Dr. Reddy's Biosimilar Poised to Challenge High Autoimmune Drug Costs

HYDERABAD, India – February 20, 2026 – A significant move to lower the cost of critical autoimmune therapies is underway as the U.S. Food and Drug Administration (USFDA) has accepted for review a new drug application from Dr. Reddy’s Laboratories. The Indian pharmaceutical giant announced that its Biologics License Application (BLA) for DRL_AB, a proposed interchangeable biosimilar to the blockbuster drug Orencia® (abatacept), is now officially under FDA consideration.

This development marks a potential turning point for thousands of patients in the United States suffering from debilitating conditions like rheumatoid arthritis (RA), psoriatic arthritis (PsA), and polyarticular juvenile idiopathic arthritis (pJIA). Orencia, the reference product manufactured by Bristol-Myers Squibb, is a highly effective treatment but comes with a steep price tag, often exceeding $6,000 per month. The introduction of a cost-effective, interchangeable biosimilar could dramatically increase patient access and generate substantial savings for the U.S. healthcare system.

Dr. Reddy’s is the first company to have an abatacept biosimilar application accepted for review by the FDA, a milestone that underscores its growing ambitions in the complex biologics space. “We are proud to be the first to submit a BLA for an abatacept biosimilar which marks a significant milestone in our mission to increase patient access to critical, high-quality biologic therapies," said Milan Kalawadia, CEO of North America at Dr. Reddy’s, in a statement. “We look forward to working with the FDA to bring this in-house developed biosimilar to market as a cost-effective alternative for patients and healthcare providers in the United States."

A New Frontier in Autoimmune Treatment Costs

The financial burden of chronic autoimmune diseases is immense. Biologic drugs like Orencia, which work by selectively modulating the immune system, have revolutionized treatment but remain among the most expensive medications on the market. Bristol-Myers Squibb's Orencia commands a multi-billion-dollar market, with global sales reaching approximately $2.3 billion in 2023 and projected to grow significantly.

Biosimilars are designed to be nearly identical, safe, and effective versions of original biologic drugs. Since their introduction in the U.S. in 2015, they have already generated an estimated $36 billion in savings. The potential entry of an abatacept biosimilar is highly anticipated by payers and patient advocacy groups alike.

"The list price of these drugs is often a major barrier to care," noted one healthcare economist who spoke on the condition of anonymity. "When a biosimilar enters the market, especially one with an interchangeable designation, it introduces direct price competition that can lead to savings of 40% or more. This isn't just about saving money for insurance companies; it's about ensuring patients can afford the treatments they desperately need without facing financial ruin."

The 'Interchangeable' Edge and Market Hurdles

Dr. Reddy’s is specifically seeking an interchangeable designation for DRL_AB, a crucial regulatory distinction in the U.S. market. A standard biosimilar must be prescribed by a doctor, but an interchangeable biosimilar can be substituted for the original brand-name drug by a pharmacist without consulting the prescriber, much like a generic version of a small-molecule drug. This streamlines access and is expected to accelerate market adoption.

However, the path to widespread use is not without its challenges. The distinction between 'biosimilar' and 'interchangeable' has created confusion, with some providers incorrectly perceiving non-interchangeable products as inferior. A recent survey showed over 60% of physicians would be more comfortable prescribing a biosimilar with an interchangeability designation, highlighting the psychological power of the label.

Furthermore, Pharmacy Benefit Managers (PBMs) play a pivotal role. Their formulary decisions, often driven by complex rebate negotiations with brand-name manufacturers, can sometimes slow the uptake of lower-cost biosimilars. Even with a significant price discount and an interchangeable status, a biosimilar's success can hinge on securing favorable placement on insurance plans. The FDA itself is working to simplify this landscape, recently issuing draft guidance suggesting that the extensive 'switching studies' previously required for interchangeability may no longer be necessary, a move aimed at encouraging more biosimilar development.

Dr. Reddy's High-Stakes Bet on Biosimilars

The BLA submission for DRL_AB is a cornerstone of Dr. Reddy's global strategy to become a major player in the high-value biosimilars market, particularly in immunology and oncology. Headquartered in Hyderabad, the company has methodically built its capabilities over two decades, transitioning from a generics powerhouse to a developer of complex biologics for highly regulated markets.

This move follows a mixed but determined track record. In March 2024, the company successfully launched Versavo®, its bevacizumab biosimilar, in the United Kingdom, marking a key entry into a major European market. However, its ambitions in the U.S. faced a setback in April 2024 when the FDA issued a Complete Response Letter for its rituximab biosimilar candidate, citing regulatory inspection issues. This history makes the smooth progression of DRL_AB's review even more critical for the company's reputation and strategic growth in North America.

With six commercial biosimilar products already marketed in India and over 30 other countries, Dr. Reddy's has demonstrated its ability to develop and manufacture these complex therapies. The potential approval of DRL_AB in the U.S. would represent its most significant biosimilar achievement to date, validating its substantial investment in research and development.

The Science Behind the Similarity

DRL_AB is designed to mimic Orencia's mechanism of action, which involves inhibiting the activation of T-cells—a type of white blood cell implicated in the inflammatory processes of rheumatoid arthritis. By binding to proteins known as CD80 and CD86, it blocks a key signal needed to activate these cells, thereby reducing inflammation and joint damage.

The BLA submission to the FDA contains a comprehensive data package to prove its similarity to Orencia. This includes data from a Phase 1 study that successfully demonstrated DRL_AB has a comparable pharmacokinetic profile, safety, and immunogenicity to the reference product. A pivotal Phase 3 clinical trial is currently ongoing to confirm its efficacy and safety are equivalent to Orencia in patients.

As the FDA begins its rigorous review process, patients, physicians, and competitors will be watching closely. If approved, Dr. Reddy's abatacept biosimilar would not only offer a new, more affordable treatment option but also signal a new phase of competition in the lucrative market for autoimmune therapies.