S-1954-119
Placed on Senate Legislative Calendar under General Orders. Calendar No. 521.
Sponsored by Mike Lee (R-UT)
What it does
This bill would amend the Public Health Service Act to automatically deem any FDA-licensed biosimilar drug "interchangeable" with its reference (brand-name) biological product, eliminating the separate interchangeability designation that currently requires additional clinical data. It would take effect 60 days after enactment for newly licensed biosimilars, and for already-licensed biosimilars on that same transition date. The bill preserves existing "first interchangeable" market exclusivity periods already in effect for biosimilars that earned them under the old rules, and gives the Secretary of Health and Human Services discretionary (not mandatory) authority to issue updated guidance on biosimilarity data requirements.
Who benefits
Patients who use biological drugs (e.g., insulin analogs, cancer treatments, autoimmune therapies) and would gain access to lower-cost interchangeable biosimilars at the pharmacy counter without needing a new prescription. Pharmacists, who could substitute biosimilars for brand-name biologics without physician intervention in states that allow automatic substitution. Biosimilar manufacturers who would no longer need to conduct costly additional switching studies to earn the interchangeability designation. Health insurers and pharmacy benefit managers who could more easily steer patients to lower-cost biosimilars. Employers and government payers (Medicare, Medicaid) who could see reduced drug spending. Taxpayers who fund federal health programs.
Who is hurt
Brand-name biological drug manufacturers (reference product sponsors) who would face earlier and broader biosimilar competition at the pharmacy level. Biosimilar companies that already invested in and completed the now-eliminated switching studies to earn interchangeability status, as their competitive advantage from that investment would be reduced. Patients and physicians who value the current two-step system as a safety signal, and who may be concerned about automatic substitution without explicit physician review. Some patient advocacy groups that argue the interchangeability standard provided an additional layer of assurance for complex biological medicines. Biosimilar manufacturers currently holding "first interchangeable" exclusivity periods, whose market exclusivity is preserved but whose competitive moat shrinks as all biosimilars become interchangeable by default.
Supporters argue
Supporters argue that the separate interchangeability designation was a uniquely American regulatory barrier with no equivalent in Europe or Canada, where biosimilars are routinely substituted without additional switching studies. They contend that the FDA's own biosimilarity standard already requires rigorous evidence that a biosimilar has no clinically meaningful differences from its reference product, making the extra interchangeability hurdle redundant. They point to the European Medicines Agency's decades of safe biosimilar substitution experience as evidence that the additional studies do not meaningfully improve patient safety, while adding years of delay and tens of millions of dollars in development costs that ultimately suppress competition and keep drug prices higher.
Opponents argue
Opponents argue that biological drugs are far more complex than small-molecule drugs — they are large proteins manufactured in living cells, and even minor manufacturing differences can affect immune responses in patients. They contend that the switching studies required for interchangeability designation specifically tested whether patients could safely alternate between a biosimilar and its reference product, and that eliminating this requirement removes a meaningful safety data point for the most vulnerable patients on long-term biologic therapies. They further argue that automatic pharmacy-level substitution without physician involvement undermines the patient-physician relationship for drugs that can cost tens of thousands of dollars annually and carry serious immunogenicity risks.