Biosimilars may bring price cuts of 40-50 percent

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The entry of copycat biotech drugs into the U.S. market could cut prices of expensive medications by 40 percent to 50 percent, depending on the level of competition among drugmakers, a top executive at CVS Health Corp, one of the US’ largest pharmacy benefit managers, told Reuters. The comments by CVS Health Chief Medical Officer Troyen Brennan suggest U.S. drug benefit managers will be pressing for much steeper discounts on new biosimilar drugs than the 20 percent to 30 percent widely expected by Wall Street. Generic versions of traditional pharmaceuticals can usher in discounts of as much as 98 percent. Biosimilars retain a much higher margin due to their more complicated manufacturing process, which can create a new version of a biotechnology drug but not an exact copy.

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