Biosimilars are critical to medical innovation

I often say that biosimilars are vital to the R&D ecosystem that develops breakthrough therapies and brings them to market. It's a counterintuitive point and raises a few eyebrows. How can that be, when biosimilars are by definition more accessible versions of therapies that already exist?

Here's how: the lower cost of biosimilars compared to off-patent branded medicines has made them critical to the sustainability of healthcare systems around the world. Reducing the cost burden of widely used existing therapies frees resources to pay for the research, risk and higher pricetag of new therapies coming to market.

This importance of this dynamic has become very clear in the wake of US policies to reduce the differential between the prices Americans pay for drugs and those paid by the rest of the world. There is a logic to this. For decades, US patients have effectively subsidized the R&D that benefits everyone. That appears to be changing.

The tensions from this shift have been perhaps most openly discussed in the UK in recent weeks. While the NHS has been very successful at negotiating discounts on the drugs it buys, pharma companies are now pushing back and reconsidering R&D investments there.

This is a complex problem, and increasing drug prices outside the US to compensate for lower spending there will be disruptive. But as this process develops, biosimilars can help to address the challenge by reducing pressure on budgets for existing medicines. In doing so, biosimilars can continue to serve patients in two ways: directly improving the accessibility of important medications, and enabling healthcare systems to afford the investment required to bring new therapies to market.