The wave of patent expiration has hit a R&D standstill, and an “empty window” for biosimilar drugs is approaching! The US healthcare system may have saved less than $189 billion

The Zhitong Finance App learned that a recent industry report shows that within the next ten years, 90% of original biopharmaceuticals will lose their monopoly on the market, and currently no corresponding generic drugs (biosimilar) have entered the R&D pipeline. As a result, the US faces a huge “biosimilar empty window,” which could cause $189 billion of health-care cost savings to be lost.

The “Association for Accessible Medicines (AAM)” (Association for Accessible Medicines (AAM)), a lobbying organization representing generic drug manufacturers, said in a report last week that out of 118 biological products whose patents expire between 2025 and 2034, only 10% will face biosimilar market competition.

When this review, entitled “2026 US Generic Drugs and Biosimilar Medicine Savings Report,” was published, drug welfare agencies, drug manufacturers, and health insurance companies were still pushing back on each other, and all parties blamed each other for the continued rise in US drug prices.

A biosimilar is a low-cost generic version of a group of complex molecules known as biologics. These biologics are mostly used to treat diseases such as cancer, and their share of US medical expenses continues to rise, including major drugs such as ABBV.US (ABBV.US)'s Humira (Humira) and Johnson & Johnson (JNJ.US)'s Stelara (Stelara).

AAM stated in the report: “After biosimilars enter the market, their success or failure is often determined not by clinical value or lower prices, but by opaque contract mechanisms, rebate-oriented incentive rules, and a medical insurance drug catalogue that favors high-priced original research drugs.”

The organization added: “This market environment will weaken competition, limit patients' access to low-cost treatment plans, and discourage capital's willingness to invest in subsequent biosimilar research and development.” According to AAM statistics, generic drugs and biosimilar drugs saved the US total of 496 billion US dollars in medical expenses last year, an increase of 30 billion US dollars over 2024; of these, generic drugs contributed 95% of the savings.

AAM said that biosimilar research and development mainly targets biopharmaceuticals with high market potential and whose patents are about to expire. For those original research drugs with sales exceeding 1 billion US dollars in the year before the patent expires, competition for corresponding biosimilar drugs is particularly intense.

AAM also mentioned that original drug research companies used high rebates to win over drug welfare management agencies, prompting the latter to prioritize the use of high-priced original research drugs, taking advantage of the existing system. Alex Keeton (Alex Keeton), Executive Director of AAM's Biosimilar Division, said, “The current payment and reimbursement system essentially favors high-priced original research drugs.”

The US biosimilar industry is also mired in numerous patent disputes. The number of patents claimed in US courts is more than ten times that of countries such as Britain and Canada.

The “American Pharmaceutical Research and Manufacturers Association” (PhRMA), a lobbying organization representing pharmaceutical companies, blamed the empty biosimilar window on drug welfare agencies and defended the US intellectual property system, saying that the system provided years of market monopoly for life-saving drugs.

A PhRMA spokesperson said, “If policymakers want to reduce costs and accelerate competition, they should focus on the consortium of insurers and drug benefit administrators rather than the intellectual property system that has brought in more than 900 new drugs since 2000.”

The “Pharmaceutical Care Management Association” (Pharmaceutical Care Management Association), an industry organization for drug benefit managers, stated that “misuse of the patent system often prevents biosimilar drugs from entering the market,” adding that drug welfare agencies are planning to ensure that biosimilars become the primary choice for patients.