The introduction of biosimilar versions of complex biologic drugs to treat illnesses such as cancer and rheumatoid arthritis could cut US spending on biologics by $44 billion over the next decade, says new research.

Biologics have advanced medical treatment for many conditions, but they are often expensive and patient copayments for some can be several thousand dollars a year, says the study, from the RAND Corporation research institute.

In 2011, eight of the 20 US top-selling drugs were biologics and annual spending on them grown three times faster than other prescription medicines. While biosimilars are unlikely to produce as dramatic savings as an earlier generation of less-complex generics, their introduction is expected to increase competition and drive down prices, resulting in savings for patients, healthcare payers and taxpayers, it says.

With the US Food and Drug Administration currently developing regulations to govern the approval process for biosimilar versions of already-approved protein-based biologics, draft materials released by the agency suggest that not all biosimilars will be deemed interchangeable with their original counterparts, says RAND. Also, nearly all will require at least one head-to-head clinical trial to confirm similarity to the original biologic – a more strenuous process than for standard generics.

“The emergence of biosimilar drugs has the potential to create significant savings for the national’s healthcare system. However, the magnitude of savings will depend on a number of factors, including forthcoming decisions from the FDA,” said Andrew Mulcahy, the report’s lead author and a policy researcher at RAND.

To develop an estimate of the likely savings from biosimilars, RAND created a framework to predict their future use, considering issues such as the effect of increased competition and their acceptance by physicians, patients and payers. This also included examining the experience in the European Union (EU), where an approval process  for biosimilars was created a decade ago and several have now been approved.

The researchers examined 2013 sales information for over 100 biologics, including all blockbuster products with sales of more than $1 billion annually. In total, the drugs’ sales in 2013 were $66.3 billion across all distribution channels.

Assuming that biosimilars will penetrate 60% of the market, they will save the US $44.2 billion over 10 years, or about 4% of the total sales for biologics over the period, they estimate.

However, a number of additional, yet-to-be determined issues ultimately will determine the size of the cost savings and who will benefit, including how much future use of biologics will grow as some patients decide to switch to them once biosimilars make such treatment more affordable. Some cost savings will accrue to patients but physicians and hospitals may also benefit, because biologicals are often purchased by health providers and administered in clinics and other treatment settings, it adds.