2026 could mark a turning point for biosimilar adoption in the US. By scrapping requirements for redundant clinical trials and pushing Congress to end the “Interchangeable” label, the FDA has cleared the runway for biosimilars. However, with PBM “rebate walls” and patent thickets still standing, will these lower cost therapies finally take off in the world’s biggest market?
Biosimilars – lower-cost equivalents of expensive biologic medicines – can help massively reduce healthcare costs. These products launch at prices between 30 and 50 percent lower than their brand-name references and have saved the US healthcare system approximately USD 56.2 billion since the first FDA approval in 2015.
However, there is scope for far greater impact. While in publicly funded European healthcare systems, where once a biosimilar wins a tender, there is immediate and near-total switching (up to 90 percent of volume for certain molecules); the US is far more fragmented.
This creates extra demands on sponsor companies, as Thomas Nusbickel, chief commercial officer at Korean firm Celltrion, explains. “Unlike Europe, where winning a tender essentially guarantees business, the US market demands continuous pull-through and account-level engagement, making it both more challenging and more expensive.”
In the States, pharmacy benefit managers (PBMs) often receive larger rebates from brand-name manufacturers than their biosimilar counterparts, leading them to keep the more expensive drugs on their formularies. “Formularies too often prioritise products with the largest rebates rather than the lowest prices… biosimilars priced 80 percent lower… can spend their first year on the market halted by PBM practices,” laments John Murphy of generics and biosimilar industry group Association for Accessible Medicines (AAM).
“Generic and biosimilar entry too often becomes a negotiating tool for PBMs to extract deeper rebates from the branded product rather than an opportunity to support products that meaningfully lower costs,” adds Spiro Gavaris, president of Indian giant Lupin’s US generics business. “As a result, we see markets with high value and high rebate potential where generic and biosimilar penetration remains only 20 to 40 percent.”
The pharma companies themselves are not blameless, with brand-name biologics frequently protected by “thickets” of over 100 secondary patents, covering everything from manufacturing to dosing and minor formulation tweaks. This can delay biosimilar entry for years and is particularly severe in the US. An extensive review of patent thickets conducted by Fresenius Kabi’s Rachel Goode showed that litigation against the same 30 biosimilars involved 377 patents in the US versus just 24 in the UK and 46 in Canada. This led to a 34-month average wait between regulatory approval and market launch for biosimilars in the US, compared to between four and seven months in other markets.
Then there is the thorny issue of legal definitions: the US has long had a two-tiered system of “biosimilars” and “interchangeables,” leading many doctors and patients to believe that standard biosimilars are of lower quality than originator drugs or unsafe to switch to.
Finally, in recent times, the Inflation Reduction Act has allowed Medicare to negotiate prices on biologics after 13 years. Biosimilar makers argue that enacting government-mandated “Maximum Fair Prices” on branded drugs before biosimilar launches removes the financial incentive for developing biosimilars.
All of these factors have led to a lack of investment in this crucial and cost-saving field and what the AAM’s Murphy calls a biosimilar “void.” He points out that 90 percent of biologics losing exclusivity in the next decade still have no biosimilar in the pipeline.
While the US FDA has greenlit more biosimilars in recent years (90 approvals as of 2026), it only approved its first biosimilar in 2015 (compared to 2006 in Europe) and still lags well behind the European Medicines Agency (120 approvals as of 2026).
How can the FDA help break this deadlock, get more biosimilars to patients in the US, and ultimately ease the financial burden on both individuals and the system?
Speaking exclusively to PharmaBoardroom, the FDA’s biosimilars lead Sarah Yim explains that, significantly, the regulator is reducing the need for large comparative efficacy studies which she suggests “provide minimal information.”
AAM’s Murphy adds that these studies are “blunt tools” that add high cost and time but little scientific value. He suggests that removing them could reduce development costs by tens of millions of dollars per product and shorten market entry timelines by more than a year.
Yim also notes that her organisation is also pushing for legislative changes to erase the aforementioned distinction between “biosimilar” and “interchangeable.”
Additionally, the FDA is hoping to bridge the biosimilar void and stimulate investment in all biosimilars, not just equivalents of branded products that generate over a billion dollars in sales. “My goal is to make regulatory expectations so efficient that developers are willing to pursue biosimilars for non-blockbuster biologics,” adds Yim.
Industry reaction has been cautiously positive thus far. “We are seeing some positive movement on biosimilars, with regulatory pathways becoming clearer and interchangeability improving,” notes Lupin’s Gavaris.
“Lowering barriers to entry, whether through streamlined study requirements or more supportive substitution policies, broadens the range of products that are economically viable to develop. Combined with reducing payer-side obstacles, this will encourage more manufacturers to invest in bringing lower-cost alternatives to market.”
“The opportunity before us is significant – and with the right choices, this can be a year in which policymakers help America’s patients thrive, strengthening the future of affordable medicines for all,” concludes Murphy.
