Correcting the Record: Pharmacy Benefit Companies Support and Promote Generics and Biosimilars

Pharmacy benefit companies actively promote the use of generics and biosimilars.

Take a look at the data on drug utilization: 90 percent of prescriptions dispensed are generics or biosimilars.

During last week’s hearing in the House Oversight Committee, Dr. Rena Conti, health care economist and associate professor in the Department of Markets, Public Policy, and Law in the Questrom School of Business at Boston University, stated:

“PBMs steer patients to use, in general, the cheapest and most effective drug for them. That includes over a 90 percent utilization of generics and biosimilars when they are available. This benefits patients and it benefits their health.”

“Formularies push patients to use low-cost, safe and effective drugs, largely generic and biosimilars when they’re available; that reduces costs for us all and also expands access.”

It’s worth noting Dr. Conti also said: “Drug prices are set high in the United States because, simply, drug manufacturers can charge them, and we will pay them.”

According to a paper by University of Chicago economist Casey Mulligan, published in the National Bureau of Economic Research (NBER) Working Paper Series, the work of pharmacy benefit companies increases generic dispensing rates by 15 percent. Further, thanks to PBMs’ efforts incentivizing patients to take generics, when available, generics are dispensed 97 percent of the time.

A study published in Health Affairs found that generic drugs are getting placed on formularies. The study’s academics summarized the study saying, “Overall, we found that most Part D plan formularies are designed to encourage the use of generics rather than their brand name counterparts.”

Fierce competition in the generic market is what drives down prices. According to the Food and Drug Administration (FDA), generic drug prices relative to branded drug prices continue to fall as additional competitors become available. But according to this FDA study, the true promise of generic drugs does not occur until at least four generics are available and prices fall to nearly 80 percent lower than the branded version, with prices 90 percent lower or more being the norm with six competing generics. In response to generic competition, the net costs of branded drugs tend to also fall over time.

For biosimilars, it’s a similar story, but it is important to note the biosimilar market is just beginning to develop, given drug companies’ flagrant abuse of the patent system impeding progress. Most biosimilars are provider-administered drugs that are outside of the retail pharmacy payment channel. But the first biosimilar to a major blockbuster biologic to enter the retail pharmacy market came in February of this year.

Today, biosimilars are starting to make an impact, and PBMs are doing their part by preferring both the brand and biosimilar products so that physicians in consultation with their patients can determine what product is right. The market will continue to develop as more competitors and more products enter, and as we have seen with other, provider-administered biosimilars, coverage will increase as prices decline.

Bringing more biosimilars to the retail pharmacy market will allow pharmacy benefit companies to more effectively leverage competition to reduce drug costs for health plan sponsors and enable access for patients.


See PCMA’s statement applauding the introduction of the Biosimilar Red Tape Elimination Act, which will increase competition within the U.S. biosimilar market and improve access to more affordable alternatives to brand name prescription drugs, HERE.

Read highlights and listen to our most recent episode of “The Pharmacy Benefit” podcast on why we need competition to drive down prescription drug costs HERE.

See PCMA’s recent blog on how a robust U.S. biosimilar market will encourage competition and lower prescription drug costs for patients HERE and a blog highlighting a recent webinar where a robust panel of experts discussed the U.S. biosimilar market HERE.

See PCMA’s guide to understanding the role and value of pharmacy benefit companies HERE.


PCMA is the national association representing America’s pharmacy benefit companies. Pharmacy benefit companies are working every day to secure savings, enable better health outcomes, and support access to quality prescription drug coverage for more than 275 million patients. Learn more at