Changes in the Biosimilar Regulations in H1 2026 in the United States and European Union

The two FDA changes act on the same part of the cost base, which is the upfront investment a sponsor makes in a single program before the product generates revenue. The comparative efficacy study was the largest single item and the longest lead item in that investment, at approximately $24 million and one to three years according to the FDA’s own estimate. Removing the study as the default expectation reduces both the development budget and the time to approval. The revised position on comparators removes a second and less visible item, the purchase and shipment of large volumes of US-licensed reference product and the additional study arm required to bridge to it, which the FDA estimates is worth approximately $20 million for each program. Assuming that both guidance documents are finalized substantially as drafted, the two changes together remove a material share of the pre-approval cost base for a well-characterized molecule. Neither change affects manufacturing costs or future revenue once the product reaches the market.

Three consequences follow:

• The population of molecules able to support a positive business case widens because programs on mid-sized reference products that previously did not advance due to development cost may now clear the hurdle.
• The advantage held by well-capitalized developers is reduced at the development stage and moves toward manufacturing capacity, commercial reach, and the capacity to fund patent litigation, none of which are made more cost-effective by the guidance documents.
• Competitive intensity on the highest-value molecules increases because lower entry costs attract more entrants to the same targets, which argues for earlier launch positioning and portfolio breadth rather than concentration on a single flagship asset; smaller and non-US developers benefit most directly, and several such companies entered new molecule classes during H1 2026.

The changes also alter a decision that sits outside the regulatory file. A company that in-licenses a biosimilar does not carry the development investment and instead pays through a royalty on net sales and a manufacturing margin to its contract development and manufacturing organization. A company that develops in-house carries the investment and keeps the margin. Owning a development platform therefore is more likely to be economically justified above a certain number of programs, and a lower cost for each program lowers that number.