How Biosimilar Cost Savings Benefit Health Systems

Biosimilars offer a compelling opportunity for healthcare organizations to manage rising costs while maintaining high-quality care. These therapies, comparable to already approved biologic drugs, can generate significant cost savings without compromising clinical outcomes. The most direct financial impact is often felt by patients and payors, with lower out-of-pocket costs and reduced therapy expenditures. At the same time, health systems and providers benefit from the clinical value—biosimilars deliver outcomes with no clinical difference as compared to reference biologics, ensuring that care quality is not compromised.

For decision-makers, understanding the role of biosimilars is essential. Their adoption can help optimize therapy access, strengthen formulary management, and support long-term sustainability across the healthcare system.

Evaluating biosimilars as part of a comprehensive strategy allows organizations to balance their cost savings with quality outcomes, creating a more resilient and efficient care delivery model.

The Current Biosimilar Market

The U.S. biosimilar market has experienced substantial growth in recent years, reflecting a shift in the accessibility and affordability of specialty drugs. Key highlights include:

FDA approvals: Over 70 biosimilar medicines have been approved as of October 2025, with many more in development.
Cost savings: Biosimilars have generated more than $50 billion in cumulative estimated savings since 2015.
Pricing advantage: The average sales price of biosimilars typically runs 15-35% lower than their reference biologics. This pricing difference creates substantial opportunities for healthcare systems to reduce drug spending while maintaining quality patient therapy.

The first biosimilar entry for major biologics like Humira has started transforming the market. This biosimilar competition benefits everyone in the health care system:

Health systems, through lower therapy costs and improved resource allocation
Payors, by supporting cost-effective coverage and formulary management
Providers, who can deliver recommended therapies while optimizing operational efficiency

Areas seeing the most biosimilar activity include:

Oncology and immunology: High-cost specialty treatments where switching to biosimilars may unlock significant per-patient savings.
Resource optimization: Savings from biosimilar adoption can be reinvested to expand access, improve patient throughput, and enhance overall care efficiency.

But realizing the full potential of biosimilars also depends on effective collaboration across the healthcare ecosystem. Coordinated efforts among manufacturers, payors, and providers—including specialty pharmacies—may help streamline therapy initiation, manage coverage, and support adherence.

Barriers to Biosimilar Adoption

Despite clear cost-saving potential, biosimilar adoption faces several structural and perceptual challenges that can slow market penetration.

Patent and Exclusivity Hurdles

Patent protection and market exclusivity create significant entry barriers for biosimilars. Reference biologic manufacturers often hold multiple patents covering the drug, manufacturing processes, formulations, and delivery devices. These “patent thickets” can delay biosimilar competition for years beyond the original patent expiration.

Legal complexity: Ongoing patent litigation can prolong market uncertainty and increase development costs, impacting biosimilar pricing strategies.
Regulatory exclusivity: Biologics in the U.S. receive 12 years of FDA market exclusivity, independent of patent status, further delaying biosimilar availability.
Market entrenchment: During exclusivity periods, reference products often secure strong market positions, making it more challenging for biosimilars to gain traction once approved.

Prescriber and Stakeholder Perceptions

Adoption is also influenced by perceptions among prescribers and healthcare teams. Many clinicians remain cautious about switching patients to biosimilars, despite robust evidence supporting safety and efficacy. Key considerations include:

Educational gaps: Lack of familiarity with biosimilar approval processes and clinical equivalence can slow provider adoption. Targeted education and clear, data-driven communication may help address these concerns.
Operational confidence: Providers may require workflow support—such as streamlined therapy initiation, coverage navigation, and adherence monitoring—to feel confident integrating biosimilars into care plans.
Patient impact considerations: Patient perceptions (including the “nocebo effect”) can influence adherence and treatment outcomes. Support programs that facilitate smooth transitions and clear communication may help mitigate these effects, indirectly enhancing provider efficiency and clinical results.

Biosimilars’ Impact on Healthcare Spending

The introduction of biosimilars has fundamentally reshaped how health systems manage drug budgets and allocate resources. These cost-effective alternatives generate savings across the healthcare ecosystem while maintaining high standards of care.

System-Wide Savings

Generic and biosimilar medicines together represent one of the most effective tools for controlling health care costs. While generics have long reduced spending for small-molecule drugs, biosimilars now extend similar benefits to high-cost biologics. The biosimilar medicines savings report consistently shows year-over-year growth in both usage and total savings.

For example, a cancer center that switches to biosimilar versions of common oncology drugs may save millions annually, enabling reinvestment into expanded patient care, facility upgrades, or additional services.

Insurer Approaches to Biosimilar Coverage

Insurance coverage policies and reimbursement models are central to biosimilar adoption. Progressive payors promote biosimilar use while maintaining clinical flexibility.

Strategies may include placing biosimilars on preferred formulary tiers, implementing step therapy protocols, and offering financial incentives that encourage adoption when clinically appropriate—all while respecting prescriber discretion.

Patient Cost Implications

Reduced out-of-pocket costs for patients also generate system-wide benefits. Lower copays improve adherence and reduce costly treatment interruptions. For chronic conditions requiring long-term biologic therapy, cumulative savings can reach tens of thousands of dollars, improving continuity of care and supporting better health outcomes.

Coordinated support and coverage strategies allow health systems and payors to maximize both financial and clinical value from biosimilars.

The Role of Pharmacy Benefit Managers

Pharmacy benefit managers (PBMs) serve as crucial intermediaries in the biosimilar ecosystem, influencing which medications reach patients and at what cost. Their decisions directly shape adoption patterns across health systems and payor networks.

Key ways PBMs impact biosimilar adoption include:

Formulary management and pricing negotiations: PBMs determine which drugs are preferred on formularies and at what cost, influencing prescribing patterns.
Rebate structures: Reference biologic manufacturers often offer substantial rebates, which can complicate cost comparisons with biosimilars.
Coverage policies and reimbursement: Favorable reimbursement for biosimilars may help accelerate adoption, while policies that favor reference products could slow uptake.
Total cost-of-care perspective: Progressive PBMs consider long-term savings and overall healthcare sustainability, beyond short-term rebates.

Specialty pharmacies support providers in navigating PBM requirements by:

Streamlining approval and prior authorization processes
Coordinating with multiple PBMs to optimize therapy selection
Leveraging data-driven insights to maximize cost savings for health systems

Challenges remain: Transparency in PBM decision-making can vary, which sometimes makes it more difficult for providers, payors, and specialty pharmacies to fully align on strategies. As the biosimilar market evolves, greater collaboration between all parties will help ensure that adoption supports both clinical and financial goals.

Strategies to Boost Biosimilar Uptake

Increasing biosimilar adoption requires coordinated strategies across multiple stakeholders, including health systems, providers, payors, and specialty pharmacies. Effective initiatives address barriers while creating practical incentives for change.

Education as the Foundation

Evidence-based education is critical for providers. This goes beyond basic biosimilar facts to address real-world concerns, such as switching stable patients or initiating new therapies. Health systems can implement:

Provider training sessions highlighting biosimilar safety, efficacy, and clinical equivalence
Peer-to-peer learning through biosimilar champions who advocate for appropriate use
Decision support tools integrated into electronic health records to flag biosimilar options at the point of care

While patient education remains relevant, the focus for stakeholders is enabling providers to confidently prescribe biosimilars and integrate them into care pathways.

Incentives for Provider Adoption

Across the healthcare system, financial and structural incentives can help accelerate biosimilar uptake when thoughtfully aligned with clinical workflows. These may include:

Sharing savings with clinical departments that increase biosimilar use
Recognizing high-performing providers through quality metrics tied to value-based care initiatives
Embedding biosimilars into clinical pathways as the default choice for new patients, with flexibility for medical exceptions
Reducing operational burden through streamlined prior authorizations and insurance approvals

These strategies, while not offered directly by specialty pharmacies, illustrate how adoption can be reinforced across the system while preserving provider autonomy and patient-centered care.

Payment Model Reforms

Current reimbursement structures sometimes misalign incentives for biosimilar adoption. To address this, emerging reform approaches across payor and policy environments aim to promote cost-effective prescribing. Examples include:

Value-based payment models that reward total cost-of-care savings
Site-neutral payments that remove artificial financial advantages for specific administration sites
Biosimilar-specific reimbursement incentives to offset initial switching costs
Reference pricing models that encourage cost-effective choices while preserving patient and provider flexibility

Specialty pharmacies are not responsible for implementing these models, but awareness of their potential impact is important. By aligning financial incentives with clinical goals, these broader reforms create an environment where biosimilar use supports both high-quality care and sustainable healthcare spending.

Sustainable Healthcare with Biosimilar Adoption

Biosimilar cost savings offer a strategic opportunity to improve healthcare affordability and system efficiency. By providing the same clinical outcomes at lower costs, these medicines allow health systems to reallocate resources, expand patient access, and enhance the management of biologic therapies.

Realizing these benefits requires coordinated action across the healthcare ecosystem. Providers need ongoing education and decision support to prescribe biosimilars confidently, payors must design policies that encourage appropriate use, and specialty pharmacies play a critical role in integrating clinical expertise, care coordination, and data-driven monitoring to optimize outcomes and maximize cost savings.

The biosimilar pipeline continues to expand, increasing competition and amplifying potential savings. Partnering with California Specialty Pharmacy enables health systems to navigate operational and financial complexities, ensure seamless care, and support providers in delivering high-value therapy.

Connect with our team to explore tailored solutions and begin maximizing the impact of biosimilar adoption today.

Frequently Asked Questions (FAQ):

Do biosimilars save money?

Yes. Biosimilars are typically priced 15% to 35% lower than their reference biologics. This price difference can generate substantial savings across health systems, payors, and provider networks, while also offering lower out-of-pocket costs to the patient.

Are biosimilars cheaper than generics?

While biosimilars are more affordable than reference biologics—around 30% lower—they are not as inexpensive as traditional generics, which can offer up to 80% savings on small-molecule drugs. Biosimilars, however, provide cost reductions in the complex biologics segment, where generics are not available.

Are Humira biosimilars cheaper?

Yes. Following the end of Humira’s patent exclusivity in 2023, multiple biosimilar alternatives entered the market, significantly lowering treatment costs for health systems and patients alike.

What are the six types of cost savings in business?

Healthcare decision-makers often evaluate savings in six areas: short-term reductions in drug spending, long-term cost avoidance, process efficiencies, volume-based discounts, total cost of ownership optimization, and operational improvements that support more efficient care delivery.

References:

Accessible Medicines. 2024 Savings Report.
https://accessiblemeds.org/resources/reports/2024-savings-report/
IQVIA Institute. Assessing the Biosimilar Void in the US.
https://www.iqvia.com/Insights/The-IQVIA-Institute/Reports-and-Publications/Reports/Assessing-the-Biosimilar-Void-in-the-US
Allport T. Data & Market Exclusivity as Incentives in Drug Development. Scendea.
https://www.scendea.com/articles/blog-post-title-one-25srn-58l3m-hef63
Colloca L, Miller FG. The nocebo effect and its relevance for clinical practice. Psychosom Med.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3167012/

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