The Response of Biologic Prices to Biosimilar Entry: Case Studies of Genotropin and Humira

Abstract

Biologics are a class of drugs with complex molecules that generally come from living organisms (ex: bacteria, yeast, animal cells), which is what makes them very difficult and expensive to obtain (https://www.fda.gov/drugs/biosimilars/overview-health-care-professionals). According to the IQVIA Institute for Human Data Science’s The Use of Medicines in the U.S. 2024 report, biologics only made up 5% of prescribed drugs in the US, yet contributed to more than 50% of the country's total prescription drug spending (Aitken et al., 2024). To avoid these extreme costs, patients may instead opt for a biosimilar, a kind of biologic drug that is highly similar to an existing biologic. These biosimilars can only be developed and sold after the patent for the original biologic expires, and are on average 60% cheaper than their original biologic (https://www.who.int/news/item/13-02-2025-biosimilars--expanding-access-to-essential-biologic-therapies). Crucially, substituting biologics for cheaper biosimilars helps those in need gain access to important medicines. Within the next decade, 118 biosimilars are expected to lose their patent protections, allowing hundreds of new biosimilar medicines to enter pharmaceutical markets (Aitken et al., 2025). It is currently vital to fully understand how they impact biologic prices.
This paper hopes to identify the real effect of patent protection loss on biologic markets. Biosimilar introduction is expected to drive down biologic prices since when competition is introduced, manufacturers should lower prices in order to remain relevant in their markets. Therefore, the hypothesis is that biosimilar entry drives biologic prices down. In reality, however, executive decision making is influenced by factors such as market monopolies and individual ideals, rendering theoretical predictions imprecise. This paper examines the real-world impact through the case studies of Genotropin and Humira, two widely used biologics, as biosimilars entered their respective markets. The prices of the biologics were observed over time, considering an intervention point of biosimilar entry. Determining prices is beneficial for understanding markets, as it reflects the market equilibrium (Banton, 2025). Price trends were examined using Medicaid’s State Drug Utilization Data, and the National Average Drug Acquisition Cost, respectively. This allowed for reliable comparison over time, an approach made necessary by the limited availability of continuous pricing data for most biologic drugs across both databases.