Lawmakers are renewing a push to strip away a regulatory hurdle that keeps prices high for biologic drugs—treatments for autoimmune diseases, diabetes, cancer, and other chronic conditions. The Biosimilar Red Tape Elimination Act would remove the separate “interchangeability” designation that manufacturers must meet before pharmacists can substitute a cheaper biosimilar for a brand-name biologic. Supporters argue the requirement adds time and cost without improving patient safety, and that eliminating it could unlock billions in savings.
Biologics are complex medicines derived from living organisms, making them more expensive to produce and administer than traditional chemical drugs. Insulin is a prime example—a life-sustaining biologic with no chemical substitute. When patents expire, manufacturers can create biosimilars, which are nearly identical copies. But unlike generic chemical drugs, which face a single approval standard, the 2010 Biologics Price Competition and Innovation Act created two tiers: one for biosimilars and a higher bar for interchangeability.
That higher bar requires manufacturers to conduct additional switching studies to prove that alternating between the biologic and biosimilar produces no different clinical outcomes. Many states then use that designation as a gatekeeper, preventing pharmacists from automatically substituting a biosimilar unless it has been deemed interchangeable. The extra evidence is so costly that many manufacturers skip it, leaving too few interchangeable products on the market and blunting competition.
“The interchangeability standard is a solution in search of a problem,” said Jeremy Nighohossian, a senior fellow and economist at the Competitive Enterprise Institute. He points out that no cases have emerged showing the additional scrutiny is medically necessary, and other countries do not impose such a requirement. The FDA itself has concluded the standard is unnecessary—in 2024, it proposed relaxing the rules, citing a systematic review that found no differences in mortality or serious side effects between interchangeable and non-interchangeable biosimilars.
But the FDA’s administrative shift is not enough, advocates argue. A legislative fix would prevent future administrations from reimposing stricter rules and would relieve manufacturers of a pointless legal burden. The bill has bipartisan support and passed the Senate Health, Education, Labor, and Pensions Committee unanimously. It was introduced in the House by Reps. August Pfluger (R-Texas) and Greg Landsman (D-Ohio).
The urgency is economic as well as medical. 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. As lawmakers weigh broader climate liability rules and other policy fights, this measure offers a rare chance for quick, tangible savings.
Supporters also note that removing the interchangeability label would lower premiums and co-pays for patients and taxpayers alike. With the clock ticking on patent expiries, they urge Congress to act soon—perhaps in the lame-duck session—to turn regulatory relief into real-world price drops.
