Health Canada June 2025 Draft Biosimilar Lower Costs, New Pressures and Opportunities

Regulatory Change: Speed and Science Over Redundancy

Health Canada’s June 2025 draft biosimilar guidance eliminates mandatory comparative clinical efficacy trials for most biosimilars, relying instead on rigorous analytical, pharmacokinetic, and pharmacodynamic studies. If a biosimilar can be extensively characterized and shown to be highly similar to a Canadian reference biologic drug (CRBD) using modern analytical methods, then lengthy Phase III efficacy studies are no longer required, except in exceptional cases.

The regulatory objective is to deliver reliable safety and quality while removing redundant barriers for drug makers. This reform is supported by a global body of real-world evidence: multiple international health agencies now acknowledge that comparative efficacy trials rarely offer new, meaningful information when biosimilars meet rigorous similarity criteria.

British Columbia: Biosimilar Adoption with Real-World Results

BC’s biosimilar initiative stands as Canada’s definitive case study. Since 2019, the province transitioned over 40,000 patients from originator biologics to biosimilars for conditions such as rheumatoid arthritis, Crohn’s disease, ulcerative colitis, psoriasis, oncology indications, and diabetes.

Over just five years, the province reported $732 million in direct drug cost savings, which were reinvested to expand coverage for innovative devices and novel therapies—such as continuous glucose monitoring technology and advanced cystic fibrosis treatments. Importantly, academic and real-world studies show no rise in hospital visits, complications, or negative health events during or after the switch. Patients maintained stable outcomes and treatment satisfaction, reinforcing the safety and effectiveness of biosimilar adoption.

Therapeutic Areas Most Affected

The regulatory shift will directly accelerate access to biosimilars across five high-impact therapeutic areas:

• Immunology & Autoimmune Diseases – rheumatoid arthritis, psoriasis, Crohn’s disease, ulcerative colitis.

• Oncology – colorectal, lung, ovarian, and brain cancers.

• Gastroenterology – inflammatory bowel diseases where biologics are standard of care.

• Allergy & Respiratory Medicine – severe asthma, chronic urticaria, nasal polyps.

• Endocrinology & Bone Health – emerging areas such as osteoporosis.

Together, these areas represent the majority of Canada’s biologic drug spend—making them priority arenas for cost savings, expanded patient access, and innovation.

Challenges Ahead

• Manufacturing & Supply Chain: Biologics are complex to produce, requiring global supply coordination, advanced analytics, and strict quality control. Any disruption could constrain availability.

• Logistics & Distribution: Cold chain requirements, switching protocols, and varying provincial adoption strategies can create friction. Clinician and patient confidence must be carefully managed.

• Delivery & Administration: Formulation differences (IV vs. subcutaneous) demand patient training and system adaptation. Concerns about switching, even if not supported by evidence, can affect adherence.

Benefits on the Table

• Cost Savings: Biosimilars typically launch 15–40% below originator prices. Large-scale adoption as proven in BC, frees hundreds of millions for reinvestment.

• Improved QALYs: Lower costs mean more patients can be treated with the same healthcare budget, improving overall health-adjusted life years.

• Expanded Access: Savings allow provinces to add new therapies and technologies to formularies. Subcutaneous versions reduce hospital burden and improve convenience.

• System Resilience: Multiple biosimilar entrants reduce dependency on a single supplier and improve security of supply.

How Choices Are Made

In practice, provinces and insurers run competitive tendering or listing processes to decide which biosimilar will be the “preferred” option for a given reference biologic. Selection is based on price, supply reliability, and clinical equivalence. These agreements usually last 2–3 years, during which patients are transitioned to the preferred product and new patients are initiated on it. At contract renewal, other biosimilars may compete for preferred status, keeping downward pressure on prices and ensuring ongoing availability.

Evidence and Expert Consensus

Most biosimilars are now so well characterized that additional efficacy studies add little value if analytic and PK/PD benchmarks are met. As Health Canada’s guidance notes:

“The clinical studies required to support the authorization of a biosimilar are generally limited to a comparative pharmacokinetic trial … Clinical efficacy and safety studies are typically not required for a biosimilar candidate …”

Real-world Canadian evidence backs this up. Peer-reviewed studies in 2024 confirmed no increase in hospitalizations or healthcare use after mandatory switches to biosimilars in BC, reinforcing confidence in both patient safety and system benefits.

What It Means for Pharmaceutical Innovators

Potential Negatives

• Revenue Erosion: Faster biosimilar entry accelerates the loss of exclusivity cliff, shrinking margins on blockbuster biologics.

• Portfolio Pressure: Reduced cash flows from legacy biologics can tighten R&D budgets, potentially slowing new drug development.

• Tender Dynamics: Preferred biosimilar listings can lock out originators from formularies, even if some prescribers prefer the innovator.

• Perception Risks: Switching policies may reinforce a narrative that originators are “overpriced,” creating reputational and pricing pressure.

Potential Positives

• Pipeline Refocus: Biosimilar competition pushes companies to concentrate on true innovation—cell and gene therapies, precision biologics, and high-value novel mechanisms.

• Lifecycle Extensions: Some innovators co-develop or license biosimilars, creating dual revenue streams.

• Market Expansion: Savings from biosimilars allow payers to fund newer, innovative drugs, benefiting originator pipelines indirectly.

• Stakeholder Trust: Demonstrating cooperation in biosimilar transitions can strengthen relationships with regulators and payers.

Balanced View

For originator pharma, biosimilars create short-term commercial pain but long-term systemic opportunity. The more biosimilars help stabilize payer budgets, the greater the space for next-generation innovation to be adopted and reimbursed.

Takeaway: An Impetus to Adapt

Canada now stands at a turning point. Health Canada’s draft guidance, combined with BC’s proven experience, demonstrates that biosimilars can both safeguard patient outcomes and release resources for new medical technologies.

The challenges are real: complex manufacturing, distribution logistics, and the need for clinician and patient confidence. Yet the benefits are compelling: cost savings, expanded access, and more sustainable health outcomes measured in QALYs.

key message is not about winners and losers, but about alignment. Regulators, payers, pharmaceutical innovators, biosimilar manufacturers, clinicians, and patients are all part of the same system. The momentum for biosimilars shows that the impetus to adapt is stronger than ever, not just for cost control, but for the sustainability and innovation capacity of Canada’s healthcare system.·       

Ref:HC Guidance 2025, Gowling WLG 2025, PharmaInBrief 2025,Smart & Biggar 2025, Torys LLP 2025, BC Gov News 2024, Center for Biosimilars 2024, PMC 2025, PMPRB 2025