Biosimilars 101: Understanding the Basics and Benefits

Rising drug costs are squeezing employers 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 Are Biosimilars?

To understand what biosimilars are, let’s start with biologics. Biological products (biologics) are complex, living cell-derived medications used to treat conditions like diabetes, autoimmune diseases such as Rheumatoid Arthritis and Crohn’s Disease, some cancers and more. 

Biosimilars are highly similar versions of biologic drugs and are designed to work just like the reference products in terms of safety, strength, dosage, and clinical outcome - but at a significantly lower cost. Since biologics come from living organisms, no two batches are completely identical. Likewise, biosimilars aren’t exact copies, but are highly similar to the reference product.

The Differences between Biosimilars and Generics

While generic drugs and biosimilars both offer cost-effective solutions, they are some important distinctions to note:

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As shown above, generics are exact copies of their reference drugs, while biosimilars, although highly similar, are not identical due to the inherent complexity of biologics. These differences impact the development process and regulatory pathway for biosimilars, making their approval more involved than for generics.

Now that we’ve outlined the key distinctions between biosimilars and generics, let’s explore how the FDA evaluates biosimilars to ensure they are both safe and effective.

How the FDA Evaluates Biosimilars for Safety and Effectiveness

If you’re wondering about the safety and efficacy of biosimilars, and if they can be trusted to work as well as the original biologic, the short answer is yes! The longer answer lies in the rigorous FDA approval process. To be approved as a biosimilar, a drug must undergo a detailed evaluation process, including studies to prove that it is similar in structure and function to its reference biologic as well as various clinical trials to check how it works in the body, and real-world evidence to ensure it remains safe and effective after approval.

In order to be approved for market, biosimilars must show no clinically meaningful differences compared to the reference product. This is where the approval path for biosimilars differs from traditional drugs. While a new biologic must prove its effectiveness from the ground up, biosimilars work off of the existing clinical data of the reference biologic. This streamlines development and saves time and money - without compromising quality.

Biosimilars and Interchangeability

Another important factor we have to look at when talking about biosimilars is interchangeability, which refers to the FDA’s designation that a biosimilar can be substituted for the reference biologic without any significant risks in regards to safety and efficacy. Currently, the FDA requires additional studies to confirm interchangeability, but there’s growing expectation that these requirements may soon be loosened.

Though some individuals may be skeptical about switching from a reference biologic to a biosimilar, there is no need for concern. Patients can rely on biosimilars to provide highly similar safety, effectiveness, and results as their reference products through their treatment. According to the FDA, switching between a biosimilar and its reference product does not increase risks or side effects. 

Creating biosimilars is a complex and highly technical process. The result? Affordable, high-quality alternatives to expensive medications. In fact, the Biologics Price Competition and Innovation (BPCI) Act was created to encourage this kind of competition - helping bring more biosimilars to market, which leads to greater access and lower costs.

The Benefits of Biosimilars

Biosimilars not only offer an affordable alternative to brand-name biologics, but they also bring significant value to patients, and the healthcare system as a whole. Now that we know what biosimilars are and how they are approved, let’s look at some of their key benefits.

• Lower Drug Costs: Biologics are among the most expensive therapies on the market. By offering lower-cost alternatives, biosimilars can drastically reduce prescription drug spending.

• Increased Access for Better Health Outcomes: When cost and access are no longer barriers to treatment, patients are more likely to stay on therapy and achieve better health outcomes.

• Competition: With more biosimilars entering the market, more options are available at lower costs.

• Reduced Healthcare Burdens: Biosimilars help lighten the load on our healthcare system by offering cost-effective treatment options that deliver no difference in therapeutic value.

Real-World Success: Yusimry and SmithRx

At SmithRx, we’ve been leading the charge in biosimilar adoption. An example? Yusimry, a biosimilar to Humira (adalimumab), offers significant savings compared to Humira which was one of the highest grossing drugs in the world before patent expiration. We were the first PBM to offer a Humira biosimilar, and the results have been nothing short of transformative as we actively transition members to the low-cost biosimilar.

In 2024, we saw:

• 90% of Humira claims transitioned to Yusimy

• 90% in savings for those clients that we transitioned

• $45 Million in savings in the autoimmune category, largely due to this transition

We’re actively helping members transition to more affordable options, through our Connect 360 program driving down costs and improving overall health outcomes. In 2024 alone, our Connect 360 suite of programs delivered $200 million in savings. One of the many Connect 360 solutions was transitioning members to low-cost alternatives like Yusimry and other biosimilars

It doesn’t stop there! Earlier this year, we announced the introduction of Stelara biosimilars to our Connect 360 Autoimmune Program, projected to save our clients $14.5 million in prescription drug costs.

Maximizing Savings and Access with Biosimilars

Biosimilars are a practical, cost saving solution that’s improving lives and transforming how we think about drug access and costs. By offering highly similar alternatives to expensive biologic medications, biosimilars are helping reduce overall healthcare costs for employers, expanding access for members, and reducing healthcare burdens while achieving better overall health outcomes. With the FDA’s stringent evaluation process, you can feel confident in their safety and effectiveness.

At SmithRx, we’re committed to helping employers get the best savings possible by providing them access to biosimilars and other cost saving solutions. Whether it's through early adoption of biosimilars like Yusimry or our robust Connect 360 program, we’re here to help you save. Reach out to a SmithRx representative today and experience the benefits of partnering with a modern, transparent PBM.