Patent cliff collides with R&D gap, biosimilar "void" looms! U.S. healthcare system could miss out on $189 billion in savings.

Title context: Patent cliff collides with R&D gap, biosimilar "void" looms! U.S. healthcare system could miss out on $189 billion in savings. Text: A latest industry report shows that within the next decade, 90% of originator biologics about to lose market exclusivity currently have no corresponding generic (biosimilar) in the R&D pipeline. The United States therefore faces a huge "biosimilar void," which could lead to the loss of $189 billion in potential healthcare cost savings. The Association for Accessible Medicines (AAM), a lobbying group representing generic drugmakers, said in a report last week that of the 118 biologics whose patents will expire between 2025 and 2034, only 10% will face market competition from biosimilars. The release of this review, titled the "2026 U.S. Generic and Biosimilar Medicines Savings Report," comes as pharmacy benefit managers, drugmakers, and health insurers continue to shift blame among themselves over the persistently high cost of medicines in the United States. Biosimilars are lower-cost copies of a group of complex molecules known as biologics, which are mostly used to treat diseases such as cancer and account for a steadily rising share of U.S. healthcare spending, including blockbuster drugs such as AbbVie's (ABBV.US) Humira and Johnson & Johnson's (JNJ.US) Stelara. AAM said in the report: "Once biosimilars enter the market, their success or failure often does not depend on clinical value or lower prices, but is determined by opaque contracting mechanisms, rebate-driven incentive rules, and formulary designs that favor high-priced originator drugs." The organization added: "Such a market environment weakens competition, limits patients' access to lower-cost treatment options, and dampens capital's willingness to invest in follow-on biosimilar development." According to AAM statistics, generic and biosimilar medicines together saved the U.S. healthcare system $496 billion last year, an increase of $30 billion from 2024; generics accounted for 95% of the savings. AAM said biosimilar development mainly targets biologics with large market potential and soon-to-expire patents. Competition from corresponding biosimilars is especially intense for originator drugs with annual sales exceeding $1 billion before patent expiry. AAM also mentioned that originator drugmakers use large rebates to court pharmacy benefit managers, prompting the latter to prioritize high-priced originator drugs, exploiting loopholes in the existing system. Alex Keeton, executive director of AAM's biosimilars division, said: "The current payment and reimbursement system is inherently more favorable to high-priced originator medicines." The U.S. biosimilar industry is also mired in numerous patent disputes, with the number of patents asserted in U.S. courts more than ten times that of countries such as the United Kingdom and Canada. PhRMA, a lobbying group representing drugmakers, blamed pharmacy benefit managers for the biosimilar void and defended the U.S. intellectual property system, saying it provides years of market exclusivity for life-saving medicines. A PhRMA spokesperson said: "If policymakers want to lower costs and accelerate competition, they should focus on the insurer-PBM complex, not the intellectual property system that has delivered more than 900 new medicines since 2000." The Pharmaceutical Care Management Association, an industry group for pharmacy benefit managers, said that "abuse of the patent system often blocks biosimilars from entering the market," adding that pharmacy benefit managers are planning to ensure biosimilars become the primary choice for patients.