Independent health policy research organization, the Rand Corporation, searched peer reviewed literature for studies on potential direct cost savings from biosimilars. Relevant industry perspectives, government publications and reports from various consulting firms were also reviewed.

The review identified a range of studies, some presenting retrospective empirical analyses and others reporting prospective modelling or prescriptive policy analysis. The studies drew on a variety of sources for the basis of their estimates, including evidence from US generics markets and from the EU’s experience with biosimilars. Many studies included analysts’ assumptions and other expert opinion.

The results of the review showed that overall studies estimating the short- to mid-term, i.e. within 10 years, savings from biosimilars arrive at a range of 10−50% reduction in unit price. However, the impact on spending will be smaller than the difference in price because it is unlikely that every patient will transition from an originator to a biosimilar.

The study assumed year-on-year originator growth of 1%, an increase in the share of originator sales exposed to biosimilar competition from 10% in year 1 to 20% in year 10, biosimilar market penetration of 6% and a biosimilar price discount due to competition of 35%.

Given these assumptions, the potential direct cost savings calculated were US$44.2 billion over 10 years, or about 4% of total biologicals sales over the same period. Reducing the price discount to 10%, however, would cut potential savings to US$12.6 billion over 10 years.

Increasing penetration to 90% (with a 35% reduction in price) would increase cost savings to US$66.2 billion over 10 years, while decreasing penetration to 30% would result in cost savings of US$33.9 billion over 10 years.

The potential for cost savings varies across biological classes, with monoclonal antibodies, anti-TNF-alpha products and insulins together accounting for more than 60% of estimated savings.

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