FDA's Latest Move Could Pave the Way for Cheaper Complex Medicines

The Food and Drug Administration (FDA) may be easing requirements for future drug applications which could make some of the costliest medicines less expensive. Until now, companies developing copycat versions of complex biologic drugs had to run patient trials before filing for approval, a process that can take years and cost hundreds of millions of dollars. For the first time, the agency will allow a company to file without those patient results, relying instead on lab comparisons to show the drug works the same way, according to Sarfaraz Niazi, a scientist and biopharmaceutical consultant preparing an application for a version of a psoriasis treatment Stelara.

"This is a victory for science, for reason, and most importantly, for patients who deserve affordable access to biological medicines," said Sarfaraz K. Niazi, an adjunct professor at the University of Illinois at Chicago, who submitted the application for the waiver. "The FDA's acceptance ushers in a new era where innovation is not held hostage by outdated testing requirements. It will fundamentally reshape the economics of biosimilars and expand access globally."

Biosimilars saved the U.S. healthcare system $467 billion in 2024, according to the Association for Accessible Medicines’ annual report. Yet despite the savings, they remain a sliver of the market: biosimilars account for only about 2 percent of all prescriptions, compared to 90 percent of simpler traditional medicines that are filled with generics.

Drugmakers have fought back against cheaper versions of their brand-name complex medicines, through cutting deals with insurers to block biosimilars from drug lists or by requiring patients to “fail first” on the brand drug. Litigation and patent fights have also tied up access to these therapies. Despite the pushback, more than 70 biosimilars have been approved by the FDA, although fewer than 50 have launched in the U.S.

Adoption varies widely: on average, biosimilars capture about half the market within five years of launch, but while oncology biosimilars can exceed 80 percent, uptake in areas like insulin or autoimmune drugs often remains closer to 25 percent. The most widely used are treatments for breast cancer, colorectal cancer, and blood cancers, which together make up a large share of biosimilar sales.

Since the first biosimilar was approved in 2015, patient advocates, lawmakers, and drug developers have pushed for “interchangeability,” a designation that would let these medicines be prescribed and substituted more like traditional generics. Supporters say this would make lower-cost versions easier for patients to access once they’re on the market.

But before they even reach the market, the high cost of development has kept many companies from exploring the space. Eliminating the requirement for clinical trials for biosimilars could cut development costs by as much as 90 percent, according to Niazi. International regulators are already moving in this direction: the European Medicines Agency, for instance, generally allows companies to skip these trials when lab and pharmacology data show a biosimilar closely matches the original.

“This exemption lowers costs, shortens timelines, and allows biotech firms to pursue more ambitious strategies,” wrote biomanufacturing company Mabion in a post about the FDA waiver. “Smaller biotech firms, once constrained by the high costs of [clinical trials], now have greater opportunities to enter the biosimilar market and compete with established players.”