Biosimilars Access and Affordability Act
- Sponsor
- Rep. Langworthy, Nicholas A. [R-NY-23]
- Committees
- Ways and Means Committee (primary)
- Last action
- Sep 28, 2026
Bottom line
The bill aims to incentivize the development and market entry of biosimilar biological products by extending the period before their reference products face Medicare price negotiations, while also implementing a financial penalty if those biosimilars do not materialize as expected.
What it actually does
This bill amends the Social Security Act to modify the criteria and timing for when biosimilar biological products become eligible for price negotiations under the Medicare program. Specifically, it extends the period before a reference biological product becomes subject to negotiation from one to two years if a biosimilar is expected to enter the market. It also establishes an automatic delay mechanism based on biosimilar development milestones and introduces a rebate requirement for reference product manufacturers if the anticipated biosimilar fails to be licensed and marketed within the extended delay period.
Proponents argue
Proponents argue that the current Medicare drug price negotiation timeline inadvertently stifles biosimilar development by reducing the market exclusivity period for reference products, thereby diminishing the incentive for biosimilar manufacturers to invest in costly R&D. They contend that extending this delay, coupled with accountability mechanisms, will foster a more robust biosimilar market, ultimately leading to greater competition, lower drug costs, and improved patient access to affordable medications in the long run.
Opponents contend
Opponents might argue that extending the delay for price negotiations, even with the intent to foster biosimilar competition, could prolong periods of high drug costs for Medicare beneficiaries and the program itself. They may contend that the existing framework is sufficient or that the proposed changes introduce unnecessary complexity or potential loopholes that could be exploited by pharmaceutical companies, delaying cost savings without guaranteed market benefits.
The bill is concise and focused, allowing an informed reader to grasp its core provisions and implications within a reasonable timeframe, especially for those familiar with Medicare drug pricing mechanisms.
Section 2(a)(1) and (2) amending Section 1192(c) and (f) of the Social Security Act
Extension of Delay for Biosimilar Reference Products from 1 to 2 Years
This provision changes the existing Medicare drug price negotiation rules by extending the period a reference biological product can delay price negotiations from one year to two years if a biosimilar version is expected to enter the market. This aims to provide a longer window for biosimilars to establish market presence before the reference product's price is negotiated, theoretically making biosimilar development more attractive.
Supporters argue
Supporters argue this longer delay provides a more meaningful incentive for biosimilar manufacturers to invest in development and bring products to market, as it ensures a longer period where the reference product's price is not subject to negotiation, making the biosimilar's competitive entry more attractive and ultimately driving down costs.
Critics contend
Critics might argue that extending the delay by an additional year prolongs the period of high drug prices for Medicare, potentially costing the program and beneficiaries more in the short term, without a guaranteed increase in biosimilar market entry or significant long-term benefits.
Tradeoffs
The bill balances the immediate goal of lowering drug costs through negotiation with the long-term goal of fostering biosimilar competition, which is also expected to lower costs. The tension lies in whether the extended delay is a necessary catalyst for biosimilar market entry or an unnecessary concession that prolongs high prices.
Section 2(a)(2)(B) inserting new Section 1192(f)(1)(B)(i)
Automatic Application of Delay Based on Biosimilar Development Milestones
This provision mandates that the Secretary of Health and Human Services (HHS) automatically applies the 2-year delay to a reference biological product if a biosimilar manufacturer has publicly disclosed that its application for licensure was accepted or approved, or that clinical studies are initiated/complete, AND the Secretary determines the biosimilar is expected to be marketed within 2 years. This determination is based on information from any source, with a confirmation requirement from the biosimilar manufacturer.
Section 2(a)(2)(B) inserting new Section 1192(f)(2)(B)(ii) and Section 2(a)(2)(D) amending Section 1192(f)(4)
Financial Rebate Requirement if Biosimilar is Not Licensed and Marketed
If a reference biological product receives a 2-year delay from price negotiations because a biosimilar was expected, but that biosimilar is not licensed and marketed within 2 years of the original selected drug publication date, the manufacturer of the reference product must pay a rebate. The rebate amount is calculated based on a percentage (75% for Part D, 80% for Part B) of the difference between the average manufacturer price (or payment amount) and what the maximum fair price would have been, for the years the delay applied.
Section 2(a)(3) adding new Section 1192(g)
Definition of "Marketed"
The bill explicitly defines "marketed" for the purposes of this section as a drug or biological product (including a biosimilar) being "introduced or delivered for introduction into interstate commerce." This clarifies precisely when a biosimilar is considered to have entered the market, which is crucial for determining if the delay conditions have been met and if rebates are due.
The bill explicitly states that the existence of pending or prospective patent litigation over a biosimilar biological product shall not preclude the application of the 2-year delay or a finding of 'high likelihood' of marketing.
Section 2(a)(2)(B)(III)(bb) and Section 2(a)(2)(C) (new 1192(f)(1)(B)(i)(II)(bb) and 1192(f)(3)(C))
Why it matters:This is a technical clarification designed to preempt potential legal arguments that patent disputes should prevent a delay from being granted. It's standard legislative practice to place such specific carve-outs within the relevant technical sections.
Case for: Supporters would argue this provision is crucial to prevent patent disputes from being used as a tactic to block or delay the incentives for biosimilar market entry, ensuring the policy's intent to foster competition is not undermined by legal maneuvering.
Case against: Critics might argue that ignoring patent litigation in the determination of market likelihood could lead to delays being granted for biosimilars that ultimately cannot enter the market due to valid intellectual property protections, thus prolonging high prices without actual competition.
Estimated impact: Potentially significant, as patent litigation is a common and often lengthy factor in biosimilar market entry. This provision could accelerate the process by removing a potential barrier to the delay, impacting the timing of billions in drug spending.
This section specifies the exact percentages (75% for Part D drugs and 80% for Part B biological products) and the baseline prices (average manufacturer price or payment amount versus the maximum fair price) for calculating the rebate if a biosimilar is not licensed and marketed as expected.
Section 2(a)(2)(D) amending Section 1192(f)(4)(B)
Why it matters:Specific calculation details are inherently technical and often placed in detailed subsections. This is standard legislative practice for complex financial mechanisms, ensuring precision in the law's application.
Case for: Supporters would argue these specific percentages and baselines are carefully chosen to ensure a meaningful recovery of foregone savings without being overly punitive, striking a balance to maintain incentives for both reference and biosimilar manufacturers.
Case against: Critics might argue the percentages are too low to fully compensate for the extended period of higher prices, or that the calculation method is prone to manipulation or underestimation of actual market prices, thus failing to adequately protect Medicare's fiscal health.
Estimated impact: Directly determines the financial consequences for manufacturers and the fiscal recovery for Medicare, potentially involving billions of dollars depending on the drugs involved and the frequency of rebate triggers.