FDA’s Drug Price Push in Biosimilar Plan Hinges on Other Reforms

The FDA’s effort to curb high drug costs by accelerating approvals of cheaper medicines similar to expensive biologics will need other policy reforms to boost access to the biosimilars, drug pricing experts say.

The Food and Drug Administration is seeking to lower drug costs by simplifying the development of biosimilars, products that are highly similar to FDA-approved biologics, have no clinically meaningful differences, and can treat patients the same way. Biologics, such as AbbVie Inc.‘s blockbuster treatment Humira for rheumatoid arthritis and Merck & Co.‘s cancer medicine Keytruda, are complex drugs made from sources such as plant or animal cells.

Biosimilars are often available at a lower cost compared to biologics. While insurance varies for patients, the list price of Humira can run above $6,000 a dose. Amgen Inc.‘s Amjevita, a biosimilar to the inflammatory drug, can be purchased at either 55% or 5% below Humira’s list price.

The FDA action, however, might not immediately yield patient access to the cheaper medicines without reforming other policies that seek to make biosimilars available upon approval, drug pricing experts say. Biosimilars often face hurdles before hitting the market, frequently due to patent litigation, agreements between drug companies to defer entry, and how they’re treated in health insurers’ prescription drug plans.

“Sustainability challenges for biosimilars is market reimbursement, but FDA can’t fix that,” said John Murphy III, president and CEO of the Association for Accessible Medicines.“We’re only going to reform and create a sustainable, affordable market if we make a lot of different policy changes.”

The FDA has so far approved 79 biosimilars since the agency’s first clearance of one in 2015. The products have generated $56.2 billion in savings and are often 40% lower than the biologic price, the Association for Accessible Medicines said in a report this year.

Still, the market share for biosimilars remains below 20%, while brand-name biologics account for 51% of total drug spending as of 2024, according to the FDA.

A spokesperson for the US Department of Health and Human Services said in an email that the FDA’s action on biosimilar development, which is part of President Donald Trump’s agenda to slash drug prices, aims to “expand competition, lower costs, and increase patient access to safe and effective treatments.”

Patent Issues, PBMs

The FDA’s latest proposal seeks to end a requirement for “comparative efficacy studies” used in biosimilar applications to demonstrate they’re similar in safety and effectiveness to the original drug.

The agency also plans to eliminate the “switching study” that shows a biosimilar is interchangeable with a biologic—meaning it can be swapped out as a substitute for the original drug at the pharmacy counter without a doctor’s prior approval.

While these efforts could expedite biosimilar approval times, patent disputes could still delay patient access.

Studies indicate the US patent system allows biologic drugmakers to use “patent thickets” to delay market entry of biosimilars. Thickets can be formed by companies obtaining new patents for minor variations of a drug, such as new formulations, to extend the market exclusivity of the original patent on a drug to crowd out competitors.

“Pay-for-delay” agreements, in which brand-name drugmakers make deals with biosimilar competitors involving payments to delay market entry of cheaper rivals, are also a factor.

“We’ve seen a very limited number of biosimilars coming to market at any time unlike in the generic pharmaceutical space where you see multiple generics entering the market,” said Chad Landmon, chair of Polsinelli’s Hatch-Waxman & Biologics Practice. “You’re getting staggered entry dates for biosimilars.”

Biosimilars also face challenges in prescription drug plans as pharmacy benefit managers—middlemen that manage health plans—can influence their adoption through formulary designs.

A prime example was the rollout of biosimilars in 2023 for Humira, where formularies still provided greater access to the original drug and not cheaper biosimilars.

“There’s a very clear problem with PBM interference in the market,” Murphy said. “A lot of that has to do with rebate games.”

Additionally, a 2024 study in JAMA Health Forum found that the introduction of biosimilar competition didn’t systematically lower patient out-of-pocket spending on biologics, suggesting the need for policy interventions to ensure that savings from biosimilar competition improves affordability.

The FDA’s action is a “step in the right direction, but it should be followed by policies that change how prescription drug plans are, specifically pharmacy benefit managers and how their financial structure and their compensation models are structured,” said Mariana Socal, an associate professor at Johns Hopkins Bloomberg School of Public Health.

“All of these proposed policies sound disconnected from the issue of biosimilar adoption, but it’s really important that they be implemented so that indirectly they will also help with biosimilar adoption,” she said.

The Pharmaceutical Care Management Association, the industry group representing PBMs, said this year that drug companies engage in anti-competitive practices and abuses of the patent system to hinder biosimilars from coming to the market.

The middlemen said they are offering a program to plan sponsors with select Humira biosimilars available for $0 out-of-pocket through a manufacturer copay assistance program and ensuring patients have access to biosimilars through their placement on formularies.

More Competition

Still, the FDA moving to bring more lower-cost alternative medicines to the market stands to increase competition and eventually lower drug prices, biosimilar experts say.

“We’re looking at quicker approvals, and when you have more products on the market, then that intrinsically brings down the price of these drugs,” said Sara Koblitz, a director at Hyman, Phelps & McNamara PC, focusing on patent and exclusivity of biosimilars.

The FDA’s effort to advance interchangeability of biosimilars also stands to drive down prices, but proposed legislation from Congress would officially help do that, others say.

“Regulations can change from administration and administration,” Murphy said. “If you get a law passed and you get the interchangeability designation codified, then you have that certainty for a long period of time.”