The Biosimilars Forum Commends Governor Newsom for Signing Landmark Biosimilars Legislation into Law
California Becomes First State in the Nation to Allow Pharmacy Substitution of FDA-Approved Biosimilars Without a Separate Interchangeability Designation and Makes Important Reforms to PBM Strongholds on Biosimilar Access
Juliana M. Reed, executive director of the Biosimilars Forum, released the following statement after California Gov. Gavin Newsom signed SB 1094, authored by State Sen. Akilah Weber Pierson (D-San Diego), into law. The new law allows pharmacists to automatically substitute lower-cost biosimilars – including biosimilars not designated as interchangeable – for brand-name biologics. The law also requires health plans and insurers that cover a reference product to include at least one biosimilar or interchangeable product on the relevant formulary when it has a lower net cost. Importantly, the law also put limits on private label biosimilars by prohibiting a plan or PBM from requiring sole coverage of an affiliated biosimilar on the formulary. This will ensure fairer biosimilar market competition and the strengthens the author’s original intent of the bill to bring more lower-cost biosimilars to patients. The law takes effect January 1, 2027.
“The Biosimilars Forum and our members applaud Gov. Newsom, Senator Akilah Weber Pierson, and the California Legislature for enacting SB 1094. With this historic law, California becomes the first state in the nation to enact automatic substitution of non-interchangeable biosimilars at the pharmacy. 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.
“This is a historic step to expand access to safe, effective and lower-cost biosimilars for millions of Californians. California is leading the nation by recognizing what the science has long shown – that FDA-approved biosimilars provide the same clinical benefits as their reference products and should be able to compete on a level playing field. Importantly, the law puts restraints on PBM ownerships or financial interest in “private label biosimilars” by ensuring that at least one biosimilar without a financial interest in a PBM is available of formularies throughout California.
“Approximately 22.8 million Californians enrolled in state-regulated health insurance will have coverage subject to SB 1094. By opening the door to greater biosimilar competition, California is creating an opportunity to expand patient choice and help lower prescription drug costs. Pharmacists have safely substituted lower-cost generics for decades. Now, they will be able to do the same with biosimilars, giving millions of patients faster, simpler access to more affordable treatment options for conditions, like cancer, diabetes, and more.
“This law also sends an important message nationally. Biosimilars are already rigorously reviewed and approved by the FDA as highly similar to their reference biologics with no clinically meaningful differences. Policies governing their use should reflect that science and allow these medicines to compete for patients based on value, access and cost.
“Biosimilars are a proven source of competition that can lower costs and expand treatment options for patients. But developing a biosimilar is a lengthy and costly process. The average time for the first biosimilar to launch is 18 years, and the earliest a biosimilar has ever entered the market is just under 13 years. Developing a biosimilar can take up to nine years and $300 million, and those investment decisions are made years before a manufacturer can know whether the reference product will be selected for negotiation.
“Ensuring biosimilars reach the patients is especially important considering the ‘biosimilar void.’ Of the 118 biologics expected to lose patent protection over the next decade, only 10 percent currently have biosimilars in development. This void in the biosimilar market significantly limits potential savings to the healthcare system, and steps to streamline development and approval can help mitigate its detrimental impact on the industry.
“Today, nearly 90 biosimilars have been approved by the FDA in the United States across dozens of disease states. The potential of biosimilars is enormous. 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. In fact, the next five years could see an increase in savings up to $181 billion for Americans and the healthcare system.”
For more information on the Biosimilars Forum’s work to increase access to lower-cost biosimilars, visit biosimilarsforum.org.
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