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Competition in the U.S. Therapeutic Biologics Market

Publication Date

Spending on biologics—large, complex molecules made from a living source—has been increasing over time and now represents nearly half of all U.S. prescription drug spending. Biosimilar competition for biologics is limited. Only 19% of biologics without patent protection have a marketed biosimilar—a highly similar version of the original biologic that is manufactured by a different entity than the one who produces the original biologic. Even when competition exists, biosimilar prices are modestly lower than those of the original biologic (25% less at most), and after a year, less than 40% of sales have shifted away from the original biologic. Just over half of biologics with competition have an unbranded version available–either as unbranded biologics or unbranded biosimilars. While these unbranded versions are identical to the branded versions (be it a biologic or a biosimilar) except for having a lower price, they are sold by the same manufacturer as the branded versions for purposes of market share retention and negotiating position with pharmacy benefit managers. Therefore, they should not necessarily be included in measurements of competition in these markets.

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