FDA is working to speed up generic drug approvals as Trump targets drug costs

The Food and Drug Administration said Wednesday it will take steps to speed up the development of generic versions of complex biologic drugs, in an effort to increase cheaper competition for more expensive drugs and lower drug costs for Americans.

It’s the latest move by the Trump administration to rein in soaring prescription drug costs in the United States, where drug prices are two to three times higher than in other developed countries.

The move to support the development and approval of so-called biosimilars could be a blow to pharmaceutical companies, whose most profitable products are often biologics that treat serious and chronic diseases. The exact effect depends on the drug manufacturer and its products.

The FDA’s new reforms “will take a time frame of five to eight years to bring a biosimilar to market and cut it in half,” agency Commissioner Marty McCurry said during a news conference on Wednesday.

During the event, Health and Human Services Secretary Robert F. Kennedy Jr. said the FDA has an “outdated and cumbersome approval process that has slowed the entry of biosimilars.” He said: Until when? [the drugs] “If approved, current laws often prevent pharmacists or patients from substituting for patients who might benefit from a less expensive option.”

“All of this ends today, and the FDA is taking bold and decisive action to break down these barriers and open markets to real competition,” Kennedy said.

Biological products are engineered using living cells, making them more complex to manufacture than chemically derived drugs. Biologics have a special path to FDA approval, and it is difficult for generic drug manufacturers to sell cheaper versions due to high development costs and a difficult regulatory landscape.

Biologics make up just 5% of prescriptions in the United States, but account for 51% of total drug spending as of 2024, according to a statement from the Food and Drug Administration. The agency added that FDA-approved biosimilars are as safe and effective as their branded counterparts, yet their market share remains less than 20%. The US Food and Drug Administration said it has so far approved 76 biologics, which constitute only a small portion of approved biologics.

On average, biosimilars cost half the price of their branded counterparts, Kennedy said. Their entry into the market is bringing down the prices of branded drugs by another 25%, which is a “real relief for patients”, he added.

The US Food and Drug Administration said biosimilars saved $20 billion in health care costs in the United States last year alone.

In new draft guidance, the FDA proposed major updates to streamline biosimilar studies. For example, the agency recommended that human studies that directly compare a biosimilar to a branded product may not be necessary for pharmaceutical companies to conduct. This research takes years and costs tens of millions of dollars.

Biosimilars have historically struggled to gain market share from their branded counterparts compared to generic versions of small-molecule drugs, which are often delivered in pill form and can easily enter cells because they have a low molecular weight.

The difference is that many biosimilars are not identical copies of brand-name biologics, while generics are.

In many cases, pharmacists cannot directly substitute brand-name biologics for biosimilars when filling a prescription unless they are labeled “interchangeable” and permitted by state law.

But the Food and Drug Administration said Wednesday that it generally recommends against requiring so-called “switch-off” studies, which determine whether biosimilars carry that designation. This step is not required for generic versions of small molecule drugs.

“These additional studies could slow development and create public confusion about the safety of biosimilars,” the FDA said in a statement.