Markets Wired

The Federal Trade Commission will host a one-day public workshop on December 10, 2013, at its headquarters in Washington, DC, to examine competition issues surrounding biologic and follow-on biologic medications.  As explained in the Commission’s Federal Register notice, the workshop will specifically focus on how state regulations and naming conventions may impact the development of, and competition for, follow-on biologics.

This workshop reflects the Commission’s longstanding interest in promoting competition in the pharmaceutical industry.  Competition between “small molecule” branded drugs and lower-priced generic alternatives, facilitated by state automatic substitution laws, has substantially reduced prescription drug prices and expenditures.  In 2010, to encourage price competition and innovation in markets for biologics, Congress passed the Biologics Price Competition and Innovation Act (BPCIA), which established an abbreviated regulatory pathway for the approval of follow-on biologics by the U.S. Food and Drug Administration (FDA).

Biologics, which comprise the fastest-growing sector of pharmaceuticals, target such difficult-to-treat diseases as cancer, diabetes, and multiple sclerosis.  They include vaccines, antitoxins, blood products, proteins, and monoclonal antibodies.  Biologic medicines consist of molecules that typically are larger and more structurally complex than those of traditional small molecule drugs. Biologic medicines are very expensive; one year of treatment can range from $50,000 to $250,000, and access to biologics is often restricted because of cost.

Although to date, the FDA has not approved any follow-on biologic that might compete against a “reference” biologic, some state legislatures have recently considered and passed laws that could affect the substitution of follow-on biologics for reference biologics.  Some commenters have raised concerns that state-level regulatory barriers may raise costs and lessen incentives to develop lower cost follow-on biologics, thus deterring the development of competition between reference and follow-on biologics.

The FTC’s workshop will examine how biologic competition could be affected by state regulation, and also by the naming conventions currently under discussion for follow-on biologics.  It also will examine ways to structure the regulations and naming conventions so as to facilitate innovation and competition, while protecting patient health and safety. The workshop will explore if and when potential entrants would be willing to invest in developing follow-on biologics using the abbreviated regulatory pathway created by the BCPIA, as well as the experience of other countries with regulatory systems that enable follow-on biologic competition.

Questions the FTC will address include:

• How would the new state follow-on biologic substitution laws passed this year, or similar proposals pending in other states, affect the competition expected between or among biosimilar, interchangeable and reference biologic medicines?
• What are the rationales behind new state proposals and laws for regulating follow-on biologic substitution?
• What are the compliance costs associated with the new state requirements, and how are they likely to affect follow-on biologic competition?
• Would it benefit competition if the FDA published an authoritative listing of follow-on biologics that are biosimilar to, or interchangeable with, reference biologics?  Would such a publication facilitate substitution?

The workshop is free and open to the public.  It will be webcast on the FTC’s site.  In the near future, the Commission will publish an agenda and list of speakers on the event’s webpage.  The FTC is accepting public comments through March 1, 2014.

Reasonable accommodations for people with disabilities who wish to attend the workshop in person are available upon request. Requests should be submitted via email to lbusby@ftc.gov or by calling Lara Busby at 202-326-3388. Requests should be made in advance.  Please include a detailed description of the accommodation needed and provide contact information. Directions to FTC headquarters can be found on the Commission’s website. Pre-registration is not required.

The Commission vote approving the notice announcing the workshop was 4-0.  The notice is available as a link to this press release and will be published in the Federal Register shortly.

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust{at}ftc{dot}gov, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 601 New Jersey Ave., N.W., Room 7117, Washington, DC 20001. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.