A recent industry analysis warns that over the next decade, nearly 90% of biologic drugs losing their market exclusivity will lack a corresponding biosimilar in development, creating a significant competitive void.

This so-called "biosimilar gap" could result in the loss of up to $189 billion in potential healthcare savings for the United States, according to a report released last week by the Association for Accessible Medicines (AAM), a lobbying group representing generic drug manufacturers.

Out of the 118 biologic products set to lose patent protection between 2025 and 2034, only 10% are expected to face immediate biosimilar competition, the report states.

The findings come amid ongoing disputes among pharmaceutical benefit managers, drugmakers, and health insurers, each deflecting blame for persistently high U.S. drug prices. Biosimilars are lower-cost versions of complex biologic molecules, which are frequently used to treat serious conditions like cancer and account for a growing share of U.S. healthcare spending. Examples include blockbuster drugs such as AbbVie Inc. (NYSE: ABBV)'s Humira and Johnson & Johnson (NYSE: JNJ)'s Stelara.

"Once biosimilars enter the market, their success often hinges not on clinical value or lower pricing, but on opaque contracting mechanisms, rebate-driven incentives, and drug formularies that favor high-cost originator products," the AAM wrote. "This kind of market environment weakens competition, limits patient access to affordable treatment options, and discourages future investment in biosimilar development."

According to AAM data, generics and biosimilars combined saved the U.S. healthcare system $496 billion last year, up $30 billion from 2024, with generics accounting for 95% of those savings.

The AAM noted that biosimilar development is primarily directed at biologics with large market potential and expiring patents. Competition is particularly intense for originator drugs generating over $1 billion in annual sales before patent expiration.

The group also highlighted that originator companies leverage high rebate payments to pharmacy benefit managers, incentivizing the selection of pricier brand-name drugs and exploiting loopholes in the current system. Alex Keeton, executive director of the AAM's biosimilar division, stated, "The current payment and reimbursement system inherently favors higher-priced originator biologics."

The U.S. biosimilar industry is also entangled in extensive patent litigation, facing more than ten times the number of patent challenges asserted in U.S. courts compared to countries like the United Kingdom or Canada.

In response, PhRMA, a lobby representing pharmaceutical manufacturers, attributes the biosimilar gap to pharmacy benefit managers while defending the U.S. intellectual property framework for providing years of market exclusivity for life-saving medicines.

"If policymakers seek to lower costs and accelerate competition, they should focus on the insurer-PBM complex rather than an intellectual property system that has delivered more than 900 new drugs since 2000," a PhRMA spokesperson said.

Meanwhile, the Pharmaceutical Care Management Association, which represents pharmacy benefit managers, countered that "abuse of the patent system often hinders biosimilar market entry," adding that PBMs are actively working to make biosimilars the primary option for patients.