Rising drug costs are straining employers financially and limiting patient access to care. But one major breakthrough is helping reverse the trend: biosimilars.

These alternatives to brand-name biologics are driving down costs and expanding access to high-cost treatments, without compromising safety or efficacy. As more biosimilars enter the market, they’re redefining what affordable, high-quality care can look like for both members and the employers who cover them.

In this guide, we’ll break down what biosimilars are, how the FDA ensures their safety and effectiveness, and the real-world impact they’re already making on pharmacy benefit spend.

What is a Biosimilar Product?

A biosimilar is a medication that is highly similar to an already approved biologic, known as the reference product. The FDA approves each biosimilar after confirming no clinically meaningful differences in safety, purity, and potency.

Biologics come from living cells, so an exact copy is not possible. Instead, a biosimilar closely resembles its reference product rather than replicating it identically.

Biologic vs Biosimilar

A biologic is the original medication developed and approved first, often called the reference product. A biosimilar is developed later and built to closely match that reference product. Before approving a biosimilar, the FDA requires proof of no clinically meaningful differences, providing patients and providers the assurance needed to rely on the biosimilar.

Biosimilar vs Generic

Generic drugs are exact chemical copies of small-molecule medications. They are simpler to reproduce and follow a shorter approval pathway.

Biosimilars and generic drugs are both versions of brand name drugs, but they are intrinsically different. Biosimilars are complex biological products that, clinically, have similar effects as the brand product but the molecules vary slightly. Generic products have the same active ingredient and are identical to the brand-name drug. Therefore, biosimilars are not considered generic drugs by the FDA since they are not the exact same molecule, but both must show similar safety and efficacy.

Are Biosimilars Safe?

The FDA reviews each biosimilar through a rigorous approval process. Before approval, the FDA requires extensive comparative analytical studies and clinical data showing no clinically meaningful differences from the reference product. This means you can expect the same safety and effectiveness from the biosimilar over the course of treatment as you would the reference product. Biosimilars are made from the same types of sources (e.g. living cells or microorganisms) and are just as safe and effective as their reference products.

This review confirms the biosimilar performs like the reference product in safety and effectiveness. Patients and providers can expect the same clinical results from an approved biosimilar.

Are Biosimilars Interchangeable?

Not all biosimilars are interchangeable with the reference product. In order for the FDA to consider a biosimilar interchangeable with the reference product, additional requirements must be met to show they are the same, clinically, in any given patient for the same indications. Interchangeable biosimilars can be substituted at the pharmacy for the brand product, while non-interchangeable biosimilars require a new prescription from the prescriber.

A pharmacist may substitute an interchangeable biosimilar without contacting the prescriber, depending on state law. Only some biosimilars carry the interchangeable designation, which is one reason why biosimilar adoption still lags.

Examples of Biosimilars and the Conditions They Treat

The FDA has approved biosimilars across many therapeutic areas. According to FDA guidance on biosimilar and interchangeable biologics, these medications treat a range of serious conditions, including:

• Rheumatoid arthritis

• Psoriasis and psoriatic arthritis

• Crohn's disease

• Ulcerative colitis

• Certain cancers

• Diabetes

• Anemia associated with chronic kidney disease

Humira Biosimilars: A Real-World Example

One of the most well-known examples of biosimilars in action is Humira, a widely used biologic medication prescribed to treat conditions like rheumatoid arthritis and Crohn’s disease. As one of the highest-cost drugs in the U.S., Humira has historically driven significant specialty pharmacy spend for employers and health plans. With the introduction of Humira biosimilars, employers now have access to clinically equivalent treatment options at a lower cost. This increased competition helps reduce overall drug spend while maintaining the same standard of care for patients.

How Can Biosimilar Products Help Members and Employer Groups?

For members, biosimilars offer more options but the members may need a new prescription from their doctor when they switch to a biosimilar product. For employer groups, having competition in the market between biosimilars and the reference products creates a more competitive pricing dynamic for biosimilars.

At SmithRx, we leverage this to source biosimilar products at the lowest net cost and pass on 100% of the savings to the employer group. Contact us today to learn how to save on prescription costs.

Frequently Asked Questions

What is a biosimilar?

A biosimilar is a biologic that is highly similar to an already approved reference product. It offers a lower-cost option with the same expected clinical performance.

Are biosimilars the same as generics?

No. Generics are exact chemical copies of small-molecule drugs. Biosimilars are highly similar versions of complex biologics and follow a different FDA pathway.

Are biosimilars as safe and effective as the original biologic?

Yes. FDA-approved biosimilars are expected to perform the same as the reference product. The FDA confirms no clinically meaningful differences before approval.

Are biosimilars interchangeable with the reference product?

Some are. A pharmacist can substitute an interchangeable biosimilar without contacting the prescriber, depending on state law.

What are the risks of biosimilars?

FDA-approved biosimilars carry safety and effectiveness expectations similar to the reference product. Only some biosimilars carry the interchangeable designation, so ask your provider before any substitution.

Will biosimilars save money?

Biosimilar competition can help lower prices by giving plans more options. Actual savings vary by plan design and formulary choices. For more, the FDA explains biosimilar basics for patients.