What is a Biosimilar? Benefits, Costs & Employer Employer Savings Explained

What are biosimilars, and why are they gaining attention across the healthcare industry? As more biosimilars become available, including alternatives to widely used therapies like Humira—there is growing interest in how they work, how they are approved, and what they mean for patients and employers.

What is a Biosimilar Product?

Biosimilars are FDA-approved biological products that are highly similar to an existing “reference” biologic drug, with no clinically meaningful differences in safety, potency, or purity. Before approval, biosimilars undergo rigorous evaluation to ensure they deliver the same clinical outcomes as the original product.

Biological vs Biosimilar

Biologic drugs are complex medications made from living cells, such as plant or animal cells, and are often used to treat serious or chronic conditions. These original therapies are known as “reference products,” as defined by the Food and Drug Administration (FDA).

Biosimilars, on the other hand, are highly similar versions of these biologic drugs. While they are not exact copies due to the complexity of biologics, biosimilars are FDA-approved to have no clinically meaningful differences in safety, effectiveness, or quality compared to the reference product.

Biosimilar vs Generic: What's the Difference?

Biosimilar products are different from generic drugs, although they are both versions of brand name drugs. Biosimilars are biological products that, clinically, have similar effects as the brand product but the molecules vary slightly. Generic products are the same active ingredient as the brand-name drug. Therefore, biosimilars are not considered generic drugs by the FDA since they are not the exact same molecule. For both generic and biosimilar products, they must show similar safety and effectiveness.

Are Biosimilars Safe?

Biosimilars also have no clinically meaningful differences from the reference product. This means you can expect the same safety and effectiveness from the biosimilar over the course of treatment as you would the reference product. Biosimilars are made from the same types of sources (e.g. living cells or microorganisms) and are just as safe and effective as their reference products.

Are Biosimilars Interchangeable?

Not all biosimilars are interchangeable with the reference product. In order for the FDA to consider a biosimilar interchangeable with the reference product, additional requirements must be met to show they are the same, clinically, in any given patient for the same indications. Interchangeable biosimilars can be substituted at the pharmacy for the brand product, while non-interchangeable biosimilars require a new prescription from the prescriber.

Humira Biosimilars: A Real-World Example

One of the most well-known examples of biosimilars in action is Humira, a widely used biologic medication prescribed to treat conditions like rheumatoid arthritis and Crohn’s disease. As one of the highest-cost drugs in the U.S., Humira has historically driven significant specialty pharmacy spend for employers and health plans. With the introduction of Humira biosimilars, employers now have access to clinically equivalent treatment options at a lower cost. This increased competition helps reduce overall drug spend while maintaining the same standard of care for patients.

How Can Biosimilar Products Help Members and Employer Groups?

For members, biosimilars offer more options but the members may need a new prescription from their doctor when they switch to a biosimilar product. For employer groups, having competition in the market between biosimilars and the reference products creates a more competitive pricing dynamic for biosimilars. At SmithRx, we leverage this to source biosimilar products at the lowest net cost and pass on 100% of the savings to the employer group. Contact us today to learn how to save on prescription costs.

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References

Biosimilars

Biological Product Definitions

Biosimilar Basics for Patients