FDA Moves to Speed Biosimilar Development, Lower Prescription Drug Costs

If you or a loved one depends on expensive biologic medications for cancer, arthritis, or diabetes, relief could soon be on the way. In a step toward more affordable medications, the U.S. Food and Drug Administration (FDA) announced new measures to speed up and lower the cost of developing biosimilars, the lower-cost alternatives to brand-name biologic drugs.

Biosimilars work the same way as their original biologics but have traditionally faced long, expensive approval processes. The FDA’s new draft guidance, released October 29, 2025, streamlines that pathway by removing redundant clinical testing requirements and allowing developers to rely more on advanced analytical studies.

Cutting Costs Without Cutting Corners

Biologic medications represent a small fraction of prescriptions but continue to drive a disproportionate share of U.S. drug spending. They account for about 2% of prescriptions yet roughly 50% of total drug spending, according to the IQVIA Institute for Human Data Science and Centers for Medicare & Medicaid Services.

The U.S. Food and Drug Administration has approved more than 65 biosimilars as of early 2026. Despite this progress, biosimilars still make up a relatively modest share of the biologics market—generally less than 25% overall, although adoption varies widely. In some categories, including certain oncology and autoimmune therapies, biosimilars have achieved penetration rates exceeding 50%.

By contrast, the generic drug market is far more established. There are more than 30,000 approved generic drugs, and generics account for about 90% of all prescriptions filled in the United States, according to the Association for Accessible Medicines.

Looking ahead, the biosimilar development pipeline remains limited relative to the opportunity. Industry estimates suggest that only a small share—generally in the low teens—of biologic drugs expected to lose exclusivity over the next decade currently have biosimilars in development. High development costs, complex manufacturing, patent litigation, and market access challenges continue to slow broader competition.

Today’s announcement furthers President Trump’s directive to lower drug prices for the American people. Biologics treat many chronic diseases, but for too long, a burdensome approval process has kept patients from accessing more affordable biosimilars. — Health and Human Services Secretary Robert F. Kennedy Jr.

FDA Commissioner Dr. Marty Makary added that reducing unnecessary testing will make lifesaving treatments more affordable and accessible.

By streamlining the biosimilar development process and advancing interchangeability, we can achieve massive cost reductions for advanced treatments that millions of Americans depend on. — FDA Commissioner Dr. Marty Makary.

What the New Guidance Does

The new draft guidance—Scientific Considerations in Demonstrating Biosimilarity to a Reference Product—marks a shift in how the FDA evaluates biosimilar products.

Historically, many biosimilar developers conducted large comparative clinical studies to confirm no clinically meaningful differences from the reference biologic. These trials could take several years and cost tens of millions of dollars, contributing to slower development timelines and higher barriers to entry.

Under the updated draft guidance, the FDA emphasizes a “totality of evidence” approach, allowing developers to rely more heavily on advanced analytical testing, pharmacokinetic (PK), and pharmacodynamic (PD) data. In many cases, comparative clinical efficacy studies may no longer be necessary if existing scientific evidence is sufficient to demonstrate biosimilarity.

The agency also clarified its evolving position on “switching studies”—research designed to show that patients can safely alternate between a reference biologic and its biosimilar. The FDA now indicates that such studies are generally unnecessary, particularly given real-world evidence supporting the safety of switching in clinical practice.

These changes are intended to streamline development, reduce costs, and encourage competition, potentially accelerating patient access to more affordable biologic therapies. While biosimilars remain more complex than traditional generics, the updated framework moves the approval process closer to a science-driven, efficiency-focused model without compromising safety or effectiveness.

Why it Matters for Patients and Families

For patients living with cancer, autoimmune diseases, or diabetes, biologic drugs can cost thousands of dollars per dose. Wider adoption of biosimilars could mean significant savings for both families and the healthcare system.

Many of these conditions can lead to additional complications and the need for expensive long-term care. Lower drug costs can help.

Science continues to evolve, and the FDA remains committed to advancing common-sense policies that promote efficient and effective biosimilar development. — Dr. George Tidmarsh, Director of the FDA’s Center for Drug Evaluation and Research.

Lower-cost biosimilars can also reduce long-term financial strain, helping families preserve retirement savings or pay for other healthcare needs. As biologics continue to dominate treatment for chronic and age-related illnesses, affordability has become central to both public health and long-term care planning.

A Broader Push for Competition

The Biologics Price Competition and Innovation Act of 2010 (BPCIA) established the regulatory pathway for biosimilars in the United States, aiming to introduce competition to high-cost biologic therapies. More than a decade later, progress has been steady but uneven.

Despite a growing number of approvals, only a small share—generally in the low teens—of biologic drugs expected to lose patent protection over the next decade currently have biosimilars in development. Industry barriers, including high development costs, complex manufacturing, and ongoing patent litigation, continue to limit broader competition.

The U.S. Food and Drug Administration is seeking to address these challenges through updated scientific guidance designed to streamline development and reduce unnecessary clinical requirements. Regulators hope this approach will encourage more manufacturers to enter the biosimilar market.

Biologic medicines now account for more than $260 billion in annual U.S. spending, based on recent data from the IQVIA Institute for Human Data Science. As these costs continue to rise, expanding access to biosimilars is widely viewed by policymakers and industry experts as one of the most effective strategies for improving affordability and increasing competition in the years ahead.

Planning for the Future

High prescription drug costs can quietly erode your financial security, especially as you age and manage chronic conditions that require ongoing treatment. Biologic medications—while often life-changing—are among the most expensive therapies available, making them a growing factor in both healthcare and long-term care expenses.

Efforts by the U.S. Food and Drug Administration to expand competition in the biologic drug market could help slow rising costs over time. Greater access to biosimilars may improve affordability, but it does not eliminate the broader financial risks tied to aging, chronic illness, and the need for long-term care.

That’s why planning matters. Managing future healthcare costs isn’t just about prescriptions—it’s about preparing for the possibility that you may need help with daily activities, supervision, or extended care. Medicare and traditional health insurance do not cover most long-term care services, leaving many families exposed to significant out-of-pocket costs.

Frequently Asked Questions 

What are biosimilars, and how are they different from biologics?

Biosimilars are highly similar versions of brand-name biologic drugs. They are designed to work the same way and provide the same clinical benefits, but they are typically offered at a lower cost once the original biologic loses exclusivity.

Are biosimilars as safe and effective as original biologic drugs?

Yes. The U.S. Food and Drug Administration requires biosimilars to demonstrate no clinically meaningful differences in safety, purity, or effectiveness compared to the original biologic before approval.

Why are biologic drugs so expensive?

Biologic drugs are complex therapies made from living organisms. They require advanced manufacturing, specialized storage, and significant research and development investment, all of which contribute to their high cost.

How could the FDA’s new biosimilar guidance lower drug prices?

The FDA’s updated approach reduces the need for costly and time-consuming clinical trials when other scientific data can prove similarity. This lowers development costs, which may lead to more competition and lower prices over time.

Will biosimilars reduce my out-of-pocket healthcare costs?

They can help, but savings vary. Increased competition from biosimilars may lower prices, but your actual out-of-pocket costs depend on insurance coverage, formularies, and where you receive care.

What is the difference between biosimilars and generic drugs?

Generic drugs are exact chemical copies of brand-name medications, while biosimilars are highly similar—but not identical—versions of biologic drugs due to their complexity. Despite this difference, both aim to provide more affordable treatment options.

Does Medicare cover biologics or biosimilars?

Medicare may cover biologics and biosimilars under Part B or Part D, depending on how the drug is administered. However, coverage can vary, and out-of-pocket costs may still be significant depending on your plan.

Do lower drug costs eliminate the need for long-term care planning?

No. While lower drug costs can help reduce overall healthcare expenses, they do not address the cost of long-term care services such as help with bathing, dressing, or supervision—services typically not covered by Medicare or standard health insurance.

How do rising drug costs impact long-term care planning?

High drug costs can reduce savings available for future care needs. Chronic conditions treated with expensive medications often increase the likelihood of needing long-term care, making financial planning even more important.

What steps can you take now to prepare for future healthcare and long-term care costs?

You can:

• Review your current healthcare and prescription coverage
• Estimate future care costs using tools like the LTC News Cost of Care Calculator
• Explore options like Long-Term Care Insurance