President Donald Trump’s top health advisers announced a push to cut health costs by bringing more cutting-edge generic drugs to market in a press conference on Wednesday.
The Food and Drug Administration (FDA) will eliminate bureaucratic hurdles that protect monopolies on biologics, which include many of the world’s priciest drugs, the agency announced.
Biologics, medications sourced from living organisms, represent breakthrough biotechnology, FDA Commissioner Marty Makary said. He added that the price tags can reach into the millions for a single course of the therapy and that patients without insurance or high deductibles experiencing sticker shock may never pick up prescriptions or ration doses.
The new actions are aimed at encouraging the development of biosimilars — generic versions of biologic drugs.
“In the pharmaceutical industry, we do not have competitive markets. We’re not allowed to talk about it. It’s a sacred cow,” said Makary.
Despite the wonkiness of the policy, the health chiefs cast the move as an issue relevant to the pocketbooks of everyday Americans.
“We’re replacing bureaucracy with science, we’re replacing monopolies with competition and we’re replacing despair with hope,” Kennedy said.
The high prices of these drugs can drive billions in costs to federal health programs, with biologic medications making up only 5% of prescriptions in the U.S. but 51% of total drug spending, according to HHS. In recent years, FDA approval of expensive biologics has triggered fears of ballooning Medicare and Medicaid spending into the billions on a single drug.
Centers for Medicare & Medicaid Services Administrator Mehmet Oz encouraged states to free up Medicaid money through the adoption of biosimilars.
The announcement comes amid a prolonged government shutdown over a debate about health affordability on Capitol Hill, where Republicans and Democrats are divided on granting Medicaid coverage for illegal immigrants and the extension of COVID-era health insurance subsidies.
“The fastest area of health care spending in the United States is drug spending. And the fastest area of drug spending increases is with this new class of medicines called biologics,” Makary said.
The FDA is introducing a new draft guidance aimed at giving pharmaceutical companies further clarity on what studies the agency requires for biosimilar drugs. It eliminates certain “comparative efficacy studies,” human clinical trials and “switching studies” that aren’t required for more traditional generic drugs, which Makary described as “red tape.” The agency will also classify more biosimilars as interchangeable with their brand-name counterparts, a technical tweak that HHS says will allow patients to more easily obtain cheaper generics at a pharmacy.
Makary did not directly answer a question asked by the Daily Caller News Foundation if the Trump administration would pursue anti-monopoly action via the Federal Trade Commission.
Kennedy attributed this “red tape” to anticompetitive lobbying by biologic makers.
The changes could significantly drop the costs of bringing a biosimilar to market, which typically costs $100 million to $300 million and takes six to nine years, according to the Biosimilars Forum, a lobby for biosimilar makers.
“Biosimilars can save an additional $181 billion in the next five years, including billions more in the Medicare program—only possible through commonsense policy changes like today’s,” said Biosimilars Forum Executive Director Juliana M. Reed in a statement.
European regulators approved twice as many biosimilar drugs as the FDA last year, HHS Secretary Robert F. Kennedy Jr. said. The U.S. has approved 76 biosimilars since the advent of the FDA pathway to approve them in 2015, while Makary estimates a truly competitive market would include 200 or 300.
Biosimilars can cost half as much as brand-name drugs, but have not gained a strong foothold, with a market share below 20%. Less than one-third of biologics with half a billion in sales have generic competitors in development, according to an HHS fact sheet.
Makary said that the makers of brand-name biologics can game pharmaceutical benefit managers into maintaining market dominance.
In a statement, the major lobby for brand-name pharmaceutical drug makers, the Pharmaceutical Research and Manufacturers Association (PhRMA), pointed the finger at the PBMs.
“The real problem in the biosimilars marketplace is that PBMs are excluding lower-cost generics and biosimilars from coverage – increasing medicine costs for Americans and killing competition,” said Alex Schriver, Senior Vice President of Public Affairs, PhRMA. “Policymakers must fix the misaligned incentives and business practices by middlemen who block biosimilars and profit off medicines at the expense of patients.”
Schriver said that there has been a 164% increase in biosimilars excluded from at least one major PBM formulary since 2022.
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