State Health Plans Could Save $1.8 Billion Through Biosimilar Use

The report highlights a significant fiscal discrepancy: while biosimilars have already accounted for $56 billion in national savings, many state-run health plans remain tethered to high-cost biologic drugs. In 2024 alone, these plans spent approximately $20 billion on originator biologics to treat complex conditions like cancer, rheumatoid arthritis, and Crohn's disease. By aggressively adopting lower-cost alternatives—which can be 75 to 90 percent cheaper than the originals—states could capture between $900 million and $1.8 billion in yearly savings.

Dr. Wayne Winegarden, director of the Center for Medical Economics and Innovation, noted that this shift offers a rare policy win that preserves employee access to high-quality care while easing the burden on taxpayers. California stands to gain the most, with potential savings reaching $179 million, while states like Texas, Florida, and New York could each trim over $100 million from their annual expenditures. With over 100 biologic patents set to expire within the next decade, the window to institutionalize these cost-saving measures is widening, potentially shielding state budgets from the rising costs of specialty pharmaceuticals.