FDA Moves to Accelerate Biosimilar Development and Lower Drug Costs

FDA Works to Speed Up Biosimilar Development and Reduce Drug Prices The FDA has announced new measures to accelerate the development of biosimilar medicines, which are lower-cost alternatives to biologic drugs. These updates include simplifying biosimilarity studies and reducing unnecessary clinical testing, aiming to make it easier for biosimilars to be developed as interchangeable with brand-name biologics. Expensive biologic medications account for a significant portion of U.S. drug spending. While the FDA has approved 76 biosimilars, their market share remains below 20%. The new guidance reduces the resource-intensive requirement for developers to conduct comparative human clinical studies, allowing them to rely more on analytical testing. This is based on the FDA's data since the first biosimilar approval in 2015. The FDA aims to promote competition in markets dominated by high-cost biologics and provide additional treatment options for conditions like cancer, rheumatoid arthritis, diabetes, Crohn's disease, and osteoporosis. These actions intend to help more companies bring affordable, high-quality biosimilars to market and reduce costs for the American people. As of today, the FDA has approved 76 biosimilars. The document, a fact sheet from the FDA, discusses the issue of high drug costs, especially focusing on biosimilar drugs as a more affordable alternative to expensive biologic drugs. Biosimilars are described as the equivalents of generic versions of biologics, providing similar safety and effectiveness at much lower prices. The fact sheet highlights several key issues:

1. Patient Affordability Crisis: Biologic drugs can cost patients tens to hundreds of thousands of dollars annually, creating financial barriers for many Americans. Despite representing only 5% of prescriptions in the U.S., biologics account for 51% of total drug spending as of 2024. High costs lead to patients skipping treatments, rationing doses, or going without medication, resulting in worsened health outcomes.
2. Insufficient Biosimilar Market Competition: Although FDA-approved biosimilars are as safe and effective as branded drugs, their market share remains below 20%. Only 76 biosimilars have been approved, which is a small fraction compared to the over 30,000 approved generics. The FDA document states that in 2024, the FDA approved 42 biosimilars, compared to 110 approvals by the European Medicines Agency (EMA). Only 10% of branded biologics have biosimilars in development.
3. Barriers to Biosimilar Market Entry: The high cost of biosimilar development, combined with uncertain market returns, creates a challenging business case that deters investment. Comparative efficacy studies can cost around $24 million on average and take one to three years, adding little scientific value compared to advanced analytical testing.
4. Cost Savings: Biosimilars have generated $56 billion in healthcare savings since 2015, with $20 billion saved in 2024 alone. The sales price for biosimilars is, on average, 50% less than the reference brand biologic price at the time of launch.

The FDA proposes the following solutions:

• Eliminating Unnecessary Clinical Trials: Using improved analytical testing methods instead of requiring expensive human studies when the science shows they're not needed.
• Facilitating Pharmacy-Level Substitution: Removing barriers by advancing interchangeability so pharmacists can substitute lower-cost biosimilars.
• Reducing Red Tape: Providing clearer guidance and more efficient processes to speed up approvals and reduce development uncertainty.

The goal of these measures is to increase the availability and utilisation of biosimilars, thereby reducing healthcare costs and improving patient access to necessary treatments. This will help many Indian Biosimilar developers, such as Intas, Zydus Lifesciences, and Biocon, among others. Next immediate steps The draft guidance was announced on October 29, 2025. As a next step, the official notice of availability must first be published in the Federal Register. The public will then have 60 days from the date of publication in the Federal Register to submit their comments and suggestions to the FDA. While the exact final date depends on the Federal Register publication, one can expect the comment period to be around late December 2025 or early January 2026.

FDA guidance is available here.