Drugs that are procured from living cells and are used to treat acute and chronic diseases are called biologics, whereas biosimilars are the drugs which are highly similar but not identical to the original reference product. The main advantage of these drugs is that they are highly targeted with great therapeutic activity and can be used for multiple indications. Despite all the advantages biologics are still extremely costly. The main purpose of developing and introducing biosimilars was and is to increase market competition leading to a decrease in the cost of the biologics. However, until now the cost of the treatment has not decreased in the US market because there are many barriers to the entry of biosimilar in the US market which are discussed in this article. In this article, we argue that the barrier or hurdle in the US market entry of the biosimilars is not only limited to patent protection or exclusivity but other less discussed barriers are also there which are to be discussed. Due to these barriers till June 10, 2020, only 9 biosimilars are available commercially in the US market out of the 27 biosimilars approved for marketing by the U.S. Food and Drug Administration (FDA). We argue that the introduction of these biosimilars in the US market is essential for increasing market competition and thus decreasing the overall treatment cost for both the government and the payers. In this article, we are also providing perspective on the possible solutions to reduce these barriers and to encourage the entry of biosimilar in the US market.
Trade Barrier Elimination, Economics of Scale and Market Competition: Computable General Equilibrium Model