United States

The United States is the world’s largest pharmaceutical market and Americans pay higher prices for prescription drugs than any other nation. While federal law in the US does not permit payers to consider drug cost as part of decision-making, the mounting expense of cancer drugs and other innovative biologics is taking its toll on insurers (including the government-funded programs Medicare and Medicaid), and above all on patients who typically share in the cost of medications. Those diagnosed with life-threatening or serious chronic diseases often face significant financial hardships in order to afford modern biologics or may be forced to forego optimal treatment. In 2010, the 351(k) regulatory pathway was established for approval of biosimilars and on 6 March 2015, a biosimilar of filgrastim became the first product to be approved by the FDA via this route, a pivotal event that prompted a significant escalation in biosimilar development activity. 

Current access to originator biologics in the United States   +

On its own, the United States (USA) accounts for one-third of the global spend on drugs per year.1 Pharmaceutical prices are higher in the USA than elsewhere in the world2,3 and, in contrast to many other developed countries, cost-effectiveness has so far not been accepted as a legitimate consideration in choice of treatment. Although the Affordable Care Act created a body to compare the effectiveness of treatments, Congress barred it from considering cost. However:

  • In 2013 it was reported that cancer drug prices in the USA had doubled in the past decade, from an average of USD $5,000 per month to more than $10,000.2
  • Eleven of the 12 cancer drugs the FDA approved in 2012 were priced at more than $100,000 per year, double the average annual household income.4
  • The top-tier cancer drugs cost twice as much in the USA as they do in Canada and in many EU countries.5
"Thousands of US cancer patients, even many with insurance, face the same dire decision: Go bankrupt or die." 7

The most expensive treatments in cancer, as in many other fields, are biologics. US spending on biologics has been increasing by as much as 15–20% each year.5 The price of biologic disease-modifying anti-rheumatic drugs (DMARDs) used in rheumatoid arthritis and other chronic autoimmune conditions rose by more than 45% in 5 years (2008–2012).6

Some US clinicians are very concerned about the cost of biologics and have publicly (and sometimes collectively) confirmed that this influences their prescribing decisions.3 US insurers increasingly consider cost-effectiveness when deciding whether to cover a drug and how much of its cost patients themselves should fund (‘co-pays’). A 2014 survey of more than 100 American rheumatologists found that 80% encounter moderate-to-strong control by payers when prescribing biologics for rheumatoid arthritis.7 There are also state-by-state variations in these policies, which has created regional inconsistencies.

The impact of rising drug costs is notable:

  • Medical insurance premiums have more than doubled since 1999.8
  • One in five families affected by cancer use up their personal savings paying for treatment.8
  • Applications by patients for charitable aid to fund their treatments are increasingly common.9
  • One in six of all US bankruptcies is due to medical expenses.8
  • Up to 10% of patients with chronic myeloid leukemia discontinue a biologic treatment – which is widely recognized to be life-saving – because of its cost.3,10 
"It's not until you see the list of the 20 most expensive drugs in the US that the reason why Medicare will become insolvent by 2024 hits home." 12

For a patient with a terminal illness, assessment of drug cost-effectiveness is a very personal matter. For some, living to see a child’s graduation or a spouse’s landmark birthday may be worth every penny. However, some patients may be choosing financial ruin on the basis of a misunderstanding of likely treatment benefit. A study published in the New England Journal of Medicine in 201211 reported that 81% of patients with advanced colon cancer and 69% of patients with advanced lung cancer did not understand that their drug treatment was unlikely to cure them.

The US government-funded insurance programs Medicare and Medicaid are legally obliged to pay for FDA-approved treatments. But – as with private insurers – expensive new drugs have unsurprisingly taken their toll on these cash-strapped programs.

Regulatory guidelines in the United States   +

  • Perhaps nowhere are the challenges and uncertainties of the new biosimilar era more evident than in the USA, which is ultimately expected to be the largest market for these products. The Biologics Price Competition and Innovation Act, which created an abbreviated approval pathway for biosimilars – known as 351(k) – became law in March 2010, and the FDA released a set of much-anticipated draft guidance documents on biosimilar development in February 2012. 
  • However, the first biosimilar application in the USA was not accepted for review by the FDA until 2014. It was for a biosimilar of filgrastim, intended to treat neutropenia.
  • On 7 January 2015, the FDA’s Oncologic Drugs Advisory Committee (ODAC) concluded that the candidate biosimilar was highly similar to the originator product and unanimously recommended its approval. On 6 March 2015, this product was approved by the FDA – the first US biosimilar licensed via the 351(k) pathway. 

It is important to note that there are currently two distinct FDA approval pathways in use for biologics. Some have been approved under the Federal Food Drug and Cosmetic Act as ‘drugs’, while others have been approved as ‘biologics’ under the Public Health Service Act. By March 2020, all biologics will be reviewed under the Public Health Service Act.

For now, if the originator biologic product was originally approved as a ‘drug’, then a new version of that product (i.e. a product which depends at least in part on the data of the originator) is known as a ‘follow-on biologic’ or ‘follow-on protein’ as opposed to a biosimilar. The diagram below shows the different FDA drug approval pathways.


'Follow-on biologics' approved via the 505(b)(2) pathway between 1998 and 2006 comprise versions of recombinant glucagon, hyaluronidase, calcitonin salmon and somatropin. The newest product to be approved via the 505(b)(2) pathway (in January 2016) was a follow-on version of insulin glargine.

FDA guidelines on the data required to satisfy regulatory requirements for biosimilarity via 351(k) were finalized in early 2017. The guidance states that the degree of similarity between a biosimilar candidate and its originator – as shown by the analytical data – should determine a sponsor’s next steps.

Outcome of analytical data

Next steps

‘Not similar’

Further development through the 351(k) regulatory pathway is not recommended.


Further analytical information is needed to determine if the product is sufficiently similar to the originator.

‘Highly similar’

The biosimilar candidate meets the statutory standard for analytical similarity, meaning pre-clinical and clinical studies are warranted to resolve residual uncertainty and support a demonstration of biosimilarity.

‘Highly similar with fingerprint-like similarity’

The biosimilar candidate meets the statutory standard for analytical similarity based on extremely sensitive methods and the sponsor can consider using a more targeted and selective approach to conducting pre-clinical and clinical studies.


The FDA advises biosimilar sponsors to use state-of-the-art analytics to detect potential differences between originators and biosimilar candidates, and to engage with regulators early on to discuss their plans for data generation.

Some experts regarded filgrastim as a relatively ‘low-risk’ product and warned that monoclonal antibody biosimilars, for example, may face tougher regulatory hurdles in the USA than they had in Europe.13 However, the first biosimilar monoclonal antibody (a biosimilar of infliximab) was approved by the FDA in April 2016 and was followed a few months later by approvals for biosimilars of etanercept and adalimumab.

Key US regulatory areas include:

  • Requirements for extrapolation: The biosimilars approved by the FDA have generally had their licenses ‘extrapolated’ to include all the licensed indications of the originators. However, extrapolation is by no means inevitable for all biosimilar candidates and is expected to be evaluated on a case-by-case basis.
  • Requirements for interchangeability: The FDA intends to approve biosimilars as ‘non-interchangeable’ or ‘interchangeable,’ meaning that the biosimilar may or may not be substituted for the originator at the pharmacy level without approval of the prescribing physician. In order for a product to be declared interchangeable by the FDA, it is ‘expected to produce the same clinical result as the reference product in any given patient.’ The risk in terms of safety and efficacy cannot be greater than using the reference product without switching. Basically, the FDA expects to see no increase in risk in terms of reduction in efficacy or increase in safety concerns between the two products upon multiple alternating or switching cycles. For simple protein products, the FDA may be able to grant an interchangeability designation at time of approval, but for more complex biologics such as monoclonal antibodies, the FDA may require post-marketing data in addition to clinical study switching data prior to granting an interchangeability designation. The FDA released full draft guidance for demonstrating interchangeability in early 2017.
  • State legislation on pharmacist substitution: Even if a biosimilar is granted an FDA interchangeability designation, individual state legislation may govern whether pharmacy-level biosimilar substitution for a prescribed branded product is permissible. However, it is possible that state laws may not carry much weight once interchangeability has been FDA-approved. An up-to-date record of state legislation on pharmacist substitution of biosimilars is available here.14  
  • Product namingIn September 2015, the FDA issued provisional naming guidance for biosimilars, which proposed that originator biologics and biosimilars are given the same non-proprietary name, but with a unique four-letter suffix for all biologics, including originators. The proposed naming convention seeks to prevent inadvertent substitution of biologic products that are not deemed interchangeable by the FDA, as well as to support safety monitoring by making it easier to accurately track product usage.15,16 The FDA’s naming guidance was finalized in early 2017, when it was also announced that each suffix should be devoid of meaning rather than signifying the manufacturer’s name as originally proposed.
  • Product labelling: As of April 2016, the FDA requires biosimilars to be identified as such on product labels. However the clinical data cited on the label should be that of the originator.

Biosimilar approvals in the United States   +

An up-to-date record of FDA-approved biosimilars can be found here.  

  • The FDA began approving ‘follow-on biologics’ (a general term for less expensive versions of off-patent originator biologics) as far back as 1998 and – over the subsequent 8 years – follow-on biologics of recombinant glucagon, hyaluronidase, calcitonin salmon, and somatropin were granted licenses. However, these were approved via the 505(b)(2) pathway, which pre-dated the establishment of the dedicated biosimilars approval pathway, 351(k). As such, these early products are not given the term ‘biosimilar’ in the US. See Regulatory guidelines in the United States. 

  • Sandoz’s Zarxio®, the first FDA-approved biosimilar (which has the non-proprietary name filgrastim-bflm), was launched in the US on September 3, 2015, approximately 6 months after it received approval. The delay was caused by a patent infringement lawsuit initiated by Amgen, manufacturer of the originator filgrastim, Neupogen®. The dispute focused on whether Sandoz had violated the law by not informing Amgen about its application to the FDA for approval of Zarxio® or revealing its plans to manufacture a biosimilar of filgrastim in the first place (this communication of information between biosimilar and originator companies is informally known as the "patent dance"). The outcome of the lawsuit was that biosimilar manufacturers are not obliged to share their plans with originators, but do have to give them 180 days’ notice of their intention to bring their product to market, which can only be done once FDA approval has been secured.17,18 Sandoz appealed the 180-day notice ruling and the issue was eventually escalated to the US Supreme Court (SCOTUS). In June 2017, SCOTUS unanimously decided that the 180-day notice ruling should be overturned. The decision was highly significant for all biosimilar manufacturers targeting the US market, enabling them to launch their products without the need for an additional 6-month wait following FDA approval.

  • FDA decision-makers have grown in confidence since the early days of reviewing biosimilar applications and, in 2016, they approved biosimilars of infliximab, etanercept, and adalimumab, with unanimous votes in the case of the latter two. The approvals included extrapolation of the biosimilar licenses to other licensed indications of the respective originators. However, as before, lawsuits swiftly followed and – in the case of adalimumab – AbbVie (the manufacturer of the originator Humira®) may succeed in preventing the launch of the biosimilar competitor (Amgen’s Amjevita®) for several years due to Humira’s complex, multi-layered patents.

  • Zarxio®, and the first US-approved biosimilar of infliximab, Pfizer’s Inflectra®, are both marketed at a wholesale price 15% lower than that of their respective originators, Neupogen® and Remicade®. However, in July 2017, Merck and Samsung Bioepis launched Renflexis, a second biosimilar of infliximab, which had gained FDA approval in April of that year. Renflexis was launched at a 35% wholesale discount to the list price of Remicade® – over double the discount offered by Inflectra®, signalling the start of biosimilar pricing competition similar to that which has already been seen in Europe.19,20

  • The American Society for Oncology (ASCO) announced in its 2015 guidelines that using biosimilar filgrastim as an alternative to the originator in clinical practice is appropriate21 and other academic societies have since endorsed the use of biosimilars in their fields.

  • US payers have also begun to signal preferences for biosimilars in their coverage plans. In August 2016, CVS Heath Corp., which administers drug-benefit plans for employers and insurers, announced that – from January 1, 2017 – it will drop coverage of Neupogen® and instead cover only Zarxio®, for which it has negotiated an additional discount.

  • NOTE: Eli Lilly’s Basaglar®, a follow-on biologic of insulin glargine, has also been approved and launched in the US; however this was not via the FDA’s 351(k) pathway but instead via the 505(b)(2) pathway, which officially classifies Basaglar as a ‘follow-on biologic’ rather than a biosimilar (see Regulatory guidelines in the United States). As with filgrastim, CVS Health Corp. has decided to drop coverage of the originator, Lantus®, in favor of Basaglar.22   

The future of biosimilars in the United States   +

  • Because of the need for comparative clinical trials, savings from biosimilars cannot match those achievable with small-molecule generics, which are estimated to have saved US consumers approximately $1 trillion in the decade 2002–2012.23
  • Nonetheless, because of the high unit cost of biologics, and the growing need for them in clinical practice, biosimilars are still expected to achieve substantial savings. There is no consensus on the scale of the savings and they may be influenced by numerous factors, including the timing of FDA approvals, whether indication extrapolation is approved, the granting of interchangeability licenses, prescriber attitudes, competition between biosimilar versions of the same originator, and many other variables. However, a number of authoritative stakeholders have made predictions regarding potential savings in the US. For example:

      • The Rand Corporation estimates that the introduction of biosimilars may reduce direct spending on biologics in the USA by $44.2 billion from 2014–2024.24
      • Express Scripts, the nation’s largest manager of pharmacy benefits, has gone so far as to suggest that biosimilar competition for the top 11 biologics could save as much as $250 billion over the same decade.25
      •  A January 2017 forecast report from QuintilesIMS predicts savings of $27 to $58 billion from the use of biosimilars in the US over the next 5 years.26
  • In March 2015, the Centers for Medicare and Medicaid Services (CMS) removed an incentive for physicians to prescribe more expensive Medicare Part B originator drugs in a move to encourage preferential biosimilar prescribing. They also opened the door to formulary exclusions of originator drugs under Medicare Part D, which is required to offer at least two distinct drugs in each class.27
  • One point of contention is that, although US payers will undoubtedly benefit from the introduction of biosimilars, it remains unclear to what extent patients will reap the benefits of the savings.

Despite the long wait for the 351(k) pathway to be successfully put into practice, the US biotechnology industry has been highly active in this field for many years and brand-name biologic manufacturers themselves are pursuing biosimilars. Now that the first biosimilars have received FDA approval and are coming to market, biosimilar development programs in the US have gained new momentum. 

Additional resources   +

  • Additional educational resources and information on biosimilars for healthcare providers are available at the Academy of Managed Care Pharmacy’s Biosimilars Resource Center website, which can be accessed here:

References   +

  1. Reuters, 20 November 2014. Drug spending tops $1 trillion on hepatitis C, cancer therapies: study. Accessed 27 February 2015.
  2. Medscape, 19 November 2014. Why are drug costs so high in the United States? Accessed 27 February 2015.
  3. Kantarjian HM, Fojo T, Mathisen M & Zwelling LA. Cancer drugs in the United States: Justum pretium – the just price. J Clin Oncol (2013) 31:3600–3604.
  4. Experts in Chronic Myeloid Leukemia. The price of drugs for chronic myeloid leukemia (CML) is a reflection of the unsustainable prices of cancer drugs: from the perspective of a large group of CML experts. Blood (2013) 121:4439–4442.
  5. ABC News, 18 December 2013. Outrage at the increasingly high cost of cancer drugs. Accessed 27 February 2015.
  6. Optum, 14 November 2014. Rheumatoid arthritis cost drivers. Accessed 27 February 2015.
  7. Decision Resources, 20 August 2014. Payers exert cost controls on high-cost biologics to treat autoimmune conditions. Accessed 27 February 2015.
  8. Cornes P. The economic pressures for biosimilar drug use in cancer medicine. Targ Oncol (2012) 7(Suppl 1):S57–S67.
  9. The Economist, 4 January 2014. Hard pills to swallow. Drug firms have new medicines and patients are desperate for them. But the arguments over cost are growing. Accessed 27 February 2015.
  10. The Economist, 26 May 2011. The costly war on cancer. New cancer drugs are technically impressive. But must they cost so much? Accessed 27 February 2015.
  11. Weeks JC, Catalano PJ, Cronin A et al. Patients' expectations about effects of chemotherapy for advanced cancer. N Engl J Med (2012) 367:1616–1625.
  12. CBS News, 29 June 2011. 20 expensive drugs that could bankrupt Medicare. Accessed 27 February 2015.
  13. Wall Street Journal Pharmalot blog, 8 January 2015. What the FDA panel vote on a biosimilar says about approvals. Accessed 27 February 2015.
  14. Health Law and Policy Matters, 28 July 2015. Emerging state biosimilar laws – reference chart and five issues to watch. Accessed 2 November 2015.
  15. US Department of Health and Human Services, Food and Drug Administration (FDA). Nonproprietary naming of biological products. Guidance for industry. August 2015. Accessed 10 December 2015.
  16. Pharmaceutical Manufacturing, 28 August 2015. FDA issues biosimilar naming guidance. Accessed 10 December 2015.
  17. Reuters, 21 July 2015. Drugmaker Novartis blocked from selling Neupogen copycat until Sept 2. Accessed 2 November 2015.
  18. FDA Law Blog, 21 July 2015. BPCIA federal circuit follies, or can we all agree to disagree? A divided federal circuit finds the patent dance voluntary, but rules that notice of commercial marketing can occur only after licensure. Accessed 2 November 2015.
  19. GEN News, 24 July 2017. Merck, Samsung Bioepis launch Remicade biosimilar in US. Accessed 31 August 2017.
  20. BloombergGadfly, 24 July 2017. Merck, Samsung accelerate a biosimilar price war. Accessed 31 August 2017.
  21. Medscape, 14 July 2015. ASCO updates practice guidelines for CSFs in cancer patients. Accessed 2 November 2015. [Subscribe for free]
  22. The Wall Street Journal, 2 August 2016. The CVS drops coverage of 2 branded biotech drugs in favor of copies. Accessed 12 September 2016. [Subscription required]
  23. Generic Pharmaceutical Association. New study finds generic prescription drugs saved consumers and the U.S. health care system $1 trillion over past decade. Accessed 27 February 2015.
  24. Rand, 3 November 2014. Biosimilar medications could create billions in health care savings. Accessed 27 February 2015.
  25. Express Scripts, 23 April 2013. The $250 billion potential of biosimilars.$250-billion-potential-of-biosimilars. Accessed 27 February 2015.
  26. Managed Care, 6 December 2016. Drug spending in the US will grow at annual rate of 6% to 9% in next 5 years, report predicts. Accessed 30 March 2017.
  27. The National Law Review, 7 April 2015. CMS releases new reimbursement guidance for biosimilars. Accessed 2 November 2015.