Biosimilar Drugs Explained

A biosimilar is a biological product that is highly similar to an existing FDA-approved reference biologic, with no clinically meaningful differences in safety or efficacy. Think of a biosimilar as a generic for a biologic: because biologics are large, complex molecules derived from living organisms, they can't be copied exactly, so a biosimilar is comparable to, but not an identical copy of, its reference product.

Generics are exact, chemically synthesized copies of small-molecule brand-name drugs, approved by demonstrating bioequivalence. Biosimilars are large biologic molecules that are highly similar, but not identical, to their reference product. Because biologics are derived from living cells, they can't be copied exactly the way small-molecule generics can, so approval requires comparative analytical and clinical studies rather than a simple bioequivalence demonstration.

An interchangeable biosimilar meets all standard biosimilar requirements and adds switching studies showing that alternating between the biosimilar and the reference product works just as well. Only interchangeable biosimilars may be substituted for the reference product at the pharmacy without prescriber involvement.

Biosimilars are coded with HCPCS Q codes that begin with Q5. Each biosimilar receives its own unique Q5 code rather than sharing the reference product’s code, so it can be tracked and reimbursed individually.

Browse the Q-code drug list →

Medicare calculates the payment limit for a biosimilar at either 6% or 8% above the average sales price (ASP) of the biosimilar’s reference drug, so reimbursement is anchored to the reference product rather than the biosimilar’s own ASP.

Compare a reference drug against its biosimilars →