevacizumab. The
anticipation is that over time, as prices decrease, biologic
treatments will become more accessible to a broader swath
of the population, potentially elevating public health stan­
dards [17].
The rise of biosimilars also spurs innovation as originator
biologic companies are compelled to increase their

investment in trailblazing research and development, catalyz­
ing the creation of novel therapies. This competitive landscape
not only propels biotherapeutic progress but also supports
broader medical advancements. Furthermore, the biologic
treatment market is expected to grow as biosimilars make
these therapies more affordable, which may lead to their
increased use. A U.S. simulation study projected potential
savings from biosimilars to reach $54 billion over a decade,
based on current data and well-defined assumptions, with
a broader range estimating potential savings of $25 to
$150 billion within the same period. However, the actual
cost savings from biosimilars will hinge on a multitude of
factors including the regulatory and competitive landscape,
reimbursement strategies, regulatory policies, patient accep­
tance, access barriers, and other variables that influence their
financial impact [18].
The ripple effects of shifts in market dynamics due to
biosimilars are profound, with the potential to upend global
trade patterns. As certain nations enhance their biopharma­
ceutical capabilities and begin to export biosimilars, these
changes could reshape not only domestic markets but also
the international economic landscape.
Amidst these tides of change, the structure of the pharma­
ceutical industry itself may be subject to evolution, with bio­
similar manufacturers gaining new prominence. This could
trigger a cascade of mergers, acquisitions, and strategic alli­
ances as entities within the sector realign to the changing
topography of the industry.
Down the line, insurance formularies emerge as influen­
tial forces, frequently giving preference to biosimilars in
their coverage policies to sway prescription trends and
shape market dynamics in the long term [19]. Collectively,
these elements contribute to a gradual yet profound shift
in the pharmaceutical paradigm, wherein biosimilars not
only impact economic metrics in the short run but also
drive enduring change across healthcare delivery systems.
To expand access to essential medicines in remote commu­
nities, challenging pharmaceutical monopolies has proven to be
an invaluable tactic. These monopolies, in the form of exclusive
contracts and pay-for-delay arrangements, have the ability to
significantly inflate drug costs and limit patient choices, ulti­
mately compromising the quality of healthcare in underserved
areas. Furthermore, these practices worsen the situation by sup­
pressing competition, driving up prices and further impeding
accessibility to life-saving medications. Adding to the challenge
are social factors such as transportation limitations, low health
literacy rates, and indirect healthcare expenses, which further
compound the struggle to obtain vital medicines in remote
regions. As a solution, it is essential to dismantle these mono­
polistic barriers and foster a competitive market in order to
improve accessibility, lower prices, and ultimately enhance the
well-being of these communities [20,21].
4. Conclusion
In the short term, biosimilars offer substantial cost savings and
introduce heightened competition into the pharmaceutical
market. This challenges the pricing strategies of original bio­
logic manufacturers and necessitates adaptive measures from
EXPERT OPINION ON BIOLOGICAL THERAPY 3
healthcare systems in terms of education and regulation. In
the long term, the widespread adoption of biosimilars has the
potential to democratize access to biologic treatments, funda­
mentally reshaping healthcare economies through enduring
price competition. This in turn can stimulate innovation, with
prolonged effects that alter both the economic and accessi­
bility landscapes of global healthcare.
5. Expert opinion
The introduction of biosimilars into the pharmaceutical market
has instigated a significant shift in healthcare economics and
drug accessibility. Existing studies outline strategies not only
for immediate cost reduction but also for achieving long-term
economic equilibrium. However, there are substantial gaps
and limitations that require attention.
To date, the most notable findings highlight the immediate
cost benefits of adopting biosimilars, effectively breaking the
pricing monopoly held by original biologics. A notable defi­
ciency, however, is the fragmented nature of research meth­
odologies that often separate the immediate economic
benefits from the benefits of longer-term system sustainabil­
ity. Moreover, the variations in global regulatory and pricing
strategies complicate the extrapolation of findings across dif­
ferent jurisdictions, with healthcare savings differing among
countries such as the United States, Germany, and Switzerland.
This underlines the necessity for harmonized approaches and
a deep understanding of biosimilar market dynamics.
The potential of biosimilar research is vast, offering
a twofold promise: first, to achieve cost containment in health­
care services, and second, to broaden access to high-quality
biologic treatments. The field’s ultimate goal should be to
integrate biosimilars smoothly into healthcare systems while
fostering an environment conducive to pharmaceutical inno­
vation and competition.
Achieving this objective calls for extensive research to
bridge the current knowledge deficits. Longitudinal studies
that examine the impact of biosimilars on healthcare out­
comes over time are particularly crucial. Additionally, robust
economic models that consider market behaviors, patent laws,
and biologic life cycles are essential to predict long-term
effects accurately. One of the formidable challenges is to
bring together diverse stakeholders, such as policymakers,
healthcare providers, patients, and manufacturers, under com­
mon regulatory and educational frameworks that acknowl­
edge the potential of biosimilars.
In Europe, for example, the European Commission’s com­
mitment to multi-stakeholder collaboration in the biosimilar
sector is exemplified by their organization of annual work­
shops on biosimilar medicines. These workshops, part of the
initiative on corporate responsibility in the pharmaceutical
industry, gather a diverse group including patients, health­
care professionals, academics, public authorities, and indus­
try representatives. They focus not only on increasing access
to biosimilars in oncology and sustainable procurement
policies, but also on the crucial role of educational initia­
tives, as evidenced by the production of information guides
on biosimilars for different stakeholders such as patients
and prescribers [22,23].
4 A. Z. AL MESLAMANI
Looking ahead, biosimilar studies should extend far beyond
current areas and include explorations such as exchanging clin­
ical medication and broadening indications, with economic
impacts that could arise as a result. Biosimilars provide more
flexible and cost-effective treatment options in clinical environ­
ments, thanks to their interchangeability. This interchangeability
between medications allows for seamless substitution at the
pharmacy level, potentially reducing healthcare costs and
expanding patient access to essential medications. The extrapo­
lation of indications, where biosimilars approved for one condi­
tion can be used for another without conducting extensive
clinical trials for each, can expedite the delivery of cost-effective
treatments for various conditions. While these practices are still
subject to stringent regulatory evaluation to ensure safety and
efficacy, they could significantly decrease research and develop­
ment costs, making therapies more cost-effective and affordable.
Funding
The paper was not funded.
Declaration of interest
The author has no relevant affiliations or financial involvement with any
organization or entity with a financial interest in or financial conflict with
the subject matter or materials discussed in the manuscript. This includes
employment, consultancies, honoraria, stock ownership or options, expert
testimony, grants or patents received or pending, or royalties.
Reviewer disclosures
Peer reviewers on this manuscript have no relevant financial or other
relationships to disclose.
ORCID
Ahmad Z. Al Meslamani http://orcid.org/0000-0002-8370-9562
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