FTC Releases Report, Testifies To Congress On Biologic Drug Pricing & Competition

Federal Trade Commission (FTC)  Commissioner Pamela Jones Harbour yesterday (June 11, 2009) shared the FTC’s findings and recommendations about when and how competition from follow on biologic drugs (FOBs) would reduce the price of existing biologic drugs during her testimony to the Subcommittee on Health of the U.S. House of Representatives Energy and Commerce Committee.

The findings and recommendations about biologic drug pricing and competition are detailed in a new FTC report, “Follow-on Biologic Drug Competition” (Report),  The Report examines whether and how the price of biologic drugs – products manufactured using living tissues and microorganisms – could be reduced by competition from so-called follow-on biologics (FOBs). Biologics are increasingly used to treat arthritis, cancer, diabetes, and other diseases. Lower-priced FOBs are like generic drugs, but with significant differences.

The Commission’s Report draws a number of conclusions about the likely impact of possible incentives to promote FOB competition:

  • Legislation creating an abbreviated FDA approval process of fobs is likely to be an efficient way to bring them to market, because of the time and cost savings it would provide;
  • Patent protection and market-based pricing will promote competition by fobs, as well as spur biologic innovation;
  • A 12- to 14-year regulatory exclusivity period for pioneer biologics is too long to promote innovation by these firms, particularly since they likely will retain substantial market share after FOB entry;
  • Special procedures to resolve patent issues between pioneer and FOB manufacturers before FDA approval are not needed and could undermine patent incentives and harm consumers; and
  • FOB manufacturers are unlikely to need additional incentives – such as a 180-day marketing exclusivity period – to develop interchangeable FOB products.

Copies of the Report can be found on the Commission’s Web site here. 

For More Information

We hope that this information is useful to you. If you need assistance with auditing or defending health care fraud concerns or other health care compliance, risk management, transactions or operations concerns, please contact Cynthia Marcotte Stamer at (214) 270-2402, CStamer@CTTLegal.com.

You can review other recent health care and internal controls resources and additional information about the health industry and other experience of Ms. Stamer here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information to CStamer@CTTLegal.com.

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