FDA Modernizes Biosimilar Approval to Cut Costs and Speed Access

The US FDA has released new draft guidance aimed at modernizing and accelerating the development of biosimilar drugs—lower-cost biologic alternatives designed to treat chronic and serious diseases such as cancer, autoimmune disorders, and dermatologic inflammatory conditions. The proposed framework seeks to remove what the administration deemed to be outdated regulatory barriers, simplify evidentiary requirements, and increase patient access to affordable biologic therapies.¹

The Clinical and Economic Context

Biologic drugs have transformed the treatment landscape for numerous immune-mediated skin conditions, including psoriasis, atopic dermatitis, and hidradenitis suppurativa. However, their high cost continues to impose substantial burdens on both patients and health care systems.² Although biologics constitute only about 5% of US prescriptions, they account for over half (51%) of total drug spending as of 2024. Annual treatment costs can range from tens of thousands to several hundred thousand dollars per patient, often leading to treatment discontinuation or dose rationing.³

The administrative body stated consequences of these affordability barriers are clinically significant. Patients unable to afford biologics face increased risk of disease progression, hospitalization, and diminished quality of life. Insurance coverage gaps and high deductibles exacerbate these challenges, while Medicare and Medicaid also experience cost pressures from high biologic spending.

Despite their demonstrated safety and efficacy, FDA-approved biosimilars currently represent less than 20% of the US biologics market. Since the approval of the first biosimilar (Zarxio; Sandoz) in 2015—24 years after its reference product Neupogen—only 76 biosimilars have been approved by the FDA, compared with more than 30,000 approved generics. In contrast, the European Medicines Agency (EMA) has approved over 110 biosimilars, reflecting the US’s slower adoption rate.³

Barriers to Biosimilar Market Growth

Multiple factors have limited biosimilar market expansion in the United States. High development costs, estimated at $24 million per biosimilar due largely to comparative efficacy trials, and uncertain market returns deter investment. Additionally, persistent misconceptions among clinicians and patients about biosimilar equivalence contribute to provider hesitancy and low adoption rates.

Only 10% of biologics expected to lose patent protection within the next decade currently have biosimilars in development, and 27% of biologics with annual sales exceeding $500 million lack any biosimilar program despite clear commercial and patient need.³

Key Components of the FDA’s New Draft Guidance

The FDA’s draft guidance, “Scientific Considerations in Demonstrating Biosimilarity to a Reference Product: Updated Recommendations for Assessing the Need for Comparative Efficacy Studies,” represents a data-driven effort to modernize the biosimilar approval process.⁴

1. Elimination of Unnecessary Clinical Trials:
The FDA’s review of accumulated data since 2015 suggests that traditional comparative efficacy trials often provide limited additional insight beyond advanced analytical and functional assays. As a result, the agency now recommends reliance on analytical testing for demonstrating biosimilarity when appropriate, reducing the need for human clinical studies that add cost and delay without improving safety assurance.

2. Simplified Interchangeability Pathway:
To promote pharmacy-level substitution, the FDA no longer generally recommends “switching studies” for biosimilars seeking interchangeability status. This policy brings biosimilar regulation closer to the generic drug model, allowing pharmacists to substitute interchangeable biosimilars without additional prescriber intervention, pending state pharmacy laws.

3. Streamlined Regulatory Framework:
The agency plans to reduce procedural “red tape,” providing clearer guidance and predictable timelines to encourage new biosimilar entrants. This modernization effort is expected to lower development barriers, attract investment, and increase competition among manufacturers.

Economic and Clinical Impact

Since 2015, biosimilars have generated an estimated $56 billion in US health care savings, including $20 billion in 2024 alone. On average, biosimilars launch at prices approximately 50% lower than their reference biologics, delivering immediate cost relief to patients and payers. As biosimilar availability expands, these savings are projected to grow, with potential to substantially reduce the nation’s biologic drug expenditures.

For dermatologists, increased biosimilar availability may enhance treatment accessibility for patients who previously could not afford biologic therapy. Reduced cost barriers could also improve adherence and long-term disease control. Clinicians should remain vigilant, however, in monitoring post-marketing safety data and educating patients about biosimilar equivalence to combat lingering misconceptions.

Conclusion

The FDA’s proposed biosimilar reform represents a major step toward improving patient access to affordable biologic therapies. By eliminating unnecessary clinical studies, facilitating interchangeability, and clarifying approval requirements, the agency aims to foster competition and drive down costs without compromising safety or effectiveness.

For dermatologists and other specialists who prescribe biologic therapies, these regulatory changes may expand therapeutic options, reduce financial barriers, and improve continuity of care for patients with chronic and immune-mediated skin diseases.

References

1. FDA moves to accelerate biosimilar development and lower drug costs. News release. US FDA. Published October 29, 2025. Accessed October 30, 2025. https://www.fda.gov/news-events/press-announcements/fda-moves-accelerate-biosimilar-development-and-lower-drug-costs

2. Leeolou MC, Jia JL, Sarin KY. Biosimilars in dermatology: New opportunities and obstacles. JAAD Int. 2025;21:32-33. Published 2025 May 29. doi:10.1016/j.jdin.2025.05.003

3. FACT SHEET: Bringing lower-cost biosimilar drugs to American patients. News release. US FDA. Accessed October 30, 2025. https://www.fda.gov/media/189382/download?attachment

4. Scientific considerations in demonstrating biosimilarity to a reference product: Updated recommendations for assessing the need for comparative efficacy studies. Draft Guidence. US FDA. Accessed October 30, 2025. https://www.fda.gov/media/189366/download