Drug manufacturers have recently begun submitting biosimilar applications to the Food and Drug Administration (FDA), leading many to believe that a robust U.S. biosimilar industry and substantial health savings are right around the corner. In this paper, I present an empirical assessment of the viability of biosimilars in the U.S. market and caution against such optimism given biosimilars’ considerable development costs, moderate expected market share, and diminished profit margins relative to a typical biologic.
