Biosimilar Bills Would Automate Medicare Negotiation Delays

Two bills addressing biosimilar access and affordability were introduced in the House of Representatives and the Senate in late September 2026.¹

Both bills, the Biosimilars Access and Affordability Act, propose amending title XI of the Social Security Act to alter when biosimilar biological products are eligible for price negotiations under the Medicare Drug Price Negotiation (MDPN) program. In practice, the changes would determine when Medicare can select a reference biologic facing biosimilar competition for negotiation. The House bill (H.R. 10628) has 8 bipartisan cosponsors, and in the Senate, 4 bipartisan senators introduced the companion bill (S. 5571). The bills can provide the clarity and predictability biosimilar manufacturers need to confidently plan the investments that bring lower-cost medicines to patients.¹ The legislation comes in parallel with the FDA’s updated guidance to reduce regulatory burdens on biosimilar development. In March, the FDA issued draft guidance reducing the need for clinical pharmacokinetic studies, which the agency said could cut those study costs by up to 50%.²

“To date, biosimilars have been associated with savings of $56 billion, but with support from the administration and Congress, this number can be much higher,” Juliana M. Reed, executive director of the Biosimilars Forum, said in a press release.¹ “In fact, the next 5 years could see an increase in savings up to $181 billion for Americans and the healthcare system.”

Investing in biosimilars is a high-stakes risk for manufacturers, despite their benefit to patients and the competitive biologic market. The average time for the first biosimilar to launch is 18 years. Developing a biosimilar alone can take up to 9 years and cost $300 million, and companies make these decisions well before they know whether Medicare will select the reference product for price negotiation.¹

Bipartisan bills would automatically delay Medicare price talks for biologics facing biosimilars as California expands substitution. | Image credit: @MohamadFaizal.jpeg

How Medicare Drug Price Negotiation Handles Biologics Facing Biosimilar Competition

Under the MDPN program, drugs and biologics qualify for price negotiation if they are single-source brand-name products without a therapeutically equivalent generic or biosimilar that is approved or licensed and marketed on a “bona fide” basis. They must also be at least 7 years (small-molecule drugs) or 11 years (biologics) past FDA approval or licensure. Certain drugs are excluded from negotiation, including orphan drugs, low-spending drugs, plasma-derived products, and, from 2026 to 2028, “small biotech” drugs.³

If CMS determines that a generic or biosimilar has been approved or licensed and is being marketed before or during the negotiation process, the negotiation will not start or will be suspended. Although the drug will remain a selected drug under the MDPN program and will not be replaced, it will not have a negotiated maximum fair price and will be removed from the selected list for 2028. But CMS must make that determination between February 1, 2026, and November 1, 2026.³

The list of 15 drugs selected for Medicare Part B and Part D price negotiations for 2028 includes 2 drugs that may no longer be eligible for a negotiated price because a competitor has since reached the market. Generic versions of Xeljanz (tofacitinib) launched in June 2026, and Omlyclo (omalizumab-igec), an interchangeable biosimilar to Xolair (omalizumab), became commercially available in October 2026.^4,5 However, CMS noted that none of the 15 drugs selected for 2028 qualified for delayed selection based on a high likelihood of biosimilar market entry.³

With the negotiation period ending November 1, CMS has less than a month to make those determinations, and removal does not happen automatically.³

What the Biosimilars Access and Affordability Act Would Change

Under the House bill, introduced by Rep. Nick Langworthy (R-NY), CMS would automatically delay a reference biologic’s selection, rather than waiting for a biosimilar manufacturer to request a delay. The delay would last 2 years. If the biosimilar is not marketed in that time, the reference product would be selected for negotiation, and its manufacturer would owe a rebate. The bill would also prevent a negotiated price from taking effect if a generic or biosimilar is marketed before the first day of the year; that price would apply.⁶

“When companies can confidently invest in biosimilar development, patients and the healthcare system will benefit from more competition, greater choice, and lower prescription drug costs,” Reed said.

California Law Expands Pharmacy-Level Biosimilar Substitution

State leaders have also moved to more immediate actions to make biosimilars more accessible. California Gov. Gavin Newsom recently signed SB 1094, authored by State Sen. Akilah Weber Pierson (D-San Diego), into law. The law allows pharmacists to automatically substitute lower-cost biosimilars, including those not designated as interchangeable, for brand-name biologics and takes effect January 1, 2027.⁷

The law also requires health plans and insurers that cover a reference product to include at least 1 biosimilar or interchangeable product on the formulary when it has a lower net cost. It also sets limitations for private label biosimilars, prohibiting pharmacy benefit managers or plans from requiring sole coverage of an affiliated biosimilar on the formulary.⁷

“With this historic law, California becomes the first state in the nation to enact automatic substitution of non-interchangeable biosimilars at the pharmacy,” Reed said in a press release. “This is a landmark victory for patients and for prescription drug affordability, and it sets a model for every state looking to lower drug costs.”

References

1. The Biosimilars Forum welcomes bipartisan legislation to strengthen biosimilar competition. News release. Biosimilars Forum. September 30, 2026. Accessed October 12, 2026. https://biosimilarsforum.org/2026/09/30/the-biosimilars-forum-welcomes-bipartisan-legislation-to-strengthen-biosimilar-competition/

2. Al-Faruque F. FDA proposes major change to biosimilar PK study requirements. Regulatory Affairs Professionals Society. March 9, 2026. Accessed October 12, 2026. https://www.raps.org/news-and-articles/news-articles/2026/3/fda-proposes-major-change-to-biosimilar-pk-study-r

3. Cubanski J, Neuman T. Key facts about Medicare drug price negotiation. KFF. March 11, 2026. Accessed October 12, 2026. https://www.kff.org/medicare/key-facts-about-medicare-drug-price-negotiation/

4. Breckenridge announces launch of tofacitinib tablets, generic equivalent of Xeljanz by Pfizer. News release. Breckenridge Pharmaceutical. June 4, 2026. Accessed October 12, 2026. https://www.prnewswire.com/news-releases/breckenridge-announces-launch-of-tofacitinib-tablets-generic-equivalent-of-xeljanz-by-pfizer-302791702.html

5. Omlyclo (omalizumab-igec), the first and only FDA-approved interchangeable biosimilar to Xolair, now commercially available in the US. News release. Celltrion USA. October 5, 2026. Accessed October 12, 2026. https://www.prnewswire.com/news-releases/omlyclo-omalizumab-igec-the-first-and-only-fda-approved-interchangeable-biosimilar-to-xolair-now-commercially-available-in-the-us-302898400.html

6. H.R. 10628. Biosimilars Access and Affordability Act. 119th Cong (2026). Accessed October 12, 2026. https://www.congress.gov/bill/119th-congress/house-bill/10628/text

7. The Biosimilars Forum commends Governor Newsom for signing landmark biosimilars legislation into law. News release. Biosimilars Forum. October 2, 2026. Accessed October 12, 2026. https://biosimilarsforum.org/2026/10/02/the-biosimilars-forum-commends-governor-newsom-for-signing-landmark-biosimilars-legislation-into-law/