Stelara (ustekinumab) treats chronic inflammatory conditions like plaque psoriasis, psoriatic arthritis, Crohn’s disease, and ulcerative colitis. Administered via injection or infusion, it offers significant therapeutic benefits. Despite its benefits, Stelara’s cost is notably high, raising concerns for patients and healthcare systems. Its price stems from complex drug development, market dynamics, and broader healthcare system factors.
The Science and Production Investment
Developing biologics like Stelara requires immense financial and time investment. Research and development (R&D) often spans over a decade, with average costs estimated between $800 million and $2.6 billion, including expenses for failed candidates. Only about 12% of drugs entering clinical trials gain approval, meaning successful medications must recoup costs from numerous unsuccessful projects. This investment covers drug discovery, preclinical testing, and multiple phases of clinical trials to prove safety and effectiveness.
Biologic manufacturing is inherently complex and costly compared to traditional small-molecule drugs. Produced from living organisms in precise environments, it requires specialized facilities costing $200 million to $500 million. The intricate steps, from cell culture to purification, demand stringent quality control and skilled personnel, contributing to higher production expenses and longer manufacturing times.
Navigating the regulatory approval process also adds significantly to the overall cost. Pharmaceutical companies must submit extensive documentation and data to agencies like the U.S. Food and Drug Administration (FDA) to demonstrate a drug’s safety, efficacy, and quality. The fee for filing a new drug application with clinical data can exceed $4.3 million in 2025. This regulatory oversight ensures patient safety but involves substantial financial and time investments for ongoing compliance and post-market surveillance.
Market Exclusivity and Competition
Patent protection plays a significant role in enabling pharmaceutical companies to charge high prices for their innovative drugs. These patents grant the manufacturer exclusive rights to produce and sell a drug for a specific period, typically 20 years from the patent filing date. This exclusivity allows companies to set prices without immediate direct competition, which is intended to incentivize the extensive R&D investments required for drug development.
Unlike small-molecule drugs with chemically identical generic versions, biologics like Stelara face a different competitive landscape with biosimilars. Biosimilars are highly similar to their reference biologic but are not exact copies due to their complex living-system production. Developing and gaining approval for a biosimilar is a complex and lengthy process, costing $100 million to $300 million and taking five to nine years. Regulatory pathways for biosimilars are rigorous, requiring robust analytical, preclinical, and clinical evidence to establish similarity, delaying market entry.
While biosimilar competition for Stelara began to emerge in early 2025 in the U.S., with several biosimilars launching, this has been a relatively recent development. Patent settlements and licensing agreements often delay the availability of biosimilars even after their approval. The challenges in bringing biosimilars to market, coupled with strategies to defend market share, have historically limited price competition for biologics and contributed to their sustained high costs.
Healthcare System Dynamics
Healthcare system dynamics also influence and sustain the high prices of drugs like Stelara. Pharmaceutical companies often justify high prices through value-based pricing. This approach asserts that a drug’s price should reflect its perceived value in terms of improving patient outcomes, reducing hospitalizations, and enhancing quality of life, especially for chronic conditions where treatment options may be limited. This value proposition is based on the drug’s benefits to patients, health systems, and society, aiming to reward innovation.
In many countries, particularly the United States, limitations on direct price negotiations between government payers and pharmaceutical companies have historically allowed drug manufacturers significant leverage in setting prices. For instance, Medicare, a major government healthcare program in the U.S., was previously unable to directly negotiate drug prices. However, the Inflation Reduction Act of 2022 introduced provisions allowing Medicare to negotiate prices for certain high-cost drugs, with the first negotiated prices, including for Stelara, expected to take effect in 2026.
The complex system of list prices, insurer negotiations, and rebates further complicates drug pricing. While pharmaceutical companies set a high list price, the net price paid by insurers after rebates can be lower. Rebates are financial incentives offered by manufacturers to pharmacy benefit managers (PBMs) and insurers, often in exchange for favorable formulary placement. However, lower net prices for insurers do not always translate into lower out-of-pocket costs for patients, and some research suggests a correlation between rising rebates and increasing list prices.
Pharmaceutical companies also offer patient assistance programs to help individuals manage their out-of-pocket expenses for high-cost medications. Programs like Janssen CarePath provide support to eligible patients, often through copay assistance or savings programs. While these programs can alleviate the financial burden for individual patients, they do not address the fundamental high cost of the drug itself within the healthcare system.