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Figure 5. Estimated U.S. Healthcare Savings in 2023: Generics Vs. Biosimilars

While generic drugs often slash prices by 80–90% within
the first few years of market entry, biosimilars typically
reduce costs by only 15–35%. Why the difference?
Generics are chemically identical copies of small-molecule
drugs. Once the primary patent expires, manufacturers can
quickly enter the market with low-cost alternatives. There
are no clinical trial requirements, no complex
manufacturing pipelines, and regulatory approval is
relatively fast and inexpensive.

Biosimilars, on the other hand, are not exact copies—
they’re highly similar versions of complex biologic drugs
made in living systems. That complexity introduces
variability. To gain approval, biosimilars must demonstrate
not only molecular similarity but also clinical equivalence,
which means conducting human trials, often at significant
cost. Manufacturing them involves cell lines, bioreactors,
and tight process controls—raising the development cost to
hundreds of millions of dollars, compared to just a few
million for a generic.

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