Biosimilar drugs are often confused with generic drugs. Both are marketed as cheaper versions of costly name-brand drugs and are designed to have the same clinical effect as their pricier counterparts. But biosimilar drugs and generic drugs are very different.

Biosimilar drugs are often confused with generic drugs. Both are marketed as cheaper versions of costly name-brand drugs. Both are available when drug companies’ exclusive patents on expensive new drugs expire. And both are designed to have the same clinical effect as their pricier counterparts. But biosimilar drugs and generic drugs are very different, mainly because while generic drugs are identical to the original in chemical composition, biosimilar drugs are “highly similar,” but close enough in duplication to accomplish the same therapeutic and clinical result. Another key difference is that generics are copies of synthetic drugs, while biosimilars are modeled after drugs that use living organisms as important ingredients. But many experts hope the two will share a critical commonality and that, like generics, biosimilars will dramatically lower the cost of biologic drugs.

“ Branded drugs are either synthetic, meaning they’re made from a chemical process, or biological, meaning they’re made from living sources. Synthetic branded drugs can be exactly replicated into more affordable generic versions, but because biologics involve large, complex molecules, they cannot. That’s where biosimilars come into play,” says Jamie Joy, PharmD, Director of Clinical Pharmacy Programs for Cancer Treatment Centers of America. When drug manufacturers receive U.S. Food and Drug Administration (FDA) approval on a new drug, they obtain a patent ensuring that no other company can create or sell the drug for as long as the patent is in effect, generally 20 years. These exclusive patents allow for a monopoly on the drug, and, generally, an expensive price tag.

The Hatch-Waxman Act, passed in 1984, reduced the cost of synthetic branded drugs by allowing other companies to create generics, or identical but less expensive versions of the original, branded drug, once the patent expires. In 1984, generic drugs accounted for 19 percent of retail prescriptions. In 2016, they accounted for 89 percent, and a March report from the President’s Cancer Panel found that the U.S. generic drug market saved the U.S. health care system an estimated $253 billion overall in 2016, including $10 billion in savings for cancer drugs.

But at the same time as generic drugs have helped offset the high cost of name-brand medications, some newer drugs, such as the immunotherapy and targeted therapy drugs now commonly used to treat cancer, have driven up prescription prices even more. A May report from the IQVIA™ Institute from Human Data Science found that spending on cancer medications in the United States doubled from 2012 to 2017. Many of these newer-to-market drugs are biological drugs, or biologics, which are branded drugs made from living organisms like yeast, bacteria, or animal or plant cells. In 2005, biologics made up 39.1 percent of the $9.5 billion in Medicare drug spending. By 2014, they accounted for 62 percent of the $18.5 billion spent by Medicare on prescription drugs.

Now that the patents on high-priced biologics are beginning to expire, many experts hope that biosimilars, which are comparable but not chemically identical to their name-brand counterparts, may work the same way generics did to help offset drug prices. In 2010, Congress passed the Biologics Price Competition and Innovation Act, which established an abbreviated regulatory process for biosimilars and paved the way for their approval.

For a biosimilar drug to receive FDA approval, it must be highly similar to the original biological drug and contain no clinically meaningful differences, although there may be minor differences in clinically inactive ingredients. According to the National Cancer Institute, the biosimilar also must prove to be “as safe as, work as well as, and work in the same way as” the original drug, and “be used in the same way, at the same dose, and for the same condition.”

Generic drugs are chemically identical to the original branded drug and, as such, cost significantly less because they don’t require much testing. Because biosimilars are made from living organisms, though, and don’t contain identical ingredients to their name-brand counterparts, they still require some testing. So, they cost more than generics, but less than the branded biologic.

In general, generic drugs cost 40 percent to 50 percent less than the brand product, Joy says. Biosimilars, in contrast, are closer to 15 percent to 20 percent cheaper because of the amount the drug manufacturer has to spend on testing. “But because there are potential cost savings to the drug industry as a whole, I think we’ll see a slow-moving shift toward using biosimilars more and more in the future,” she says.

So far, the FDA has approved 12 biosimilars. The first was filgrastim-sndz (Zarxio™), approved in 2015 as a derivative of the branded drug filgrastim (Neupogen®), which is used to prevent infection during chemotherapy. The drug bevacizumab-awwb (Mvasi™), modeled after bevacizumab (Avastin®), was the first biosimilar approved for cancer treatment, in 2017. The next biosimilar coming down the pike, which will be on the market in 2019, is trastuzumab-dkst (Ogivri™), a biosimilar developed from trastuzumab (Herceptin®). Like trastuzumab, the biosimilar will treat certain people with breast or metastatic stomach cancers that contain an excess amount of the HER2 protein.

Understanding the Difference Between Biosimilar and Generic Drugs

In the realm of pharmaceuticals, biosimilar and generic drugs play a crucial role in providing cost-effective treatments. Despite their similarities in purpose, they are fundamentally different. This article delves into these differences, shedding light on their distinct characteristics and impacts.

Biosimilar and generic drugs often come up in discussions about reducing healthcare costs. Both aim to provide affordable alternatives to expensive name-brand drugs. However, their development, approval processes, and chemical compositions set them apart. Understanding these differences is vital for healthcare providers, patients, and policymakers.

What Are Generic Drugs?

Generic drugs are exact chemical replicas of branded synthetic drugs. They contain the same active ingredients and deliver identical clinical effects. Once the patent of a branded drug expires, other manufacturers can produce and sell generics. This leads to significant cost savings.

Characteristics of Generic Drugs

  • Chemical Composition: Identical to branded drugs.
  • Approval Process: Simplified, as they are exact copies.
  • Cost: Generally 40% to 50% less than branded drugs.
  • Development Time: Shorter due to reduced testing requirements.

Generics have revolutionized the pharmaceutical industry by making treatments more accessible. For instance, the Hatch-Waxman Act of 1984 facilitated the proliferation of generics, dramatically reducing drug costs.

What Are Biosimilar Drugs?

Biosimilar drugs, while also intended to reduce costs, are not identical to their branded counterparts. They are modeled after biologic drugs, which are complex and derived from living organisms. Despite not being exact copies, biosimilars are highly similar to their reference products in terms of safety, purity, and potency.

Characteristics of Biosimilar Drugs

  • Biological Source: Derived from living organisms.
  • Approval Process: Rigorous, involving extensive testing to prove similarity.
  • Cost: Typically 15% to 20% cheaper than biologics.
  • Development Time: Longer due to the complexity of biological systems.

Biosimilars aim to provide similar therapeutic benefits as their reference biologics. Their introduction has been pivotal, particularly for complex conditions like cancer.

Key Differences Between Biosimilar and Generic Drugs

Understanding the differences between biosimilar and generic drugs is crucial for informed healthcare decisions. Here are the main distinctions:

Chemical Composition

  • Generics: Exact chemical replicas of synthetic drugs.
  • Biosimilars: Highly similar, but not identical, to biologics.

Development and Approval

  • Generics: Simplified approval process due to identical composition.
  • Biosimilars: Rigorous approval process to ensure similarity and safety.

Cost Implications

  • Generics: Significant cost reduction due to simpler development.
  • Biosimilars: Moderate cost reduction, reflecting the complexity of development.

Source of Derivation

  • Generics: Synthetic chemical processes.
  • Biosimilars: Biological sources like yeast, bacteria, or animal cells.

Impact on Healthcare Costs

Both biosimilar and generic drugs aim to reduce healthcare costs, albeit in different ways. Generics have historically played a significant role in making medications more affordable. For example, in 2016, generics accounted for 89% of retail prescriptions in the US, saving billions in healthcare costs.

Biosimilars, although newer to the market, hold promise in reducing the high costs associated with biologics. As patents on biologic drugs expire, biosimilars are expected to provide substantial savings. For instance, biosimilars have already started to make an impact in oncology, with drugs like bevacizumab-awwb (Mvasi™) providing cheaper alternatives to expensive cancer treatments.

Regulatory Landscape

The regulatory frameworks for biosimilar and generic drugs are distinct, reflecting their differences in complexity and composition.

Generic Drugs

The Hatch-Waxman Act paved the way for generics by establishing an abbreviated approval process. This act has been instrumental in reducing drug costs and increasing accessibility.

Biosimilar Drugs

The Biologics Price Competition and Innovation Act of 2010 created a pathway for the approval of biosimilars. This act mandates rigorous testing to ensure that biosimilars match their reference biologics in efficacy and safety.

Challenges and Opportunities


  • Biosimilars: High development costs and stringent regulatory requirements.
  • Generics: Patent litigation and market competition.


  • Biosimilars: Potential to significantly reduce costs for complex biologic treatments.
  • Generics: Continued cost savings and increased accessibility for patients.

Both biosimilar and generic drugs play essential roles in modern healthcare. While generics provide affordable copies of synthetic drugs, biosimilars offer cost-effective alternatives to complex biologics. Understanding their differences helps in making informed healthcare decisions. As the market for these drugs evolves, we can expect further innovations and cost reductions, benefiting patients worldwide.