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Biosimilars may cut health spending by $54 billion over next decade shows new report


According to a new analysis from RAND Corp, introducing biosimilar versions of complex biologic drugs could cut healthcare spending in the US by $54 billion over the next decade.

The savings estimate is about 20 percent larger than a similar analysis done by RAND researchers three years ago, representing both improved analysis methods and rapid growth in spending for biologics overall, reports Healthcare Finance.

Biologics are complex, protein-based drugs manufactured in living systems and include insulin, monoclonal antibodies to block inflammation in rheumatoid arthritis, and a range of drugs to treat cancer, multiple sclerosis and other serious diseases. But they often are expensive. While 1 percent to 2 percent of the nation’s population is treated with a biologic each year, the drugs accounted for 38 percent of prescription drug spending in 2015, reports Healthcare Finance. Hence, the researchers estimate that that biosimilars will cut spending on biologics by about 3 percent over the next decade.


The actual savings hinge on how competition in the pharmaceutical industry evolves and what regulatory decisions are made. The authors of the report say future research will be needed to determine whether savings are realized and who benefits from any reductions in spending.