90% of blockbuster drugs lack biosimilar competitors—why pricing kills the pipeline

The biosimilar pipeline is nearly empty despite regulatory progress

A 2025 IQVIA Institute analysis found that 90% of biologic drugs facing patent expiration over the next decade have no biosimilar competitor in development (company-reported). This gap persists even as the regulatory landscape has shifted to enable faster approvals. In October 2024, the FDA published its first international guideline on biosimilar development, reducing reliance on comparative clinical efficacy studies and harmonizing global standards with Brazil's ANVISA, the EMA, and regulators in Korea and the UK.

Gillian Woollett, VP and Head of Regulatory Strategy at Samsung Bioepis, attributes the void not to regulatory barriers but to economics. Biosimilars cost approximately 100 times more to develop than generic small-molecule drugs, yet the commercial reimbursement model treats them like generics. In the US, branded manufacturers capture roughly 50% of list price, while biosimilar producers take home less than 10% (company-reported). This math does not sustain investment at the scale required.

Pricing misalignment will hollow out the sector

The regulatory machinery is working. Harmonized guidelines, reduced clinical trial burden, and proof that biosimilars can match any biologic all exist. What is missing is a commercial environment that rewards biosimilar adoption and reflects the actual cost of development.

Woollett points to two structural failures. First, patients and payers see no direct benefit when a biosimilar is chosen over a branded drug because intermediaries (pharmacy benefit managers, group purchasing organizations) capture the savings rather than passing them to the patient or insurer. Second, formulary committees often prefer the most expensive drug because rebates and kickbacks flow to health systems, not to the patient or to the manufacturer of the cheaper alternative.

Without reformation, the 90% gap will widen. Feasibility no longer constrains biosimilar development. Viability does. US price controls introduced by the Inflation Reduction Act and Trump's Most Favored Nation policy create additional pressure: when government caps the price of branded drugs, there is no cost differential to justify biosimilar development. This drives supply chain concentration rather than diversification.

Emerging markets in South America (led by Brazil), Asia (Korea, India, China), and select European jurisdictions are making progress on locally manufactured biosimilars, but these regions face their own hurdles around manufacturing standards and regulatory harmonization.

Pricing transparency and formulary reform are the levers

Woollett calls for three near-term shifts. Greater transparency around what intermediaries extract from the drug supply chain would expose the revenue leak. Clearer regulatory signals about what constitutes a viable biosimilar margin would reduce investment uncertainty. And formulary committees must be redesigned to reward lower-cost alternatives rather than highest-rebate ones.

Pending legislation offers some opportunity. The proposed Red Tape Elimination Act would make all biosimilars automatically interchangeable upon FDA approval, removing one adoption barrier. The Biologics Price Competition and Innovation Act (BPCIA) of 2009 includes a year-long market exclusivity window for the first interchangeable biosimilar, delaying competition for all subsequent entrants—a flaw Woollett highlights as needing correction.

The biosimilar user fee legislation currently under negotiation will fund a significant share of FDA activities. Passage is described as a must-have for the agency's capacity to review biosimilar applications. Regulatory staffing and speed will not resolve the pricing problem, but they are table stakes for any volume to materialize.