Beyond the FDA, state laws and PBM practices remain key hurdles to broader substitution.
As the US biosimilar market continues to mature, policymakers and regulators are grappling with whether changes to the US Food and Drug Administration's (FDA) interchangeability standards can unlock greater competition and lower biological drug costs. A new analysis published in the American Journal of Managed Care concludes that while reforming these standards is a necessary first step, it is unlikely to be sufficient on its own to transform the biosimilar landscape.
The biosimilar promise and slow uptake
Biological drugs—complex products derived from living cells—account for only 2% of US prescriptions but nearly half of prescription drug spending. To address these costs, Congress established a biosimilar approval pathway through the Biologics Price Competition and Innovation Act (BPCIA) in 2009. Biosimilars are biologicals made by different manufacturers with no clinically meaningful differences from already-approved reference products.
Yet in the decade following the BPCIA's passage, the biosimilar marketplace has been marked by delayed approvals, slow uptake, modest spending reductions, and inconsistent patient savings. As of June 2026, the FDA has approved 97 biosimilars, of which 25 have received interchangeability designations [1].
The interchangeability debate
A key barrier to adoption has been the FDA's additional testing requirements for biosimilars to be deemed interchangeable—meaning they can be substituted for the reference product at the pharmacy level without prescriber intervention. Unlike generic drugs, where the FDA certifies therapeutic equivalence and state laws mandate automatic substitution, the BPCIA established stricter standards for biosimilars.
However, the regulatory landscape is shifting. In June 2024, the FDA released updated draft guidance eliminating the expectation for switching studies—clinical trials that required patients to alternate between a biosimilar and its reference product [2]. The agency cited a meta-analysis by FDA scientists showing no differences in safety or immunogenicity among patients who switched from a reference biological to a biosimilar [3]. These findings aligned with extensive postmarketing analyses from the European Union, where regulators have not maintained a two-tier system.
Some policymakers have since proposed that Congress eliminate the separate interchangeability designation entirely—a policy included in the Biden administration's fiscal year 2024-2025 budget and publicly supported by FDA leaders.
Beyond FDA standards
Even if Congress were to remove the interchangeability designation, the analysis warns that significant obstacles would remain [4].
State pharmacy substitution laws, which govern whether pharmacists can automatically substitute biosimilars, are often more restrictive for biosimilars than for generics. Many states require physician notification when a biosimilar is dispensed. Moreover, the FDA does not certify interchangeability between two biosimilars of the same reference drug, creating uncertainty about whether state laws permit substitution across multiple biosimilar versions [5].
Pharmacy benefit manager (PBM) reimbursement practices pose another hurdle [6]. While generic drug reimbursement incentivizes pharmacies to dispense the lowest-cost version, PBMs have treated biologicals and biosimilars separately—negotiating rebates and formulary positions with each manufacturer. This dynamic was evident when several adalimumab (Humira) biosimilars entered the market in 2023, yet the brand-name product continued to account for more than 98% of prescriptions, likely due to substantial rebates offered by the manufacturer.
Patient and prescriber confidence also remains a concern. Although regulators have found no safety or effectiveness risks from switching between biologicals and biosimilars, surveys show varying degrees of prescriber confidence. Similar scepticism existed in the early days of generic drugs—as late as 2009, 23% of physicians doubted generic drug effectiveness and 50% had quality concerns.
The path forward
The authors conclude that changing FDA interchangeability standards is necessary to improve biosimilar dissemination, but additional policies are needed. These include amending state laws to allow greater pharmacist substitution, addressing PBM practices that inhibit competition, implementing educational campaigns for clinicians and patients, and potentially expanding Medicare's price negotiation authority to cover biologicals with or without biosimilar competition.
‘As regulators and policymakers consider the future of biosimilar policy, a comprehensive approach—one that addresses regulatory, legal, reimbursement,
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References
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2. GaBI Online - Generics and Biosimilars Initiative. FDA interchangeable biosimilars guidance update on revised approach to switching studies [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2026 Aug 4]. Available from: www.gabionline.net/guidelines/fda-interchangeable-biosimilars-guidance-update-on-revised-approach-to-switching-studies
3. Schrieber S. Switches between biosimilars and their reference products. Generics and Biosimilars Initiative Journal (GaBI Journal). 2023;12(3):106. doi:10.5639/gabij.2023.1203.016
4. Reilly MS, McKibbin RD. Misinformation about interchangeable biosimilars undermines US health policy, physician confidence, and patient health. Generics and Biosimilars Initiative Journal (GaBI Journal). 2024;13(2):55-60. doi:10.5639/gabij.2024.1302.009
5. GaBI Online - Generics and Biosimilars Initiative. Are interchangeable biosimilars at risk? [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2026 Aug 4]. Available from: www.gabionline.net/biosimilars/research/are-interchangeable-biosimilars-at-risk
6. GaBI Online - Generics and Biosimilars Initiative. FTC reveals extent of PBM drug mark-ups and profits [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2026 Aug 4]. Available from: www.gabionline.net/reports/ftc-reveals-extent-of-pbm-drug-mark-ups-and-profits
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