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The US FDA has released the revised draft of its biosimilar guidance, with the objective of reducing the cost of developing and filing biosimilars in the US. Currently, we estimate the biosimilar development costs at USD 80–120mn, which has limited the number of participants in the market. And, in our view, the proposed measures across the Oct-25 and Mar-26 drafts could reduce development costs by USD 40–45mn, though companies would still likely require USD 50mn to bring a biosimilar to market. In addition to R&D and regulatory expenses, developers must invest in advanced biologics manufacturing facilities, quality systems and analytical capabilities. These capital requirements create high entry barriers and limit participation primarily to well-capitalised companies. While the guidance aims to increase competition and lower drug prices for companies such as Biocon, the residual development cost suggests that new entrants may remain limited. Consequently, structural barriers in the biosims market are likely to persist despite regulatory efforts to streamline development.

* To bring cost efficiencies in developing and filing biosims in the US: This is the revised draft version of the biosimilar guidance released by the US FDA. The previous draft guidance was issued in October 2025. The primary objective of these two sets of guidance is to reduce the overall cost of developing and filing biosimilars in the US.

* What has changed: The Oct-25 draft reduced the need for expensive comparative efficacy trials. The Mar-26 revision has made US biosim development more open to sponsors using clinical data generated against a non-US comparator. That is if they can scientifically justify its relevance to the US-licensed reference product without needing an additional three-way PK study involving the proposed biosimilar. Put together, the Oct-25 guidance removes a major late-stage clinical requirement, and the March revision removes part of the bridging and duplication burden, which is why the two guidances together are being viewed as meaningful cost-reduction steps in US biosimilar development.

* Respite of ~50% on development costs: Currently, the cost of developing and filing a biosimilar in the US, in our estimation, is in the range of USD 80–120mn. Through the guidance outlined in the Oct-25 and Mar-26 drafts, the FDA is proposing measures that could potentially reduce development costs by USD 40–45mn in our view. However, even after these reductions, companies would still need to spend roughly USD 50mn to bring a biosimilar to market.

* Capital requirements for infrastructural capabilities create high entry barriers: In addition to R&D and regulatory filing expenses, companies must also invest in high-cost biologics manufacturing infrastructure, including advanced manufacturing facilities, quality systems and analytical capabilities. These capital requirements create a significant barrier to entry for many potential developers.

* High development costs still limit entry of new players: While the FDA intends to promote competition in the biosimilars market and lower drug prices, the high residual cost of development means that entry will likely remain limited to a small number of well-capitalised players

* Structural barriers will remain significant despite the FDA’s efforts to streamline development: For companies such as Biocon, which have already made substantial investments in biosimilar development and manufacturing, increased competition over the medium term could put pressure on margins and market share. However, at present, only a limited number of companies are successfully commercialising multiple biosimilars in the US, suggesting structural barriers to entry remain significant despite the FDA’s efforts to streamline development.

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