The equivalence margin is the largest difference that is clinically acceptable between the test (or experimental) drug and the active control (or reference) drug. This paper discusses the scientific principles, along with the regulatory issues, that need to be addressed when determining the equivalence margin for the biosimilar product. The concept of assay sensitivity is introduced, and the ways to ensure assay sensitivity in the equivalence trial are emphasized. A hypothetical example is presented to show how an equivalence margin is determined. The regulatory agency should carefully assess if the equivalence margin of the biosimilar product was determined using a scientifically valid and clinically relevant approach, not subject to selection bias. This is important because the consumer risk of erroneously declaring equivalence when in fact it is not must be controlled conservatively low in the approval of any biosimilar products.