Lawmakers are renewing a push to scrap a regulatory hurdle that keeps prices high for biologic drugs—treatments for autoimmune diseases, diabetes, cancer, and other chronic conditions. The bipartisan Biosimilar Red Tape Elimination Act, which cleared the Senate Health, Education, Labor and Pensions Committee unanimously, would eliminate the separate “interchangeability” designation that manufacturers must meet before pharmacists can substitute a cheaper biosimilar for a brand-name biologic.
Biologics are complex medicines derived from living organisms, unlike traditional chemical drugs. Insulin, for example, is a biologic that diabetics rely on to regulate glucose. Because of their complexity, biosimilars—the generic equivalents—are harder to produce, but they offer the same clinical benefits at a fraction of the cost. The 2010 Biologics Price Competition and Innovation Act created a pathway for biosimilars but added an extra layer: manufacturers must prove not only that their product is “highly similar” to the original, but also that switching between the two produces no different results. That higher bar has proved costly and time-consuming, deterring many companies from seeking interchangeability status.
As a result, too few biosimilars are deemed interchangeable, and many state laws require that designation before pharmacists can substitute the cheaper version. Patients and taxpayers lose out, paying higher premiums and co-pays when a nearly identical drug could be used. The FDA itself has concluded the extra standard is unnecessary. In 2024, the agency proposed relaxing the requirements, allowing manufacturers to rely on structural analysis and sophisticated tests instead of lengthy switching studies. A systematic FDA review found no differences in mortality or serious side effects between biosimilars and their reference products.
But agency guidance can change with each administration. “We need a legislative fix so that future regulators can’t reimpose a pointless standard,” said Jeremy Nighohossian, a senior fellow and economist at the Competitive Enterprise Institute. The bill, introduced in the House by Reps. August Pfluger (R-Texas) and Greg Landsman (D-Ohio), would eliminate interchangeability as a separate classification, aligning the U.S. with other countries that do not impose such a requirement.
The stakes are significant. Between 2025 and 2034, an estimated 118 biologics will lose patent protection, and increased biosimilar competition could save the U.S. health care system $189 billion. “Every month of delay costs Americans money,” Nighohossian said. “Congress can act now and spark competition that lowers drug prices for everyone.”
Supporters note that the bill has broad bipartisan backing, a rarity in a divided Congress. They argue that removing this red tape is a common-sense step that does not compromise safety. “We’re not cutting corners on patient protection,” said a Senate aide familiar with the negotiations. “We’re removing a redundant requirement that has no proven benefit.”
The legislation is expected to be taken up after the November elections. Meanwhile, patient advocacy groups are urging lawmakers to prioritize the measure, pointing to the rising cost of biologic treatments and the burden on families and the federal budget. As one analyst put it, “This is one of those rare policy fixes that saves money and improves access without costing the government a dime.”
