The current US health care system is unsustainable as health care expenditures approach 20" of GDP. Biologics are becoming an even more important part of the pharmaceutical industry. This chapter examines the situation for biologics and biosimilars in light of the new possibilities afforded by the Biological Price Competition and Innovation Act (BPCIA). It includes the experience of other countries where biosimilars have been available. Accordingly, the chapter considers the role of patents, provision for data and market exclusivity, entry barriers, competitive considerations, and regulatory matters, among other issues. It also notes distinctions between biologics and chemical drugs and their impacts on the market. Since biosimilars are not identical but highly similar, they cannot be automatically substituted at the pharmacy level unless they are interchangeable. Pharmaceutical innovation has led to tremendous advances in the treatment of diseases and has enhanced both the length and quality of life. The actual patent protection may last around 10–12 years.