FDA moves to accelerate biosimilar development, lower drug costs

The U.S. Food and Drug Administration on Wednesday announced action to make it faster and less costly to develop biosimilar medicines, which are lower-cost “generic” alternatives to biologic drugs that treat serious and chronic diseases. In a new draft guidance, the FDA proposes major updates to simplify biosimilarity studies and reduce unnecessary clinical testing. The agency through a separate initiative also plans to make it easier for biosimilars to be developed as interchangeable with brand-name biologics, helping patients and pharmacists choose lower-cost options more easily. Expensive biologic medications make up only 5% of prescriptions in the U.S. but account for 51% of total drug spending as of 2024. FDA-approved biosimilars are as safe and effective as the branded drugs, yet their market share remains below 20%. To date, FDA has approved 76 biosimilars, corresponding to a small fraction of approved biologics. By contrast, there are more than 30,000 approved generics, exceeding the number of approved brand drugs. Only about 10% of biologic drugs expected to lose patent protection in the next decade currently have a biosimilar in development.”Today’s announcement of biosimilar reform furthers President Trump’s directive to lower drug prices for the American people,” Health and Human Services Secretary Robert F. Kennedy Jr. said. “Biologics treat many chronic diseases, but for too long, a burdensome approval process has kept patients from accessing more affordable biosimilars. This bold action by the FDA accelerates biosimilar development, drives market competition, expands patient options, and advances our mission to Make America Healthy Again.” Publicly traded companies in the space include AstraZeneca (AZN), Bristol Myers (BMY), Eli Lilly (LLY), GSK (GSK), Johnson & Johnson (JNJ), Merck (MRK), Novartis (NVS), Pfizer (PFE), Roche (RHHBY) and Sanofi (SNY).