You may have heard of certain kinds of medications called biologics and biosimilars. These medications are often considered cutting-edge and as they become available, have opened up opportunities to treat chronic conditions and medical illnesses that previously had little to no other treatments.
However, biologics play a significant role in health care spending. Understanding the difference between biologics and biosimilars can help you navigate any future prescriptions and treatments you may encounter, while keeping your health care costs as affordable as possible.
What are biologic medications?
Most conventional drugs are made from chemical synthesis, with a known structure that can be replicated by more than one manufacturer.
Biologic medications are different: they are highly complex mixtures and made from living cells. The first biologic was recombinant human insulin, which was developed in 1982. Biologic medications have expanded greatly since then and have accounted for a third of all new medicines approved by the United States Food and Drug Administration (FDA).
Biologic medications are used to treat:
- Diabetes
- Cancer
- Autoimmune diseases
Some examples include insulin and monoclonal antibodies. However, biologics often come at a higher cost. While biologics make up 5% of prescriptions in the U.S., they account for 51% of total drug spending. Biologics are also the fastest growing segment of pharmaceutical research.
A new biologic often costs millions of dollars for a drug company to develop and test. Some common brand biologics you may be familiar with are Humira®, Remicade®, and Avastin®.
What are biosimilars?
Biosimilars are the equivalent of the "generic version" of expensive, FDA-approved biologic drugs, and they offer the same safety and effectiveness as brand-name biologics, according to the U.S. Department of Health and Human Services.
Original biologic products developed by drug manufacturers cannot be exactly replicated due to their complexity, but when a drug manufacturer’s patent on a biologic expires, other drug manufacturers are allowed to create biosimilars, which are highly similar but not chemically identical to the original reference product.
The availability of multiple biosimilars can increase competition in a market where there are often limited biologic options. As a result, biosimilars often provide lower cost alternatives to an expensive type of medication.
Biosimilars have saved the U.S. health care system more than $56 billion since 2015, according to the Association for Accessible Medicines.
Biosimilars save Blue Cross Blue Shield of Michigan members more than 90% over brand-name specialty drugs in 2025
Michigan insurers are under an increasing amount of financial pressure, driven largely by the skyrocketing prescription drug prices.
Drugmakers continue to influence the market toward new, expensive products spending millions on TV advertising and direct-to-consumer tactics — even as lower-cost biosimilars become available.
Blue Cross is innovating to protect our members and customers. That includes switching to biosimilars, like we did with Humira and Stelara®, which have saved millions for our members and customers. We expect our work to advance biosimilars this year will give our members access to lower-cost alternatives that will save between $35 million and $50 million.
Adopting more biosimilar drugs in faster and creative ways is one way we’re working to keep health care affordable. Our biosimilars strategy relies on innovation and partnership.
In 2025, Blue Cross secured the best biosimilar options at the best negotiated price through our partnership with Evio Pharmacy Solutions – an independent company we launched along with five other Blue Cross and Blue Shield-licensed health plans. We paired that approach with a limited pharmacy distribution model that increases the savings by working with our Exclusive Specialty Network and giving members home delivery of their medications.
Now, 99% of our members taking Humira and Stelara are instead taking our approved biosimilars, benefitting from continued results from their medication and significantly lower costs with their Blue Cross and Blue Care Network coverage.
How biosimilars are different from generic drugs
Generic drugs are small-molecule products that can be chemically synthesized to replicate a brand-name drug. In contrast, biosimilars are derived from natural and living organisms like their biologic reference products.
However, biosimilars and generic drugs do have some things in common: both are versions of previously FDA-approved medications and may offer more affordable treatment options to patients. And both go through a rigorous FDA review process to ensure they’re just as safe and effective as their reference products.
Health care providers and organizations who care for patients with chronic conditions endorse the safety, purity and potency of biosimilars as a treatment alternative.
Click here to learn more about Blue Cross Blue Shield of Michigan's commitment to affordability.
Photo credit: Getty Images
