The fastest growing share of healthcare spending is on prescription drugs. Leading the way is an expensive class of drugs called biologics, which typically cost up to $200,000 annually. There are “generic” versions of these drugs, called biosimilars, that have the potential to save Americans billions of dollars, but their use is hampered by unnecessary bureaucratic hurdles. We are taking action to fix this broken system to lower drug prices for Americans.
Barriers to biosimilars were originally raised by Congress, but the FDA has historically gone one step further by taking an overly cautious approach. For example, the FDA requires biosimilar developers to conduct comparative clinical trials – something the FDA does not require for other generic drugs. To date, these studies have been largely useless compared to more efficient ways of evaluating interchangeability. Since these studies take years and cost an average of $24 million, removing the requirement is a sensible way to get more biosimilars to market.
Since the first approval of a biosimilar in 2015, it has been difficult for patients to access it. When a doctor prescribes an expensive biologic drug, substitution with a biosimilar is not routine, as with any other brand name drug and their generic equivalent. This perverse system is fueled by pharmaceutical companies, pharmacy benefit managers, and reimbursement policies that encourage physicians to use more expensive medications.
Now the FDA is taking a strong position to make it easier to replace biosimilars with expensive biologics. We are also announcing a radical streamlining for biosimilars and a new policy to dramatically reduce the time and cost of bringing these cheaper biosimilars to market.
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Scientists have discovered more than 70 biosimilars, but that compares to more than 30,000 generics. (iStock)
The chances are high. To date, only 77 biosimilars have been approved in the US, meaning that only a small fraction of approved biologics have a ‘generic’ equivalent. By comparison, there are more than 30,000 generic drugs approved – more than the total number of brand-name drugs on the market. As of 2024, approximately 90% of all non-biologic prescriptions filled in the US will be for generic drugs.
When we started our work about seven months ago, we realized how dire the situation had become for biosimilar developers. Biologicals account for 51% of drug spending in the US, but only 10% of biologics losing patent protection over the next decade have a biosimilar in development. We must abolish overly burdensome requirements to enable more biosimilar development.
Currently, it takes six to eight years for a biosimilar to reach the market, a delay that allows biologic drug makers to continue charging high prices for years. The bureaucratic process also limits the total number of biosimilars that come to market. And prices typically remain high when there are only one or two biosimilars competing with a biologic — a practice that benefits all parties involved. We need to reduce red tape and delays to enable more competition.
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Our reform addresses a fundamental problem in healthcare today: uncompetitive markets that have contributed to decades of healthcare inflation. These dysfunctional markets have resulted in an affordability crisis that is plaguing all insurance programs.
According to a report published in September by the Association of Available Medicines, biosimilars will save Americans $20 billion by 2024 alone. Our reforms will further increase annual savings and save billions for the Medicare program. For biosimilar developers, avoiding additional clinical trials could reduce their overall development costs by 25% to 30%.
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Some pharmaceutical industry advocates will argue against this regulatory streamlining. But the Trump administration is fighting for everyday Americans. We have proven through our Most Favored Nation price reform that we can generate the support and support necessary to achieve the results Americans want without stifling innovation. In fact, the President is demanding that our nation’s regulatory process protect innovation by incentivizing the best solutions at an affordable price for our people.
We also prioritize FDA review of life-changing medications and work together as a team to coordinate prompt reimbursement from the Centers for Medicare & Medicaid Services.
Currently, it takes six to eight years for a biosimilar to reach the market, a delay that allows biologic drug makers to continue charging high prices for years.
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Politicians can keep throwing good money after bad at a broken system while talking about reform. Secretary of Health and Human Services Robert F. Kennedy Jr. has created a Make America Healthy Again agenda to talk about under-appreciated but critically important issues, such as drug appropriateness. Ultimately, the best way to lower drug prices is to stop using drugs we don’t need.
We choose now to enact meaningful reforms that will deliver fair health care prices for a generation. Generic medications have saved Americans trillions of dollars over the years, making important medical treatments affordable and within reach for many. Let’s do the same with biosimilars.
