Drug Makers And Payers To Blame For Biosimilar Barriers In U.S. Market
The prescription drug supply chain is a complex web of stakeholders, each with their own interests and motivations. However, one thing that all parties can agree on is that patients' out-of-pocket costs for many branded medicines can be prohibitively high. This is particularly true for biologics, which are drugs made from living organisms that can activate the immune system to treat a range of conditions, including diabetes, multiple cancers, and numerous autoimmune disorders.
The Launch of Biosimilars
Biosimilars are biologic products that are highly similar to an already approved reference biologic, with no clinically meaningful differences in safety, purity, and potency. Starting in 2015 in the U.S., they first became available in the filgrastim class of drugs, used to help prevent infection in people who have low levels of white blood cells.
Since then, biosimilars have launched primarily in autoimmune and cancer therapeutic classes, referencing 13 unique reference products. Biosimilar competition can substantially reduce the cost of expensive biologic medicines.
The Challenges Facing Biosimilars
However, biosimilars continue to face challenges unique to the American healthcare system, including persistent and lengthy patent litigation battles and dynamics in the payer or pharmacy benefit manager space that can impede biosimilar entry and often don't favor uptake of the lowest-priced biosimilars.
While biosimilar uptake has gained traction in the past five years after a sluggish start, it's far from optimal. According to IQVIA, 90% of the 118 biologics losing exclusivity in the next decade have no biosimilar candidates in development.
The Role of Patent Thickets
A poorly functioning market is likely also at fault, which dims the prospects of sales for biosimilar manufacturers contemplating whether to develop products. Different kinds of anti-competitive business practices violate the principle that free and fair competition from generic or biosimilar alternatives at (often much) lower prices should follow a defined period of patent exclusivity.
In this context, we see in the U.S. that manufacturers of biosimilars are often blocked from entry and the lowest-cost products are usually not preferred by payers.
The Problem of Patent Thickets
Described by the economist Carl Shapiro as a "dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology," branded biopharmaceutical manufacturers use patent thickets to extend the market exclusivity of their products, often resulting in lengthy patent litigation.
They've been deployed to prevent biosimilars from entering the market, which can limit patient access to cheaper products, a case in point being Humira (adalimumab), used to treat various autoimmune conditions.
The Case of Humira
In a legal ruling reported in 2022, a 7th Circuit Court Federal Judge affirmed dismissal of claims challenging AbbVie's "patent thicket" around Humira (adalimumab).
Controversially, the judge explicitly questioned whether there's anything "wrong with [a product having] 132 patents."
By Easterbrook's reasoning, building a patent fort to fend off competition in perpetuity is permissible so long as the patents are legitimate.
The Impact on Patients
Humira finally relinquished its monopoly right in the U.S. in 2023. Originally, the biologic was slated to lose its patent in 2018.
A court tussle in 2017 led to a settlement in which biosimilars could not launch until January 2023.
Despite getting approval from the Food and Drug Administration before 2023, six adalimumab biosimilars couldn't launch due to a "compromise" deal struck between Humira's sponsor and biosimilar manufacturers.
The Limited Market Share of Biosimilars
One year after their launch in the U.S., these biosimilars captured under 3% of total adalimumab prescriptions.
Humira still held a remarkable 77% of the market share for adalimumab products in early 2025.
The European Perspective
By contrast, in Europe biosimilars that reference Humira have already been on the market for seven years.
Within one year of market entrance, adalimumab biosimilars had more than 50% of market share in Germany.
The Problem with Pharmacy Benefit Managers
The problem of potentially anti-competitive practices isn't confined to drug companies' behavior. Pharmacy benefit managers have at times favored more expensive products over similar or even bioequivalent versions that are cheaper.
Warped financial incentives sometimes pervade the pharmaceutical supply chain.
The Impact on Patients
Creative pricing strategies, such as launching two different list prices for a biosimilar product, can further confuse patients and limit their access to lower-cost options.
For example, OptumRx launched a private-label version of Stelara (ustekinumab) called Wezlana through its Nuvaila business, offering both a high- and low-list priced version.
The Impact on Biosimilar Manufacturers
Biosimilar manufacturers who don't reach agreements with these PBMs may be excluded altogether from coverage or only have severely restricted access.
Market Transparency and Competitive Markets
Broadly speaking, competitive markets have numerous sellers and buyers, all of whom have relevant information to make rational decisions about the products being bought and sold.
There's market (information) transparency, and firms can freely enter or exit the market.
The Issue with Prescription Pharmaceuticals
This isn't invariably the case with prescription pharmaceuticals and particularly with respect to biosimilars. Drug makers and payers are both to blame for entrance barriers, information asymmetry, and often non-transparent pricing.