New FDA rules on biosimilars will require accelerated strategic adaptation
By Anders Månsson, Senior Advisor at Ventures Accelerated
Sept 15, 2025
Anders Månsson — Photo by Millianne Jabol
FDA’s recent move to waive requirements for clinical efficacy studies (CESs) to approve of monoclonal antibody biosimilars certainly redefines the regulatory landscape for biologic drugs. This decision opens the door to new strategies and players in the biosimilars sector. The impact of FDA’s new approval policy is thus potentially very significant, promising lower development costs, faster patient access, and certainly enhanced competition, particularly benefiting generic and biotech firms.
For decades, CESs have been mandatory in the US for the approval of biosimilars. These studies, while valuable in initial biologic approvals, have become increasingly redundant for biosimilars once analytical similarity and PK studies confirm equivalence to the originator. Europe and the UK have already moved towards case-by-case waivers, citing robust post-market safety records and the lack of any biosimilar with proven analytical similarity ever failing a CES.
FDA’s shift is founded on large-scale scientific reviews (over 600 comparative biosimilar studies), showing that clinical efficacy outcomes consistently mirror robust analytical and PK data. The FDA thus concluded that demanding large-scale CESs, which often duplicate known clinical effects, no longer serves scientific or patient interests. Instead, biotech firms are now required to produce precise analytical characterization and PK/PD equivalence, streamlining the regulatory process to resemble small-molecule generic pathways.
The impact of the decision has the potential to substantially change market dynamics. CESs typically account for 50–60% of biosimilar development costs and often extend timelines for such development by several years. Removing this hurdle will both cut development costs substantially and reduce time-to-market by several years.
A streamlined pathway will obviously allow many more biosimilars to reach the market, dramatically increasing treatment options. Increased competition will drive prices down, offering system-wide healthcare savings. This is estimated at $4.5 billion per year in the US if competitive pricing matches Europe’s experience.
This major regulatory change of policy will impact on several sectors in our industry:
Big Pharma will have to re-evaluate their strategies on biologics from different perspectives. They could potentially consider expanding biosimilar portfolios to fill sales gaps quickly. On the other hand, Big Pharma companies that are already heavily invested in original biologics, must also consider the impact that this regulatory shift will have on the life cycle paradigm of such products. Until now, this category of products has enjoyed longer life cycles, with post patent sales drops due to copycat erosion being considerably less steep. This will obviously change as the biosimilar barriers to entry are so substantially reduced, and thus the pending Big Pharma “patent cliff”, which was discussed in the last edition of this Newsletter, just grew even more menacing…
Generic companies that have previously found the barriers to entry to get in on biosimilars to be prohibitive will now find the lower regulatory and financial hurdles much more palatable, and this could attract several of them that have previously not considered it, to enter the biosimilars market segment. Their competitive advantage in price-based supply chains will stimulate fierce competition, emulating generic small-molecule market dynamics. Streamlining the US biosimilar approval process will bring America into alignment with the EMA/MHRA models. This consistency simplifies global launches and harmonizes product portfolios for multinational generics, further increasing biosimilar development incentives.
Small biotech firms, previously constrained by high CES costs and operational hurdles, will now find biosimilar development to be more rewarding and manageable with both Big Pharma and a new category of generic/biosimilar companies being potential licensees. Venture capital and public market interest is expected to grow as development timelines shorten and risk diminishes significantly, further boosting the capabilities of Biotech in this area. In short, the emphasis will move away from clinical trials, which predominantly require financial muscle power, and onto the core skill of biochemistry per se. Biologics manufacturing is also likely to see a boost as more biologic products will compete.
Conclusion
Wherever there are rapid changes in a regulatory framework, companies that can rapidly adapt their strategies to fit the new circumstances stand to benefit the most. It is as the old adages says, the earl-bird that catches the worm. In this case, the strategic adaptation needed will stretch across the fields of Big Pharma, Generics, Biotech, and others.