According to the FTC, FDA guidelines for biosimilars would increase competition and lead to lower prices

The Federal Trade Commission supports a draft guideline from the US FDA that is intended to facilitate the market launch of biosimilars – generic versions of expensive biological drugs.

The guidelines would change current policy, which requires Company must submit clinical switchover studies to demonstrate that a biosimilar is interchangeable with the reference medicine. Instead, a biosimilar applicant could make a statement that the biosimilar is interchangeable based on data in the biologic's original marketing application.

“If implemented, the guidelines would likely lower barriers to entry and facilitate competition among biological products by increasing the number of biosimilars that are considered interchangeable,” the FTC said in a statement.

Biologic drugs such as monoclonal antibodies are among the most expensive medications and are often used to treat diseases such as cancer and rare diseases. They can easily cost hundreds of thousands of dollars per year.

Biologics have a twelve-year exclusivity (without additional patent protection) that protects them from potential competition. For conventional small molecule drugs, the exclusivity is only five years.

According to the Biosimilar Council, it currently costs $100 million to $300 million to bring a biosimilar to market. In a May 2024 report, the group wrote that U.S. consumers and the healthcare system have been saved about $24 billion under the accelerated approval process since the first biosimilar was approved in 2015 (58 have been approved so far).

A January 2023 IQVIA report predicts cumulative biosimilar sales of $129 billion over the next five years and found that biologics will account for 46% of all drug spending.

Among the pharmaceutical and biotech companies that could be most affected by biosimilars is Pfizer (NYSE:PFE), Merck (NYSE: MRK), Johnson & Johnson (NYSE: JNJ), Bristol-Myers Squibb (BMY), Eli Lilly (LLY), Novartis (NVS), Roche (OTCQX:RHHBY), AstraZeneca (AZN), AbbVie (NYSE:ABBV), Amgen (AMGN), Regeneron Pharmaceuticals (REGN) and Gilead Sciences (GILD).

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