Inside a buckling
affordable medicines market
Generics and biosimilars keep treatment within reach for millions of Americans and save the U.S. trillions. But an unsustainable market and supply chain are driving generic prices down too quickly and limiting biosimilar development. Can the system that made medicines affordable stay afloat?
The extent of affordable medicine savings
Generics and biosimilars have saved the U.S. $3.4 trillion over the past decade — putting money back into the health care system, creating lower out-of-pocket costs, expanding care, bettering medicine adherence and increasing treatment flexibility.
90%
3.3 billion
$56.2 billion
Average out-of-pocket cost for generics vs. brand-name drugs.
Share of all U.S. prescriptions filled with generics.
Total saved since biosimilars launched in 2015.
Number of days of biosimilar therapy delivered since 2015 — 460 million more than would have been possible without them.
In other words: Access to generics and biosimilars drives affordability and equity across the health care system.
The cracks in a strained system
What's holding the system back?
Regulatory constraints, patent schemes, PBMs and middlemen, reimbursement issues, and the biosimilar void.
These come together to create unsustainable conditions for manufacturers to keep making these drugs — putting patient access at risk.
How can we break down regulatory constraints?
How do patent schemes block drug competition?
How are reimbursement rates re-affirming the issue?
How does the biosimilar void come into the picture?
How are middlemen complicating this?
These cracks, and the affordability crisis facing generics and biosimilars, stem from a system rewarding large pharmaceutical companies and discouraging competition.
The result: Soaring brand profits, collapsing generic prices and a backbone of savings that delivered
$3.4 trillion in the last decade is now at risk of breaking.
Where do we go from here?
In order to preserve access to affordable medicines and the savings they deliver, policymakers must:
Cut unnecessary studies, allow global data comparators, improve transparency around ingredients, and develop rules that make it easier to bring lower-cost drugs to market.
Restrict brand-name drugmakers from using patents to block competition by capping the number of patents that can be asserted in litigation and protecting procompetitive patent settlements.
Require transparency and end profit structures that tie PBM fees to drug list prices.
ENCOURAGE STATE ACTION
Empower states to curb PBM practices that raise costs and limit access by prioritizing lower-cost generics and biosimilars on formularies.
ADDRESS HARMFUL FEDERAL POLICIES
Eliminate unfair Medicaid penalties on generics and ensure IRA price controls don’t deter new generics and biosimilars from the market.
The Takeaway
Savings from generics and biosimilars depend on addressing the systemic threats holding them back. Without targeted policy fixes, the U.S. risks losing its most effective safeguard against rising drug costs.
STREAMLINE FDA APPROVALS
CURB PATENT ABUSE
REFORM PBM + MEDICARE POLICIES
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A message from
Who’s at blame?
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How can we break down regulatory constraints?
Streamlining biosimilar approval by eliminating unnecessary clinical trials and deeming biosimilars interchangeable upon approval.
$28.69
$6.95 vs.
How do patent schemes block drug competition?
Brand-name drugmakers stack new patents onto existing ones. These “patent thickets” delay or block generic and biosimilar competition by extending patent life and making it more difficult for competitors to enter the market.
How are middlemen complicating this?
PBMs favor higher list price drugs with larger rebates, while Medicaid’s rebate structure penalizes generics that do not take a price increase. Plus’s price controls introduce uncertainty that discourages investment in new affordable medicines.
How are reimbursement rates re-affirming the issue?
Generic reimbursement rates are set so low that some manufacturers leave the market, contributing to shortages and consolidation.
How does the biosimilar void come into the picture?
Over the next decade, 118 biologics will lose exclusivity, but only 12 biosimilars are currently in the pipeline — this creates a biosimilar void that signals a decline in future biosimilar availability.
What's holding the system back?
Regulatory constraints, patent schemes, PBMs and middlemen, reimbursement issues, and the biosimilar void.
These come together to create unsustainable conditions for manufacturers to keep making these drugs — putting patient access at risk.
The cracks in a
strained system
