biosimilars pricing

What are the pricing considerations when launching different types of biosimilars?



Biosimilars are biological medicines that are highly similar to another biologic already licensed for use. They can offer significant cost savings to patients and health care systems; however, their pricing dynamics are complex and multifactorial. Unlike small molecule drugs, biologics are derived from living organisms and have complex structures which cannot be exactly replicated. Therefore biosimilars require a more lengthy and costly development and regulatory approval process than standard generic drugs, resulting in higher-priced products. Factors including local pricing policies, the type of biosimilar, its indication and the channel of drug procurement and distribution can all affect achievable price. Being ‘similar’ as opposed to being an identical generic copy, can also have implications for the uptake of biosimilars. In this article we review the impact of biosimilars in the retail, oncology and orphan drugs markets.

Retail biosimilars

Autoimmune inflammatory disorders such as rheumatoid arthritis are widely treated with TNF inhibitors, a class of retail biologics. Those chronic conditions are prevalent in society and induce the need for lifelong, costly treatment for a large patient population. It generates considerable interest in biosimilars in these disease areas, as their introduction can lead to large savings and enable the treatment of more patients.

To drive biosimilar uptake, payers may introduce incentives to physicians and other stakeholders. In Germany, for example, biosimilar uptake is driven by setting HCP prescription quotas[i] while NHS in the UK proactively laid out a special framework for the adoption of adalimumab biosimilars.[ii] Countries like France allow an automatic substitution, where dispensing the biosimilar instead of the originator is possible at the pharmacy level without consulting the prescriber.[iii]

The high payer focus and large patient populations pose good commercialization opportunities to biosimilar manufacturers. In 2022, anti-TNF biosimilars covered 60% of the European market share.[iv] However, payers expect steep discounts on biosimilars of this type. In the countries where the minimal mandatory price discount for biosimilars is established, the discount for retail drugs tends to be higher than for hospital drugs, e.g., in France it is respectively 40% and 30%. Price is also driven by competition between biosimilars and originators, leading to substantial price erosion as it had place with AbbVie’s blockbuster Humira (adalimumab). After Humira’s patent expiration in 2018, biosimilars rapidly started taking over the market. In the UK ~63% patients had been switched over to biosimilars after only 6 months[v] while in Norway, where tenders have a winner-takes-all policy, adalimumab biosimilars have achieved 100% market share at a price discount of 85%.[vi] Multiple other countries recorded discounts of 50%-70% initial price.[vii] AbbVie, in order to retain some shares in other markets, dropped the price of Humira by up to 80%.[viii]

Oncology biosimilars

Between 2007 and 2020, 33 biosimilars for oncology were approved by the European Medicines Agency (EMA) and reached European markets with discounts to originators ranging from 10% to 25%.[ix] Procurement of hospital drugs, including cancer biologics, is generally conducted by means of tenders and sometimes supported by unofficial IRP (International Reference Pricing) or mandatory discount vs originator list price. Although the tendering decisions are driven largely by potential savings, the crucial stakeholders in this area are clinicians, whose opinion is often incorporated in the tender process. Prescribers are less likely to incorporate changes to high-risk curative treatment if it is not introducing any clinical added benefit. Manufacturers of copycat drugs may differentiate their product from the originator by changing the formulation or delivery to be perceived as delivering more value than the original molecule e.g. subcutaneous trastuzumab as an alternative to intravenous in breast cancer treatment. Communication of the value of biosimilars with specialist KOLs, physicians, and patients is essential to ensure higher patient uptake. Other incentives provided by companies, such as research grants, patient support programs and other types of informal support, may also influence prescribers.

Orphan biosimilars

The costs of the development of orphan biosimilars are estimated to be in a range of $40-50 million. Only 12% of the 42 currently designated biologic orphan drugs are likely to have a commercial market size across Europe in excess of €100 million per year.[x] Achieving economic return in this scenario can be challenging for biosimilars which face 20-30% discounts compared to originators as well as small and dispersed patient populations. Moreover, among patients and clinicians, loyalty to originator companies is particularly strong for orphan drugs. The long innovation cycles and patent protection period for orphan drugs create more time for originator companies to develop strong connections with KOLs and innovate their product before biosimilars hit the market as it had place with AstraZeneca’s blockbuster orphan drug, drug Soliris (eculizumab). Its biosimilars are planned to launch in Europe in 2025.  AZ has already launched a newer product, Ultomiris, which offers an improved dosing regimen, a convenience that may drive potential patients away from older generation biosimilars.  


In the eyes of payers, significant cost savings for patients and healthcare systems is the key differentiator of biosimilars. They are expected to give significant discounts, particularly in the retail sector where price erosion can reach 85%. Whilst discount levels for oncology and orphan drugs are often lower, the introduction of biosimilars in those indications is particularly challenging due to the prescribers’ familiarity with the originator and longer patent protections. The pricing dynamics are further influenced by local policies and the competitor landscape. Biosimilar manufacturers must fully understand the dynamics of the market they are entering into when deciding on a pricing strategy.

[i] GENERICS AND BIOSIMILARS INITIATIVE.  Quotas improve biosimilar use in Germany Accessed 20/09/22

[ii] NHS. Biosimilar medicines. Accessed 20/09/22

[iii] GENERICS AND BIOSIMILARS INITIATIVE. France to allow biosimilars substitution Accessed 20/09/22

[iv] Health EC. The Impact of Biosimilar Competition in Europe. White Paper 2020. Accessed 20/09/22

[v] NHS. NHS England and NHS Improvement Regional Medicines Optimisation Committee Briefing Best Value Biologicals: Adalimumab Update 6.; 2019. Accessed 20/09/22

[vi] IQVIA.  One Hundred Days of Humira Biosimilars. Accessed 20/09/22

[vii] Coghlan J, He H, Schwendeman AS. Overview of Humira® Biosimilars: Current European Landscape and Future Implications. J Pharm Sci. 2021 Apr;110(4):1572-1582. doi: 10.1016/j.xphs.2021.02.003.

[viii] Fiercepharma. AbbVie offers up 80% Humira discount in EU tender market to hold off biosimilars: report. Accessed 20/09/22

[ix] Bennett C, Schoen M, Hoque S et al. Improving oncology biosimilar launches in the EU, the USA, and Japan: an updated Policy Review from the Southern Network on Adverse Reactions. The Lancet Oncology. 2020;21(12):e575-e588. doi:10.1016/s1470-2045(20)30485-x

[x] IQVIA. The Prospects for Biosimilars of Orphan Drugs in Europe. Accessed 20/09/22

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