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Forty percent of spiraling US drug costs are based on a mere two percent of all drugs –biologic drugs (biologics) made from living cells that are administered by injection or infusion. These costs will continue to balloon as new biologics are approved; the recently approved Alzheimer’s drug is expected to result in a 50% increase in Medicare spending and cost individuals 40% of their annual income. These drugs are expensive because they cannot be mass-produced, and their cost places important treatments for conditions such as arthritis (Humira) and cancer (Herceptin) out of reach for many Americans. Fortunately, just as there are generic versions of brand name pills, there are lower cost biosimilars of original biologics allowed by an expedited regulatory approval process that lowers the costs of obtaining regulatory approval. However, US adoption of biosimilars is minimal, in stark contrast to widespread use of generic drugs, and despite a decade of safe biosimilar use in other countries.

This Article provides the first comprehensive explanation of how US laws, industry actions, and cognitive biases work together to impede US biosimilar use. This Article argues that doctors and patients currently have unfounded misperceptions concerning the safety and efficacy of biosimilars based on misinformation propagated by companies that builds upon an existing cognitive bias against cheaper drugs. Not only does this keep drug costs high, but it also creates worse health outcomes for patients since studies show unfounded misperceptions have negative physical manifestations. Although there is a similar misperception against generic drugs, structural differences in terms of regulatory laws and insurance coverage exacerbate biases against biosimilars. For example, US regulatory laws have created an additional regulatory designation for biosimilars to be substituted without doctor intervention; this is contrary to the process for generics where there is no additional federal designation required for substitution.

After revealing the existence and extent of bias against biosimilars, this Article proposes solutions to effectively promote biosimilar use. It suggests a multi-pronged approach to encourage biosimilar use that includes legal changes to support biosimilar substitution, education to specifically tackle biases, and financial incentives to encourage biosimilar use. These proposals are especially timely since the FDA just approved the first biosimilar that can be substituted for the comparable brand at pharmacies, more than a decade after the biosimilar pathway was created, suggesting that the time is ripe to address systemic issues. Moreover, addressing these barriers to biosimilar use would not only expand access to treatment, but also save the US an estimated $50 billion in the next decade.