USFDA accelerates biosimilar approvals process in the US — Four stocks that could benefit

The United States Food and Drug Administration (USFDA) has issued new draft guidelines to simplify and speed up the biosimilar drug development process in the US.

The move is intended to make biosimilars emerge as a lower cost alternative to biologics, and will also be faster and cheaper to bring to the market.

Such a move will be positive for Indian drugmakers such as Biocon, Dr. Reddy's Laboratories, Lupin and Sun Pharma, who have exposure to the biosimilars market in the US.

The draft regulations reduce the requirement for costly, low-yield comparative efficacy studies, and allows reliance on analytical testing instead of large clinical trials.

The recommendation for "Switching studies" for interchangeable biosimilars has also been dropped as part of the draft guidelines.

Biologics are only part of 5% of overall prescriptions in the US, but accounted for 51% of the total drug spending in the country as of 2024.

So far, the USFDA has approved 76 biosimilars but the market share of these remains below 20% with only 10% of the biologics losing patent protection having a biosimilar in development.

Shares of Sun Pharma have risen 8% in the last one month, while those of Lupin are up 2.5%. Shares of Biocon have risen 10% in the last one month. Dr. Reddy's will also be in focus due to the delay in Semaglutide injection approval from the Canadian regulator.