Biosimilars Cut Cancer Drug Costs by Nearly $4,000 a Month for Insurers, UCLA Study Shows

Biologic drugs have transformed the treatment of cancers ranging from breast cancer to lymphoma, but their extraordinary price tags have long been a source of financial strain for patients and the health system alike. A new study led by researchers at the UCLA Health Jonsson Comprehensive Cancer Center and published in JAMA Oncology offers some of the clearest real-world evidence yet that lower-cost biosimilars are beginning to change that equation. Analyzing insurance claims from more than 14,000 patient-drug pairs, the researchers found that patients with cancer who exclusively used biosimilars generated average monthly costs that were $3,820 lower for insurers and $39.50 lower out of pocket compared with patients who received only the original branded biologic medicines. The findings arrive at a moment when the U.S. Food and Drug Administration has been actively working to accelerate biosimilar competition, and they suggest that the policy framework built to foster that competition is finally delivering measurable savings in oncology.

To understand why the study matters, it helps to understand what biosimilars are and how they differ from the generic drugs most consumers know. Conventional small-molecule medications can be copied exactly, and their generics must demonstrate bioequivalence through relatively straightforward testing. Biologic drugs, by contrast, are large, complex molecules manufactured inside living cells, which makes them inherently variable and impossible to replicate precisely. Biosimilars are therefore defined as products that are highly similar to an originator biologic, with no clinically meaningful differences in safety, purity or potency. A federal policy enacted in 2009 established an abbreviated regulatory pathway designed to bring these products to the U.S. market, with the explicit goals of increasing competition, lowering prices and improving access to biologic treatments. By the end of 2024, thirteen biosimilars had been approved for three of the most widely used cancer biologics: bevacizumab, rituximab and trastuzumab, drugs deployed against breast cancer, lymphoma, colorectal cancer, lung cancer and ovarian cancer.

The financial stakes in oncology could hardly be higher. Previous research has estimated that financial toxicity, the measurable hardship caused by the cost of care, may affect as many as half of all patients with cancer in the United States. That hardship is not merely a matter of household budgets; it has been linked to medication nonadherence and poorer health outcomes, meaning that high drug prices can directly undermine the effectiveness of treatment. Biologic drugs are a major contributor to this burden because of their complexity and cost. While earlier studies had shown that biosimilar competition in other therapeutic areas can drive down prices and shift prescribing toward cheaper alternatives, far less was known about what happened across these three major cancer drugs after biosimilar entry, and crucially, whether any market changes actually translated into lower costs for insurers and patients in everyday cancer care.

To close that gap, the UCLA team conducted a retrospective cohort study built on health insurance claims data. They identified 14,655 patient-drug pairs involving people with cancer who initiated treatment with bevacizumab, rituximab or trastuzumab between 2020 and 2023, a period that spans the market entry of biosimilars for all three drugs. The cohort included patients with commercial insurance as well as those with Medicare-related coverage, and the researchers tracked each patient’s treatment and costs for twelve months after the start of biologic therapy. Patients were sorted into four groups: those who exclusively used a biosimilar, those who exclusively used the originator product, those who switched from the originator to a biosimilar, and those who switched from a biosimilar back to the originator. Monthly insurer payments and patient out-of-pocket costs, calculated as the sum of deductibles, copayments and coinsurance, were compared across the groups after adjusting for differences in patient characteristics and treatment patterns.

The adoption patterns the researchers observed were striking. Among the patient-drug pairs, 59.4 percent of patients exclusively used a biosimilar during the first twelve months of treatment, while 32.5 percent exclusively used the originator. Only 6.9 percent switched from the originator to a biosimilar, and a mere 1.2 percent moved in the opposite direction. In other words, biosimilars captured the market primarily at the point of treatment initiation rather than through conversion of patients who were already mid-course on the branded drugs. That distinction carries practical weight: it suggests that the moment a clinician and patient choose which biologic to start may be the single most important leverage point for expanding the use of lower-cost alternatives, since switching established patients appears to be relatively rare.

The cost differences between the groups were substantial. After adjustment, average monthly payer costs were $8,959 for patients who exclusively used biosimilars, compared with $12,779 for those who exclusively used the originator, a gap of $3,820 every month of treatment. Out-of-pocket savings were smaller in absolute terms but still meaningful: patients on biosimilars paid an average of $118.90 per month versus $158.40 for those on originators, a difference of $39.50 per month. Senior author Tina Shih, director of the Cancer Health Economics Research Program at the UCLA Health Jonsson Comprehensive Cancer Center and professor of Health Economics in the Department of Radiation Oncology, acknowledged the asymmetry but emphasized its human significance. Although the savings were substantially greater for insurers than for patients, she noted, even modest reductions in out-of-pocket costs may be meaningful for people facing the financial challenges of cancer care, since those savings can be directed toward other treatment-related expenses or everyday living costs.

Beyond the patient-level comparisons, the study documented clear market-wide effects of biosimilar entry. The average sales price of the three originator biologics declined by 3.8 percent per year after biosimilars entered the market, evidence that competition pressured the branded products themselves rather than simply carving off a slice of demand. Meanwhile, the originators’ market share fell by roughly 30 percent annually among patients with commercial insurance and 31.5 percent within Medicare Part B. The biosimilars themselves were also becoming cheaper over time: the average sales price of the twelve biosimilar products included in the study declined by 12.4 percent per year, a pattern consistent with intensifying price competition among multiple manufacturers of similar products. Together, these trends indicate that the biosimilar pathway is functioning as intended, reshaping prices across the entire category rather than at the margins.

First author Xiaoyu Liu, a former PhD student in the Department of Health Policy and Management at the UCLA Fielding School of Public Health, framed the findings as timely support for ongoing regulatory efforts. The FDA has continued to take regulatory actions aimed at further unlocking biosimilar competition, Liu said, and the study’s results offer further evidence to support patients, providers and insurers in their consideration of biosimilars. The research team also included Xiaoyi Xu and Z. JohnLu of UCLA. Because the analysis relied on insurance claims rather than clinical records, it speaks primarily to utilization and cost rather than to treatment outcomes, but the regulatory standard for biosimilars, no clinically meaningful differences from the originator, underpins the assumption that the cheaper products deliver equivalent care. The study’s retrospective design also means the associations reflect real-world prescribing behavior rather than a controlled experiment, which is precisely what makes them valuable for policy discussions.

Taken together, the findings sketch a healthcare market in transition. Biosimilars now account for the majority of new treatment starts across three of oncology’s most important biologics, their prices are falling year over year, and their presence is pulling down the prices of the branded originals as well. For the health system, the monthly savings of nearly $4,000 per patient on payer costs represent the kind of aggregate figure that could reshape oncology budgets if adoption continues to climb. For individual patients, the roughly $40 in monthly out-of-pocket relief is modest against the backdrop of cancer’s total financial toll, yet it arrives at a time when financial toxicity affects up to half of American cancer patients and contributes to treatment abandonment and worse outcomes. The study also highlights a practical prescription: because biosimilar uptake happens overwhelmingly at treatment initiation, clinicians, insurers and policymakers who want to widen access to these equally efficacious, lower-cost alternatives should focus their efforts on the first prescription, where the choice between originator and biosimilar is actually made.

Subject of Research: Economic impact of biosimilar competition on cancer biologic drug costs for insurers and patients

Article Title: Cancer biosimilars associated with lower costs for insurers and patients, UCLA study finds

Article References: Cancer biosimilars associated with lower costs for insurers and patients, UCLA study finds. (n.d.). Original publication

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Keywords: biosimilars, cancer biologics, bevacizumab, rituximab, trastuzumab, drug pricing, financial toxicity, JAMA Oncology, UCLA, health economics, Medicare Part B, FDA regulation