We previously demonstrated pharmacokinetic differences among manufacturing batches of a US Food and Drug Administration (FDA)-approved dry powder inhalation product (Advair Diskus 100/50) large enough to establish between-batch bio-inequivalence. Here, we provide independent confirmation of pharmacokinetic bio-inequivalence among Advair Diskus 100/50 batches, and quantify residual and between-batch variance component magnitudes. These variance estimates are used to consider the type I error rate of the FDA's current two-way crossover design recommendation. When between-batch pharmacokinetic variability is substantial, the conventional two-way crossover design cannot accomplish the objectives of FDA's statistical bioequivalence test (i.e., cannot accurately estimate the test/reference ratio and associated confidence interval). The two-way crossover, which ignores between-batch pharmacokinetic variability, yields an artificially narrow confidence interval on the product comparison. The unavoidable consequence is type I error rate inflation, to ∼25%, when between-batch pharmacokinetic variability is nonzero. This risk of a false bioequivalence conclusion is substantially higher than asserted by regulators as acceptable consumer risk (5%).