The FTC's Views on Biosimilars Legislation
As we went to press, the US Federal Trade Commission (FTC) issued its report on biosimilars. Entitled, Emerging Health Care Issues: Follow-on Biologic Drug Competition, the FTC report examined the effects on commercial competition that may result from the various regulatory schemes currently
being considered. The report contained a number of findings and recommendations, among them finding that the longer exclusivity
period proposed in the Eshoo biologics bill "is unnecessary to promote innovation by pioneer biologic drug manufacturers"
(p. vi) and "imperils the efficiency benefits of a [follow-on biologics] approval process in the first place" (id. at p. vii).
However, the report also recommended against adoption of a traditional Hatch-Waxman regulatory scheme as proposed in the Waxman
biologics bill, contending that such a scheme would still have "anticompetitive consequences" (id. at p. x), and that "market
dynamics counsel against [a follow-on biologics] exclusivity period" (id., at p. ix). This is because, in the FTC's view,
market entry of a subsequent follow-on biologic after the approval of the first is "unlikely to cause a substantial price
drop due to the high costs of developing and manufacturing" follow-on biologics in general (id.). Thus, the FTC report concludes,
"market opportunities are likely to be sufficient to incentive [sic] development of interchangeable [follow-on biologics]"
(id.), and that competition in the biologics market thus would be more akin to brand–brand competition rather than brand–generic
competition in the small molecule arena. As a result, the FTC report does not favor the regulatory schemes proposed in either
the Waxman or the Eshoo bills; instead, the report concludes that the most promising system would be one that would provide
for an abbreviated FDA approval while relying on patent protection and market-based pricing to promote competition and spur
innovation in the biologics marketplace.
Given the two different regulatory schemes provided by the Waxman and Eshoo bills, the debate over which proposal should prevail
will no doubt continue to grow within the House and between the industry, trade, and consumer groups having sometimes-competing
interests in the outcome of this debate. Healthcare reform is one of the top priorities of the Obama Administration, and the
administration's 2010 budget proposal contained a framework for biosimilars regulation that appears to mirror the Hatch-Waxman
pathway for small-molecule generic pharmaceuticals. As a result, we can likely expect heavy lobbying efforts from the generics
and the biotechnology industries as Congress works toward a final bill. With the biopharma industry continuing to mature and
beginning to deliver its long-promised benefits in the treatment and prevention of certain diseases, and as that industry
is increasingly viewed as the "savior of the pipeline" for many traditional pharmaceutical companies, it becomes even more
important that the debate is framed such that the outcome—a workable mechanism for FDA review and licensing of biosimilars—ultimately
maximizes the protection of the interests of the public as well as those of both the biotechnology and generics industries.
The views expressed herein are those of the author and should not be attributed to former, present, or future clients or any
employees of Sterne, Kessler, Goldstein & Fox P.L.L.C.
Brian J. Del Buono, PhD, is a director in the Biotechnology/Chemical Group at Sterne, Kessler, Goldstein & Fox, Washington, DC, 202.371.2600, email@example.com
*Throughout this article, the term biopharma is used to refer to the combination of biotechnology and pharmaceutical companies.
It is recognized that companies in these two industries face certain issues that are unique to one industry or the other.
However, because the author believes that there is significant overlap in the primary issues relating to regulation of biosimilars
that are important to both industries, and because a number of companies straddle the line between the two, biopharma has
been used throughout this article to refer to the combination of the biotechnology and pharmaceutical industries.