FTC- Biosimilars to spur innovation and competitive prices

Biosimilars/Research | Posted 02/02/2010 post-comment0 Post your comment

In the Journal of Generic Medicines (published online 8 September 2009), Michael Wroblewski and Elizabeth Jex of the US Federal Trade Commission (FTC) write about the promise of follow-on biologics (FOBs) to spur both biological drug innovation and competitive prices.


As they point out, recent debates over how to structure an approval pathway at the US FDA for FOBs have taken a predictably polarised turn, with the pioneer drug manufacturers on one side, and the FOB industry on the other.

According to them, each side is arguing for statutory entry restrictions in the form of exclusivity periods that they argue will promote innovation and consumer access to lower-priced biological drug products. These entry barriers are based on those in the Hatch–Waxman Act's approval process for generic small-molecule drugs.

The authors write that in June 2009, the FTC provided an independent analysis on how the proposals would likely affect consumers in its report Emerging Health Care Issues: Follow-On Biologic Drug Competition. The FTC report stated, “The likely market dynamics of FOB competition will resemble brand-to-brand drug competition, rather than a generic drug product. Experience to date for two markets with both pioneer biologic and FOB competitors (in Europe and the US) confirms that, unlike generic drug entry, FOB entry has not resulted in steep price discounting, or rapid acquisition of market share, by FOB manufacturers. This is because the substantial costs to obtain FDA approval, plus the substantial fixed costs to develop manufacturing capacity, will likely limit the number of competitors that undertake entry with FOB products. Given these high entry costs, FOB entrants are likely to be large companies with substantial resources, and it is likely that only two to three FOB entrants will seek approval to compete with a particular pioneer biologic drug. The lack of automatic substitution between an FOB product and a pioneer biologic drug will slow the rate at which an FOB product can acquire market share and thereby increase its revenues. An FOB drug also may have difficulty gaining market share due to concerns about safety and efficacy differences between a pioneer biologic drug and the competing FOB. The specialty pharmaceutical characteristics of FOBs also are likely to constrain the ability of an FOB entrant to obtain market share. Biologic drugs currently are not reimbursed pursuant to strategies that payers often use to incentivize the use of lower-priced drugs; this, too, may limit market share acquisition by FOBs. Furthermore, existing incentives that support brand-to-brand competition among biologic drugs – patent protection and market-based pricing – are likely to be sufficient to support FOB competition and biologic innovation. A twelve- to fourteen-year exclusivity period is unnecessary to promote innovation by pioneer biologic drug manufacturers. Special procedures to resolve patent issues between pioneer and FOB drug manufacturers prior to FDA approval are unnecessary and they could undermine patent incentives and harm consumers. FOB drug manufacturers are unlikely to need additional incentives to develop interchangeable FOB products”.

Mr Wroblewski and Ms Jex conclude in their article that an FOB regulatory approval pathway need only rely on the US patent system and market-based pricing to continue to incentivise development of both pioneer and FOB drugs. Further, inclusion of entry barriers in the form of regulatory exclusivity periods and special patent resolution procedures would likely harm consumers by delaying FOB entry and decreasing the pace of biotech innovation.


Michael S. Wroblewski and Elizabeth A. Jex. The promise of follow-on biologics to spur both biologic drug innovation and competitive prices. Journal of Generic Medicines (2010) 7, 8–17; Published online 2009 September 8.

Emerging Health Care Issues: Follow-on Biologic Drug Competition. Federal Trade Commission Report. June 2009.

Source: Journal of Generic Medicines; Federal Trade Commission Report

comment icon Comments (0)
Post your comment
Most viewed articles
About GaBI
Home/About GaBI Posted 06/08/2009
EU guidelines for biosimilars
EMA logo 1 V13C15
Home/Guidelines Posted 08/10/2010