FDA to streamline approvals for generic biological drugs in latest move targeting health costs
By Deidre McPhillips, CNN
(CNN) — The US Food and Drug Administration will take steps to streamline the development of generic versions of complex biological drugs, the agency announced Wednesday. The changes are meant to accelerate approvals of cheaper alternatives to medications that treat a wide range of illnesses, leading to increased market competition and lower drug costs for Americans.
Biologic drugs are developed using living sources such as bacteria, yeast and animal cells, which inherently creates more variation and makes manufacturing more complex than for chemically derived drugs. Biologics have a special pathway to FDA approval, and biosimilars — alternatives to the brand name products — have long been treated differently than other generic drugs.
As part of Wednesday’s announcement, the FDA released new draft guidance that proposes allowing companies to scale back on the studies and trials needed to prove that a biosimilar product is similar enough to an existing FDA-approved product.
“Biosimilars are often far more affordable to patients and have the promise to significantly lower health care costs in America,” FDA Commissioner Dr. Marty Makary said in a statement. “By streamlining the biosimilar development process and helping advance interchangeability, we can achieve massive cost reductions for advanced treatments for cancer, autoimmune diseases, and rare disorders affecting millions of Americans.”
Biologic medications account for just 5% of prescriptions in the US but more than half of total drug spending, according to the FDA. The agency has approved only 76 biosimilars as of early October, it says, and only about 1 in 10 biologic drugs that will lose patent protection in the next decade currently has a biosimilar in development.
The proposed changes will help drug companies cut the time needed to bring a biosimilar to market in half and can slash development costs by $100 million, Makary said at a news conference Wednesday.
“The fastest-growing area of health care spending in the United States is drug spending, and the fastest area of drug spending increases is with this new class of medicines called biologics,” he said. “Lower prices for drug development means lower R&D costs and lower drug prices for everyday Americans.”
The first biosimilar approval in the US happened in 2015. In analyzing data from the decade since, the FDA says that clinical efficacy studies that directly compare a biosimilar to its reference product to confirm that there are no clinically meaningful differences in safety and efficacy “add little scientific value compared with analytical testing.”
The new guidance “reduces this unnecessary resource-intensive requirement for developers to conduct comparative human clinical studies,” which can take years and cost tens of millions of dollars, the agency said. Instead, it allows drug developers “to rely instead on analytical testing to demonstrate product differences.”
Humira is an injectable biologic drug used to treat several autoimmune conditions, including rheumatoid arthritis, and has been one of the top-selling medications since it was approved by the FDA in 2002. Ten biosimilars for Humira have been approved since 2016, but the first one just became available in 2023.
“The fundamental problem in health care is that we have non-competitive markets,” Makary said. “When you have that gap, it allows a longer period of no competition. So we want to see more competition, and we want to see more innovation.”
In June, Truveta Research analyzed prescription trends for nearly 67,000 people taking Humira. It found that between January 2023 and April 2025, about 13% of them had evidence of switching to a biosimilar. But among those who switched, about 13% had evidence of switching back to Humira.
“This means for every 100 people on bio-originator Humira, 13 switched to a biosimilar, and 2 switched to a biosimilar and then switched back to bio-originator Humira,” Truveta wrote in a research blog post.
The switch to biosimilars “may reflect changes in insurer policies, growing trust among providers and patients in biosimilars, or broader shifts in the drug market,” Truveta researchers wrote, but “initial switches may not always be sustained despite lower cost.”
“Notably, nearly 40% of patients who returned to bio-originator Humira did so within 30 days of initiating a biosimilar, suggesting early dissatisfaction [or] adverse reactions. Given that many patients switched back before completing a typical Humira dispense, this pattern may also reflect fear or uncertainty about switching to a biosimilar,” the researchers wrote.
Biosimilars are not exact copies of reference drugs like other generic drugs, and there’s an added layer of approval needed for a biosimilar to be considered “interchangeable” — a classification that allows pharmacists to substitute it without consulting a prescriber.
The FDA said Wednesday that it also plans to remove regulatory barriers — generally recommending against “switching studies” — required for biosimilars to receive this classification.
“Science continues to evolve, and the FDA remains committed to advancing common-sense policies that further promote efficient and effective biosimilar and interchangeable biosimilar development, without compromising safety and effectiveness,” Dr. George Tidmarsh, director of the FDA’s Center for Drug Evaluation and Research, said in a statement.
The FDA’s new guidance for biosimilars could start to make an impact quickly, said John Murphy, president and CEO of the Association for Accessible Medicines, a trade group for generic and biosimilar drugmakers.
“I think you will start to see clinical development and investment capital allocation decisions happen fairly quickly,” he said. Drug development will still take time, but there could be meaningful signals of change in pipeline strategies made within the next three to six months.
Lower costs for biosimilar development could also encourage drugmakers to broaden their scope to include biologic products with smaller patient markets, Murphy said.
Still, experts say there are additional challenges to ensure that insurance plans and other health care economics allow for investment into biosimilars and create competition as intended.
“We welcome the administration’s focus on increasing biosimilar access and affordability,” Alex Schriver, senior vice president of public affairs for PhRMA, a trade group representing pharmaceutical companies, said in a statement. “Policymakers must fix the misaligned incentives and business practices by middlemen who block biosimilars and profit off medicines at the expense of patients.”
Wednesday’s announcement is among several steps by the Trump administration to lower drug costs, including an executive order calling for drugmakers to offer drugs to US patients with the lowest, or “Most Favored Nation,” price and the creation of a “TrumpRx” direct-to-consumer website for certain drugs.
The FDA said in a fact sheet that costly drugs can lead to people skipping doses and abandoning treatment, and many people face insurance coverage gaps and high deductibles.
“With today’s action, the FDA aims to help more companies bring affordable, high-quality biosimilars to market and reduce costs for the American people,” the agency said in a statement.
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