biosimilar product to Australia through Organon ANZ. The expansion deepens their 13‑year partnership as the Australian government considers making biosimilars the default for patients starting biologic therapy—a move that could free up A$1.5 billion in PBS savings over five years, according to the Generic and Biosimilar Medicines Association.
The partnership expansion coincides with Sun Pharmaceutical Industries’ planned US$11.75 billion acquisition of Organon, a deal that could reshape biosimilar commercialisation in Australia. Despite strong pricing levers, Australia’s biosimilar uptake remains far below the OECD average, highlighting the gap the proposed reform aims to close.
Sun Pharmaceutical Industries agreed in April 2026 to buy Organon for US$11.75 billion in cash. The acquisition, expected to close early next year, will turn Organon’s Australian biosimilar rights into assets of an Indian acquirer and make the combined entity the seventh‑largest biosimilar seller globally.
It arrives at a precarious moment. On July 16, Samsung Bioepis and Organon expanded their commercial agreement to bring a fourth biosimilar to Australia—Epyztek, a ustekinumab product that references Johnson & Johnson’s Stelara. This marks the fifth product in the global Samsung Bioepis–Organon partnership, which began in 2013. The move deepens their local footprint just as Canberra weighs making biosimilars the default for patients initiating biologic therapy. The consultation, part of the May 2026 budget, targets an estimated A$1.5 billion in PBS savings over five years.
The product hiding in plain sight
Epyztek, a ustekinumab biosimilar, is the undisclosed fourth product for Australia. Samsung Bioepis handles all development and manufacturing from its Songdo campus in South Korea; Organon ANZ holds exclusive commercial rights in Australia for a decade from launch and shares gross profits equally. The alliance already supplies four PBS‑listed biosimilars: Brenzys (etanercept), Renflexis (infliximab), Hadlima (adalimumab), and Ontruzant (trastuzumab).
South Korea’s Ministry of Food and Drug Safety signalled in July 2026 that it would begin allowing biosimilar developers to skip Phase 3 trials when they can show equivalence through quality, non‑clinical and pharmacokinetic comparisons. The change could shorten Samsung Bioepis’s development timelines for follow‑on products, a potential advantage as the company targets more than ten additional biosimilar candidates by 2030. Products from Samsung Bioepis pass through Korean and Australian regulatory review—a dual layer that the TGA and MFDS maintain through comparability assessments and post‑market monitoring, alongside ongoing PBS compliance obligations.
Australia’s anti‑TNF biosimilar uptake stands at 36 percent—far below the OECD average—leaving billions in potential PBS savings unrealised. An analysis published by Organon ANZ found that biosimilars saved the PBS AU$1.03 billion between 2015 and 2022, with billions more projected through 2027 if uptake continues to rise. The Generic and Biosimilar Medicines Association separately estimates that default prescribing could free A$1.5 billion in budget headroom over five years.
For an Australian patient starting biologic treatment for Crohn’s disease, the default option could soon be a biosimilar rather than the originator brand. While their out‑of‑pocket cost may change little under the PBS safety net, the switch redirects thousands of dollars per patient into system savings.
Under the National Health Act 1953, when a biosimilar gains PBS listing, the price of all brands of that reference biologic must be cut by up to 25 percent. Subsequent price disclosure rules compel manufacturers to report actual transaction prices, triggering further downward adjustments. The Therapeutic Goods Administration had approved 65 biosimilars by March 2026, according to a government fact sheet. The Department of Health’s biosimilar medicines information collection already includes a fact sheet for ustekinumab, signalling the molecule’s eligibility once a biosimilar is listed.
| Country | Current rule | New rule | Effective date |
|---|---|---|---|
| Australia | Statutory price cut up to 25% on all reference product brands when a biosimilar gains PBS listing | Ongoing; updated price disclosure mechanisms supplement the cut | In place since 1953 |
| Australia | Prescribers may choose originator or biosimilar for new patients | Proposed default biosimilar prescribing for treatment‑naïve patients (under consultation) | Late 2026 or early 2027 if adopted |
| South Korea | Phase 3 clinical trial required for biosimilar approval | Phase 3 trial can be waived if quality, non‑clinical and pharmacokinetic comparability is demonstrated | July 2026 |
The decision that will define the market
The government’s consultation on default prescribing for treatment‑naïve patients is expected to conclude by late 2026 or early 2027. If adopted, it would represent a structural shift without forcing existing patients to switch. The potential savings depend on how quickly prescribers change habits; uptake of anti‑TNF biosimilars has been rising slowly from low single‑digit first‑year shares over the past decade.
The Samsung‑Organon announcement locks in a commercial base that Sun Pharma will inherit. Whether the new owner maintains current partnership terms is an open question. Australia’s biosimilar market is forecast to grow at 21 percent annually, making it a valuable piece of the commercial portfolio. Organon’s biosimilars segment accounts for about 11 percent of revenue.
Before any biosimilar reaches an Australian patient, it must secure TGA registration and a PBAC recommendation for PBS listing—a process that can take over a year and requires detailed cost‑effectiveness evidence. If Canberra does not adopt default prescribing, Australia will continue to rely on voluntary prescriber uptake, leaving billions in potential savings on the table and tempering market growth expectations for Samsung Bioepis, Organon and competitors.
Beyond the headline
The Timing
Australia’s consultation on default biosimilar prescribing is landing just as a new ustekinumab biosimilar joins an already broad PBS portfolio and Sun Pharma moves to acquire Organon. That synchrony compresses strategic decisions for government and industry: regulators must weigh structural policy change while a major commercial player’s ownership and pipeline strategy are in flux, raising the stakes of whatever default‑prescribing model Canberra chooses.
The Money Trail
The financial logic driving this story runs from PBS savings to global balance sheets. Australian biosimilars have already redirected over a billion dollars in spending and could unlock billions more, creating fiscal room for novel therapies. At the same time, Sun Pharma’s US$11.75 billion bet on Organon reflects expectations that commercial rights in markets like Australia will convert policy‑driven biosimilar uptake into durable revenue streams across Asia‑Pacific.
The Bigger Picture
Australia’s struggle to lift biosimilar uptake despite strong pricing levers illustrates a wider tension between cost containment and prescriber behaviour in high‑income health systems. Even with automatic originator price cuts, clinicians and patients often cling to familiar brands, delaying savings. If default prescribing succeeds, it may show that reshaping decision rules—not just adding products or tightening prices—is essential to unlock the full value of biologic competition in publicly funded drug plans.
The choices now facing patients, investors and policy makers
With a consultation underway and an acquisition pending, Western entities with exposure to the Australian biosimilar market face distinct decisions.
- Australian healthcare policy analyst
You must model the budget impact of default prescribing under different uptake scenarios. The GBMA’s A$1.5 billion estimate is one benchmark; cross‑referencing it with the Organon ANZ analysis that separates actual savings (AU$1.03 billion) from projected (AU$3.87 billion) will clarify how much headroom is realistically available and over what timeframe. The Department of Health’s biosimilar medicines collection provides the baseline data.
- Western pharmaceutical investor with APAC exposure
Evaluate Organon’s biosimilar revenue concentration ahead of the Sun Pharma close. The segment’s 13 percent annual growth and Australia’s 21 percent CAGR suggest a market that could expand quickly if default prescribing passes. Monitor Sun Pharma’s regulatory filings for any disclosure on partnership continuity and pricing strategy in Australia, as well as the outcome of the government consultation, which will determine the rate of biosimilar volume growth.
- Australian chronic disease patient on biologics
If you are starting a biologic for the first time, check whether a biosimilar version is PBS‑subsidised for your condition. The Department of Health’s biosimilar medicines information collection lists current fact sheets for adalimumab, etanercept, infliximab, ustekinumab and others. Talk to your doctor about whether a biosimilar is appropriate; any new default rule would not force existing patients to switch.
- Global biosimilar manufacturer or R&D executive
Australia’s move toward default prescribing could become a template for other high‑income markets with public drug plans. If the policy is adopted and savings materialise, expect other jurisdictions—particularly in Europe and Canada—to study the Australian model. Begin preparing comparative cost‑effectiveness dossiers that anticipate the kind of evidence the PBAC will demand, and track the consultation timeline closely to time submissions.
FAQ
Will existing patients on originator biologics have to switch?
The current consultation explicitly focuses on treatment‑naïve patients and does not propose forcing existing users of originator biologics to switch to biosimilars. In practice, prescribers could still recommend a switch where clinically appropriate, but any default‑prescribing rule would apply only when initiating therapy. Stable patients would have scope to remain on their current product subject to PBS listing decisions.
How do prescribers get information on available biosimilars?
Australian prescribers can access detailed TGA and PBS information through the biosimilar medicines information collection, which offers fact sheets for each subsidised molecule outlining brands, indications and substitution guidance. Combined with the March 2026 list of TGA‑approved biosimilars, these resources help clinicians understand which alternatives exist and support conversations with patients about switching or initiating treatment on a biosimilar.
What practical steps do sponsors need to prepare a PBAC submission?
Sponsors planning PBS listing for a new biosimilar must compile robust comparative cost‑effectiveness data, including quality‑adjusted life‑year analyses against the originator, and address utilisation patterns from existing PBS experience. They should align submissions with HTA Review directions and be ready for price negotiations that incorporate statutory cuts and disclosure rules. Early engagement with the PBAC secretariat and consultation documents helps anticipate evidentiary expectations.
Explainer
- Biosimilar
- A biosimilar is a highly similar version of a biologic drug, approved based on analytical, non‑clinical and clinical comparability to an originator product, rather than exact chemical replication like a generic. Development costs typically run 10–20% of originator costs. The first biosimilar approved in Australia was somatropin in 2010, long before the current wave of oncology and immunology products.
- PBS
- The Pharmaceutical Benefits Scheme is Australia’s national drug subsidy programme, listing thousands of prescription medicines that are dispensed at subsidised prices. A biosimilar must receive a positive PBAC recommendation and government approval before it can be listed. The PBS covers over 5,000 medicine brands and directly regulates the price patients pay through co‑payments and safety nets.
- TGA
- The Therapeutic Goods Administration is Australia’s regulatory agency for medicines and medical devices, part of the federal Department of Health. It assesses biosimilars using comparability of quality, safety and efficacy data against the reference biologic. The TGA is a full member of the International Council for Harmonisation, aligning its standards with major regulators.
- PBAC
- The Pharmaceutical Benefits Advisory Committee is an independent expert body that recommends which medicines should be subsidised on the PBS, based on clinical effectiveness, cost‑effectiveness and budget impact. It meets three times a year to consider submissions, and its advice is critical for market access. A positive PBAC recommendation does not guarantee PBS listing; the government makes the final funding decision.
- Ustekinumab
- Ustekinumab is a biologic monoclonal antibody that targets interleukin‑12 and ‑23, used to treat psoriasis, psoriatic arthritis and Crohn’s disease. Johnson & Johnson’s Stelara was the originator brand, which recorded global sales of US$9.7 billion in 2022 before patent expiry. Epyztek (Samsung Bioepis’s version) is one of several ustekinumab biosimilars entering the market globally.
- National Health Act 1953
- The National Health Act 1953 is the Australian legislation that underpins the PBS, including the statutory pricing rules for medicines. Division 3A of Part VII mandates a price reduction on all brands of a reference biologic when a new brand—often a biosimilar—is first listed. The Act was amended in 2010 to streamline biosimilar evaluation and registration pathways.
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