[Federal Register Volume 78, Number 221 (Friday, November 15, 2013)]
[Notices]
[Pages 68840-68845]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-27406]
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FEDERAL TRADE COMMISSION
Public Workshop: Follow-On Biologics: Impact of Recent
Legislative and Regulatory Naming Proposals on Competition
AGENCY: Federal Trade Commission.
ACTION: Notice of workshop and request for comments.
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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'')
announces it will hold a workshop to explore competition issues
involving biologic medicines and follow-on biologics. The workshop will
focus on the potential impact of state regulations and naming
conventions on such competition, including how regulations may be
structured to facilitate competition while still protecting patient
health and safety. The experience of developing follow-on competition
from small-molecule generic drugs will be considered and, as relevant,
compared. Topics will include the circumstances under which potential
entrants would be willing to invest in the development of follow-on
biologics in order to use the abbreviated regulatory approval pathway
created by federal legislation. The workshop will also survey the
experience of other countries with regulatory systems that enable
follow-on biologic competition. This Notice poses a series of questions
about which the FTC seeks public comment. The FTC will take these
comments into account in its examination of these topics.
DATES: The workshop will be held on December 10, 2013, in the FTC
headquarters at 600 Pennsylvania Avenue NW., Washington, DC. The FTC
workshop is free and open to the public and will also be webcast. Prior
to the workshop, the Commission will publish an agenda and further
information on its Web site. Comments in response to this notice must
be received on or before March 1, 2014.
ADDRESSES: Interested parties may file a comment online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Write ``Workshop on Follow-On
Biologics: Project No. P131208'' on your comment, and file your comment
online at https://ftcpublic.commentworks.com/ftc/biologicsworkshop, by
following the instructions on the web-based form. If you prefer to file
your comment on paper, mail or deliver your comment to the following
address: Federal Trade Commission, Office of the Secretary, Room H-113
(Annex X), 600 Pennsylvania Avenue NW., Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: Elizabeth Jex, Attorney Advisor,
Office of Policy Planning, Federal Trade Commission, 600 Pennsylvania
Avenue NW., Washington, DC 20580; (202) 326-3273; [email protected].
SUPPLEMENTARY INFORMATION: The Federal Trade Commission vigorously
promotes competition in the health care industry through enforcement,
study, and advocacy. Competition in health care markets benefits
consumers by helping to control costs and prices, improve quality of
care, promote innovative products, services, and delivery models, and
expand access to health care goods and services. As addressed below,
this proposed workshop is consistent with these FTC priorities.
I. Background: Follow-On Competition in Pharmaceutical Markets
In particular, the Commission has sought to protect competition
among pharmaceutical products, including generic drugs providing price
competition against brand-name drugs. Until relatively recently, the
potential for follow-on competition was limited to products involving
traditional ``small-molecule'' generic drugs. Producers of these drugs
obtain approval from the Food & Drug Administration (``FDA'') pursuant
to an abbreviated regulatory pathway established by the Hatch-Waxman
Act.\1\
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\1\ See The Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 301
et seq. (2011), as amended by the Drug Price Competition and Patent
Term Restoration Act of 1984, Public Law 98-417, 98 Stat. 1585
(codified as amended in scattered sections of 21 & 35 U.S.C.) (known
as Hatch-Waxman), and the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003, Public Law 108-173, Sec. 1112, 117
Stat. 2066, 2461-63 (codified at 21 U.S.C. 355).
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Biologic medicines have now become among the most important
pharmaceutical products in the United States. Biologics comprise the
fastest growing sector within pharmaceuticals, and target such
difficult to treat diseases as cancer, diabetes, and multiple
sclerosis.\2\ ``Biologics'' include, for
[[Page 68841]]
example, vaccines, antitoxins, blood products, proteins, and monoclonal
antibodies.\3\ Although their characteristics vary widely, ``biologics
are typically larger and more structurally complex than traditional
drugs (also known as `small-molecule' drugs).'' \4\ Thus, ``[they] are
substantially more expensive to develop, manufacture, and monitor [than
small-molecule drugs].'' \5\ Biologics generally are very expensive;
the cost of one year of treatment can range from $50,000 to $250,000,
and access to therapeutic biologics is often restricted because of
cost.\6\ Currently, biologics account for approximately 25 percent of
the $320 billion spent annually in the United States for pharmaceutical
treatments.\7\
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\2\ Health Policy Brief: Biosimilars, Health Affairs 1 (Oct. 10,
2013), http://healthaffairs.org/healthpolicybriefs/brief_pdfs/healthpolicybrief_100.pdf (``[Biologics] account for a substantial
and increasing share of the pharmaceutical market and a growing
share of health care costs'').
\3\ Id.
\4\ Id.
\5\ Id.
\6\ See id; see also IMS Institute for Healthcare Informatics,
IMS Health, The Use of Medicines in the United States: Review of
2011 (2012), http://www.imshealth.com/ims/Global/Content/Insights/IMS%20Institute%20for%20Healthcare%20Informatics/IHII_Medicines_in_U.S_Report_2011.pdf [hereinafter IMS, Use of Medicines]; IMS
Institute for Healthcare Informatics, IMS Health, Generic Drug
Savings in the U.S.: Savings $1 Trillion Over 10 Years 2 (4th ed.
2012), http://www.gphaonline.org/media/cms/IMSStudyAug2012WEB.pdf
(Study commissioned by GPhA) (``Current biologic medicine costs are
staggering, putting these lifesaving treatments out of reach for
many patients. Even after insurance coverage, co-pays can be
thousands of dollars each year. A Congressional Research Service
(CRS) study completed in 2010 showed that the cost of biologics is
often prohibitively high, both for patients and the government. The
report found that average annual costs for the rheumatoid arthritis
treatment Enbrel[supreg] was $26,000, Herceptin[supreg] for breast
cancer averaged $37,000, Humira[supreg] for Crohn's disease was more
than $51,000 per year, and the annual cost for Cerezyme[supreg] to
treat Gaucher's disease was $200,000.''); Andrew Pollack, Biotech
Firms, Billions at Risk, Lobby States to Limit Generics, N.Y. Times
(Jan. 28, 2013), http://www.nytimes.com/2013/01/29/business/battle-in-states-on-generic-copies-of-biotech-drugs.html?_r=0.
\7\ See IMS, Use of Medicines, supra note 6, at 27; Staff of
Comm. on Health Policy, Fla. S., 2013 Session, Bill Analysis and
Fiscal Impact Statement, CS/SB 732, at 3, (2013), http://www.flsenate.gov/Session/Bill/2013/0732/Analyses/FckEw94up4AYkLzGQBz3ErRA=PL=pg=%7C14/Public/Bills/0700-0799/0732/Analysis/2013s0732.hp.PDF; see also Cong. Budget Office,
Congressional Budget Office Cost Estimate: S. 1695 Biologics Price
Competition and Innovation Act of 2007, at 5 (2008), http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/94xx/doc9496/s1695.pdf [hereinafter CBO Report] (``In recent years, total
spending on biologics has grown rapidly, with nominal spending
growth averaging roughly between 15 percent and 20 percent annually;
spending amounted to about $40 billion in 2006. . . . We estimate
that by 2018 about $70 billion in national spending on biologics
could face competition by FOBs . . . .'').
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The FDA approves biologics under the Public Health Service Act
(``PHSA'').\8\ To encourage competition in the market for biologic, in
2010 Congress passed the Biologics Price Competition and Innovation Act
(``BPCIA''),\9\ which amended the PHSA to establish an abbreviated
regulatory pathway for FDA approval of follow-on biologics. The
provisions of the BPCIA differ in some respects from those of the
Hatch-Waxman Act. Still, some brief background information on the
development of generic drug competition is helpful to understand how
follow-on biologic competition may develop.
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\8\ 42 U.S.C. Sec. 262. Generally, the reference biologic is
approved by the FDA with a full Biologics License Application
pursuant to the requirements set forth under 42 U.S.C. 262(a);
whereas follow-on biologics are approved pursuant to the
requirements set forth under 42 U.S.C. 262(k).
\9\ See Biologics Price Competition and Innovation Act of 2009,
Title VII, Subtitle A, Sec. Sec. 7001-7003 of the Patient
Protection and Affordable Care Act, Public Law 111-148, 124 Stat.
119, 804-21 (2010).
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A. Competition From Generic Drugs
To facilitate follow-on competition to brand-name small-molecule
drugs, in 1984 Congress passed the Hatch-Waxman Act.\10\ This Act
created an abbreviated regulatory pathway through which safe and
effective generic drugs could obtain approval from the FDA to enter a
market without replicating all of the costly testing required for a
brand-name drug.\11\ To be approved under Hatch-Waxman, the applicant
must show that its generic drug product is ``bioequivalent'' to
(basically, as safe and effective as) the branded drug product.\12\ A
bioequivalence showing is much less expensive than the clinical testing
required to establish the safety and efficacy of a new branded drug
product.
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\10\ See note 1 supra.
\11\ ``Hatch-Waxman does not require generic applicants to
duplicate the clinical testing of drugs already proven safe and
effective. Duplication of safety and efficacy information is
costly,an inefficient use of scarce resources, and, as the FDA has
explained, raises ethical concerns associated with unnecessary human
testing.'' Fed. Trade Comm'n, Emerging Healthcare Issues: Follow-On
Biologic Drug Competition exec. summ. at ii (2009), http://www.ftc.gov/os/2009/06/P083901biologicsreport.pdf [hereinafter FTC
FOB Report].
\12\ The applicant also must meet other requirements. ``To gain
FDA approval, a generic drug must: (1) Contain the same active
ingredients as the innovator drug(inactive ingredients may vary);
(2) be identical in strength, dosage form, and route of
administration; (3) have the same use indications; (4) be
bioequivalent; (5) meet the same batch requirements for identity,
strength, purity, and quality; and (6) be manufactured under the
same strict standards of FDA's good manufacturing practice
regulations required for innovator products.'' See What are Generic
Drugs?, U.S. Food & Drug Admin., U.S. Dept. of Health & Human
Servs., http://www.fda.gov/Drugs/ResourcesForYou/Consumers/BuyingUsingMedicineSafely/UnderstandingGenericDrugs/ucm144456.htm
(last updated May 12, 2009); see also Bureau of Consumer Prot., Fed.
Trade Comm'n, Drug Product Selection (1979) [hereinafter Drug
Product Selection].
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Because the generic drug is ``bioequivalent'' to the branded drug,
it can be safely substituted for the branded drug and is expected to be
as safe and effective as the branded drug. To take full advantage of
generic competition, many states have laws that allow pharmacists
automatically to substitute a generic for a branded drug, unless a
doctor has indicated otherwise.\13\ Moreover, because an FDA-approved
generic drug has the identical active substance and is ``biologically
equivalent'' to its ``brand-name'' counterpart, the generic drug is
given the same active ingredient name as the branded drug product.\14\
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\13\ See FTC FOB Report, supra note 11, exec. summ. at i.
\14\ Generic drugs are required to have the same active
ingredient, strength, dosage form, and route of administration as
the brand name product. Generic drugs do not need to contain the
same inactive ingredients as the brand name product. 21 U.S.C.
355(j)(2)(A)(ii), (iv); Facts About Generic Drugs, U.S. Food & Drug
Admin., U.S. Dept. of Health & Human Servs., http://www.fda.gov/drugs/resourcesforyou/consumers/buyingusingmedicinesafely/understandinggenericdrugs/ucm167991.htm (last updated Sept. 19,
2012).
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Since 1984, the FDA has ``approved more than 8,000 generic drugs,
which has resulted in hundreds of billions of dollars in cost savings
to consumers.'' \15\ Overall, generic drug competition has
substantially reduced many prescription drug prices and total
prescription drug expenditures, and increased access to therapeutic
drugs for more Americans.\16\
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\15\ See Fact Sheet: New ``Biosimilars'' User Fees Will Enhance
Americans' Access to Alternatives to Biologic Drugs, U.S. Food &
Drug Admin., U.S. Dept. of Health & Human Servs., http://www.fda.gov/RegulatoryInformation/Legislation/FederalFoodDrugandCosmeticActFDCAct/SignificantAmendmentstotheFDCAct/FDASIA/ucm311121.htm (last updated
on July 16, 2012).
\16\ See FTC FOB Report, supra note 11, exec. summ. at i; See
generally Jennifer S. Haas, et al., Potential Savings From
Substituting Generic Drugs for Brand-Name Drugs: Medical Expenditure
Panel Survey, 1997-2000, 142 ANNALS INTERNAL MED. 891 (2005); Wendy
H. Schacht & John R. Thomas, Cong. Research Serv., RL33901, Follow-
On Biologics: Intellectual Property and Innovation Issues 4, 18
(2008).
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B. Competition From Follow-On Biologics
No abbreviated approval process for follow-on biologics (``FOBs'')
existed until 2010.\17\ The BPCIA created an abbreviated licensure
pathway for two types of follow-on biologics: Biosimilars and
interchangeable biological
[[Page 68842]]
products.\18\ Under the BPCIA, a ``biosimilar'' product is ``highly
similar to the reference product notwithstanding minor differences in
clinically inactive components,'' and ``there are no clinically
meaningful differences between the biological product and the [FDA-
licensed biological] reference product in terms of safety, purity, and
potency of the product.'' \19\ The BPCIA requirements for an
``interchangeable'' biologic product are more stringent. An
interchangeable biologic product is expected to produce the same
clinical result as the FDA-licensed biological reference product in any
given patient. Furthermore, for a product administered more than once,
the safety and reduced efficacy risks of switching from the reference
drug to an interchangeable drug, or alternating between the reference
drug and an interchangeable drug, cannot be greater than the risks
posed by use of the reference product without alternating or
switching.\20\
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\17\ The Hatch-Waxman Act applies only to drugs regulated under
the Federal Drug & Cosmetics Act; these drugs are generally
chemically synthesized, small-molecule products, not biologics. FTC
FOB Report, supra note 11, at 3-4, app. B-1.
\18\ 42 U.S.C. 262(k) (2011).
\19\ Sec. 262(i)(2).
\20\ Sec. 262(i)(3).
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BPCIA provides that interchangeable biologics ``may be substituted
for the reference biologic without the intervention of the health care
provider who prescribed the reference product.'' \21\ It does not
address substitution of non-interchangeable biosimilars. The FDA is
authorized to issue regulations that define the requirements for
applicants claiming ``interchangeability'' or ``biosimilar'' status,
but the agency has not finalized guidelines on these issues.\22\
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\21\ Id.
\22\ On February 9, 2013, the FDA issued three draft guidance
documents regarding Scientific Considerations, Quality
Considerations, and Q&As, and solicited public comments for the
draft guidance documents; the public comment period has now closed.
No final guidance documents have yet been issued. The Draft Guidance
included: (1) ``Scientific Considerations in Demonstrating
Biosimilarity to a Reference Product;'' (2) ``Quality Considerations
in Demonstrating Biosimilarity to a Reference Protein Product;'' and
(3) ``Guidance for Industry on Biosimilars: Q & As Regarding
Implementation of the BPCI Act of 2009.'' See Questions and Answers:
Issuance of Three Draft Guidance Documents on Biosimilar Product
Development, U.S. Food & Drug Admin., U.S. Dept. of Health & Human
Servs., http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/ApprovalApplications/TherapeuticBiologicApplications/Biosimilars/ucm291186.htm (last
updated Feb. 9, 2012); see also Fact Sheet: Issuance of Draft
Guidances on Biosimilar Products, U.S. Food & Drug Admin., U.S.
Dept. of Health & Human Servs., http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/ApprovalApplications/TherapeuticBiologicApplications/Biosimilars/ucm291197.htm (last updated Feb. 9, 2012).
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In 2009, the Commission issued a report, Emerging Healthcare
Issues: Follow-On Biologic Drug Competition (``FTC FOB Report''),\23\
which discussed the results of its November 21, 2008 workshop to
examine ``whether the price of biologics might be reduced by
competition if there were a statutory process to encourage [FOBs] to
enter and compete with pioneer biologics once a pioneer drug's patents
have expired.'' \24\ In its report, the Commission noted that the
scientific differences between biologic and small-molecule drug
products would complicate efforts to devise an approval process for
FOBs.\25\ Biologics are often three-dimensional folded proteins,
derived from living matter or manufactured within living cells using
recombinant DNA biotechnologies.\26\ They are generally more complex
and immunogenic, and more complex to manufacture, than traditional
small-molecule drugs.\27\
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\23\ See Press Release, Fed. Trade Comm'n, FTC Releases Report
on ``Follow-on Biologic Drug Competition'': Providing FDA With
Authority to Approve Follow-on Biologics Would be an Efficient Way
to Bring Them to Market, Lowering Consumers' Health Care Costs (June
10, 2009), http://www.ftc.gov/opa/2009/06/biologics.shtm.
\24\ FTC FOB Report, supra note 11, exec. summ. at i.
\25\ Id. exec. summ. at ii.
\26\ Id. at 8-9.
\27\ A biologic drug is ``immunogenic'' if it stimulates an
immune response in the patient; this can raise safety and efficacy
concerns. See Letter from Frank M. Torti, Principal Deputy Comm'r &
Chief Scientist, U.S. Food & Drug Admin., to Frank Pallone, Jr.,
Chairman, H. Subcomm. on Health 1 (Sept. 18, 2008), available at
http://step.berkeley.edu/Journal_Club/paper2_110309.pdf.
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Indeed, ``[s]mall changes in the manufacturing process can lead to
variations in the final product, which can in turn affect safety and
clinical effectiveness. Even biologics produced in the same
manufacturing facility will have some variation between lots.'' \28\ As
of 2011, FDA experts concluded that, ``for the foreseeable future,'' at
least some clinical trials would likely to be required in order to
assure the therapeutic equivalence of FOBs.\29\ Thus, compared to the
relatively inexpensive and simple abbreviated approval pathway for
generic drugs, the abbreviated pathway for biosimilars and
interchangeables will likely be expensive and time consuming.\30\
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\28\ Health Policy Brief: Biosimilars, supra note 2, at 1.
\29\ See Steven Kozlowski, Janet Woodcock, Karen Midthun &
Rachel Behrman Sherman, Developing the Nation's Biosimilar Program,
365 New Eng. J. Med. 385, 386 (2011), available at http://www.nejm.org/doi/pdf/10.1056/NEJMp1107285 (``additional animal and
clinical studies will generally be needed for protein biosimilars
for the foreseeable future, the scope and extent of such studies may
be reduced further if more extensive fingerprint-like
characterization is used.'').
\30\ FTC FOB Report, supra note 11, at 12; accord Mandy Jackson,
Pharma Recovering from Patent Cliff Before Next Hit in 2015, Scrip
Intelligence, July 5, 2013; Henry Grabowski et al., Implementation
of the Biosimilar Pathway: Economic and Policy Issues, 41 Seton Hall
L. Rev. 511 (2011); Editorial, Building a wall against Biosimilars,
31 Nature Biotech. 264 (2013), available at http://www.nature.com/nbt/journal/v31/n4/pdf/nbt.2550.pdf.
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Accordingly, the Commission's report predicted that FOB competitors
would offer less price competition to reference biologics than the
price competition generated by generic drugs to branded drugs.\31\
Nonetheless, the Commission pointed out, given the enormous costs of
biologics, even modest FOB discounts could lead to significant consumer
savings.\32\ As the Congressional Budget Office (``CBO'') has
estimated,\33\ increased FOB competition leading to lower biologics
prices could save consumers millions of dollars each year.
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\31\ The workshop proposed in this notice will consider whether
new facts require revisions to the Commission's prior predictions.
\32\ FTC FOB Report, supra note 11, exec. summ. at v; CBO
Report, supra note 7, at 5.
\33\ The CBO predicted that the BCPIA, if enacted, would
``reduce total expenditures on biologics in the United States by
$0.2 billion over the 2009-2013 period and by about $25 billion over
the 2009-2018 period.'' CBO Report, supra note 7, at 1.
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II. Workshop Topics
``Biologics are among the biggest-selling medicines today. In 2010,
seven out of the top 20 selling drugs in the U.S. were biologics.''
\34\ Currently, fourteen biosimilars are believed to be in clinical
development in the United States, but to date, no FOBs have been
approved by the FDA under the abbreviated pathway offered by the
BPCIA.\35\
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\34\ Thomas M. Burton & Jonathan D. Rockoff, FDA Sets Path for
Biotech Drug Copies, Wall St. J., Feb. 10, 2012, available at http://online.wsj.com/news/articles/SB10001424052970204642604577213143424515820.
\35\ Steven Kozlowski, Director, Office of Biotechnology
Products, U.S. Food & Drug Admin., Remarks at 11th EGA International
Symposium on Biosimilar Medicines: U.S. FDA Perspectives on
Biosimilar Development and Approval (April 26, 2013). Whether any
applications have been filed with the FDA is not public.
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As was the case with small-molecule generic drugs, the future of
FOB competition may be influenced by state laws that regulate the
substitution of biosimilars or interchangeable biologic products for
reference biologic products. The ability of FOBs to compete against
reference biologic products will also depend on whether they are
allowed to have the same nonproprietary names. The workshop will also
examine the evolution of FOB competition in the United States so far,
including possible
[[Page 68843]]
updates to information included in the FTC's 2009 FOB Report, and the
experience with FOB competition to date in Europe, Australia, and New
Zealand.
A. How State Substitution Laws May Affect the Development of FOB
Competition
Whether a follow-on pharmaceutical product is as safe and effective
as the brand-name product is a critical issue for doctors and patients
considering whether to switch from a brand-name to a follow-on
pharmaceutical product. States struggled with this issue as generic
drug competition evolved during the 1970s. At first, many state laws
prevented the substitution of generic for branded drugs. As states
began to consider whether and, if so, how to modify these laws, the FTC
also examined whether state anti-substitution laws then in effect
struck the appropriate balance between legitimate public health
concerns and free market competition.\36\
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\36\ See Drug Product Selection, supra note 12, at 1.
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The FTC Staff's report, Drug Product Selection, concluded that the
FDA approval process would result in the approval of safe and effective
generic drugs that would be therapeutically equivalent to the reference
branded drugs; therefore, the use of such drugs would not create undue
public health risks.\37\ Moreover, the FTC Staff concluded, if
pharmacists were free to dispense generic drugs without unnecessary
regulatory hurdles, generic drugs would generate price competition that
would benefit consumers.\38\
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\37\ See id. at 1.
\38\ In sum, the FTC Staff Report concluded that (1)
``antisubstitution laws impose substantial unwarranted costs on
consumers by unduly restricting price competition in the multisource
prescription drug market;'' and (2) repeal of antisubstitution laws
would ``produce significant consumer benefits without compromising
the quality of health care.'' Id. To remedy the situation and
facilitate pharmacists' use of therapeutically equivalent, but less
expensive generic drugs, the FTC Staff recommended that the states
adopt a Model Drug Product Selection Act. See Id. at 1.
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Many state legislatures reached the same conclusion and legislated
a variety of methods to encourage generic drug substitution. In
response, and to support state efforts, the FDA created the so-called
``Orange Book'' to simplify the substitution of generic drugs in the
states.\39\ According to the FDA, ``it became apparent that FDA could
not serve the needs of each state on an individual basis[, and t]he
Agency also recognized that providing a single list based on common
criteria would be preferable to evaluating drug products on the basis
of differing definitions and criteria in various state laws.'' \40\
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\39\ See FDA Approved Drug Products with Therapeutic Equivalence
Evaluations preface at iv (33rd ed. 2013), http://www.fda.gov/downloads/drugs/developmentapprovalprocess/ucm071436.pdf.
\40\ Id.
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The Orange Book now ``provide[s] a list of all prescription drug
products that are approved by FDA for safety and effectiveness, along
with therapeutic equivalence determinations for multisource
prescription products.'' \41\ The list of FDA-approved drugs has
increased by thousands, and in the United States, the FDA's Orange Book
provides critical information about drug safety, drug effectiveness,
and therapeutic equivalence determinations for multisource prescription
drug products.\42\ The availability of this resource has been critical
to enabling generic drug competition that has saved consumers billions
of dollars through lower prices.
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\41\ Id.
\42\ Id.
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Similar issues affect the adoption of FOBs. Physicians and patients
may be reluctant to switch to an FOB product because of the risk that
the patient will react differently to the new drug. In its 2009 FOB
Report, the FTC predicted that ``lingering or institutionalized
uncertainty about interchangeability and safety differences between
pioneer and FOB products'' would likely hamper FOB market
penetration.\43\
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\43\ FTC FOB Report, supra note 11, at 16.
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Recently, some state legislatures have considered, and some have
passed, laws that could affect the substitution of FOBs for biologics
and thus would have implications for the development of meaningful
competition from FOBs.\44\ Some commentors have raised concerns that
differing regulatory barriers among the states may raise costs, and
lessen incentives, to develop FOBs, thereby deterring FOB competition.
One commentor has questioned whether policymakers realize how
``constraints currently being constructed by some state legislatures''
reduce the economic rewards of introducing an FOB as compared with a
generic drug.\45\ Questions arise about the costs of complying with all
of the provisions in a variety of state laws; whether such provisions
are necessary to protect consumers; whether alternative, less
burdensome provisions might be sufficient; and whether such proposals
and laws are consistent with the standards and definitions established
pursuant to the BCPIA.\46\ The workshop will consider these and related
questions, as listed below.
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\44\ As of October 2013, five states have enacted substitution
laws that apply expressly to FOBs: Florida, North Dakota, Oregon,
Utah, and Virginia. H.B. 365, 2013 H.R., Reg. Sess. (Fla. 2013);
S.B. 2190, 63rd Leg. Assemb., Reg. Sess. (N.D. 2013); S.B. 460, 2013
Senate, Reg. Sess. (Or. 2013); S.B. 78, 60th Senate, Reg. Sess.
(Utah 2013); H.B. 1422, 2013 Gen. Assemb., Reg. Sess. (Va. 2013). In
one state, the legislature passed the bill, but the Governor vetoed
it. S.B. 598, 2013-2014 Senate, Reg. Sess. (Cal. 2013); see Andrew
Pollack, Gov. Brown of California Vetoes Biotech Drug Bill, N.Y.
Times, October 13, 2013, at B3, available at http://www.nytimes.com/2013/10/13/us/governor-vetoes-bill-to-limit-use-of-generic-drugs-in-california.html. In ten states, such efforts apparently failed:
Arkansas, Arizona, Colorado, Delaware, Illinois, Indiana, Maryland,
Mississippi, Texas, and Washington. Legislation was pending or is
pending in two states: Massachusetts and Pennsylvania. We believe
that bills died but went to study in two states: Arkansas and
Indiana. See Laura Olson, Assembly Approves Bill on `Biosimilar'
Medicines, Bloomberg Businessweek (Aug. 27, 2013), http://www.businessweek.com/ap/2013-08-27/assembly-approves-bill-on-biosimilar-medicines.
\45\ See Editorial, supra note 30, at 264 (``The question for
policymakers is whether they realize how meager the economic
advantages are likely to be of introducing a biosimilar onto the
market compared with a generic small molecule, especially under the
constraints currently being constructed by some state
legislatures.'').
\46\ There may be a federal preemption issue raised by some
state restrictions on FOB substitution by pharmacists.
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Questions Regarding State FOB Legislative Proposals and Laws
1. How would new state substitution laws passed in 2013, or similar
proposals pending in other states, affect competition expected to
develop between biosimilar or interchangeable biologics and reference
biologics? In the context of state substitution laws, what is the
likely competitive impact of a biologic product being designated
``interchangeable?''
2. What are the compliance costs associated with new state law
requirements? How are those costs likely to affect competition from
biosimilar and interchangeable biologics?
3. What are the rationales behind new state proposals and laws for
regulating FOB substitution? Which provisions are most important? Are
some provisions redundant or otherwise unnecessary?
4. Could an FDA publication concerning biologics and FOBs,
comparable to the Orange Book, provide an authoritative listing of FOBs
that are biosimilar to or interchangeable with reference biologics?
Would such a publication facilitate substitution? Would such a
publication need to be limited to interchangeable FOBs, or should it
include both biosimilar and interchangeable FOBs?
5. Does the potential for many different state laws regulating FOBs
affect the prospects for the development of FOBs? Does the answer
differ
[[Page 68844]]
between biosimilar versus interchangeable biologic products?
6. Would it be helpful to develop a model state substitution
biosimilar law? If so, what provisions should the law include? Should
state laws coordinate their guidance with provisions in the BPCIA and
guidance from FDA?
B. How Naming Conventions May Affect FOB Competition
As the FTC noted in its FOB report, an FOB's name can influence
physician and patient acceptance of the product as a substitute for the
branded biologic.\47\ ``[Institutionalized uncertainty about
interchangeability and safety differences between pioneer and FOB
products] may be heightened if the FOB product does not share the same
name as the pioneer biologic product.'' \48\
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\47\ FTC FOB Report, supra note 11, at 16-17 & n.55; see also
Stanton J. Lovenworth, The New Biosimilar Era: The Basics, The
Landscape, and the Future, 6 Life Sci. L. & Industry Rep. 972
(2012), available at http://www.omm.com/files/upload/The%20New%20Biosimilar%20Era_The%20Basics,%20the%20Landscape,%20and%20the%20Future.pdf (``A
drug's name significantly influences the degree to which it is
embraced and prescribed by health care professionals, which in turn
affects the drug's financial viability. If a biosimilar's name
matches its reference product's name, physicians likely will feel
comfortable substituting it, and pharmacy systems are more likely to
integrate the biosimilar.'')
\48\ FTC FOB Report, supra note 11, at 16.
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Branded drugs usually have two names: a brand name, sometimes
called a proprietary or trade name; and an active ingredient name,
which is a nonproprietary name. A biologic also usually has two names:
the brand name and the nonproprietary name, which reflects certain
scientific characteristics of the product, such as chemical structure
and pharmacological properties. In the United States, the FDA has the
authority to determine the nonproprietary name for a biological
product.\49\ Non-governmental organizations like the United States
Pharmacopeial Convention and the United States Adopted Name Council
also have a role in developing nonproprietary names for biological
products in the U.S.\50\
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\49\ See 21 U.S.C. 358, which provides in relevant part: ``The
Secretary [of HHS] may designate an official name for any drug or
device if he determines that such action is necessary or desirable
in the interest of usefulness and simplicity.'' See also 42 U.S.C.
262(a)(1)(B)(i).
\50\ Outside the United States, the World Health Organization
(``WHO'') administers the international naming convention known as
the International Nonproprietary Naming (``INN'') system. See
International Nonproprietary Names, World Health Org., http://www.who.int/medicines/services/inn/en/index.html (last visited Oct.
31, 2013).
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A lack of consensus exists regarding the nomenclature to use for
FOBs. At issue is whether biosimilar and interchangeable FOBs should
have the same nonproprietary name as the reference biologic. The
resolution of this issue has implications for both competition and
consumer safety. Differences in the nonproprietary name between a
biologic and FOB could affect pharmacy substitution of the FOB for the
reference biologic and might cause consumer confusion in the market. On
the other hand, some have argued that the absence of adequate ``track
and trace'' systems for biologics requires different FOB and biologic
nonproprietary names in order to gather and differentiate adverse
events caused by the use of branded biologic or FOB products.\51\ This
workshop will explore the implications of various nonproprietary naming
conventions in FOBs for the development of FOBs, FOB competition, and
consumer protection.
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\51\ See e.g., Amgen Inc., Biologics and Biosimilars 20-23
(2012), http://www.amgen.com/pdfs/misc/Biologics_and_Biosimilars_Overview.pdf (section titled ``Pharmacovigilance and
traceability''); Erika Leitzan, Laura Sim & Emily Alexander,
Biosimilar Naming: How Do Adverse Event Reporting Data Support the
Need for Distinct Nonproprietary Names for Biosimilars, 3 FDLI's
Food and Drug Policy Forum, Mar. 27, 2013. The FDA monitors drug,
biologics, and device safety through its postmarketing surveillance
system. 21 CFR Sec. Sec. 314.80, 314.98, 803.1, 803.30, 803.40,
803.50 (2013). See generally FDA Adverse Event Reporting System
(FAERS) (formerly AERS), U.S. Food and Drug Admin., U.S. Dept. of
Health & Human Servs., http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Surveillance/AdverseDrugEffects/default.htm (last updated Sept. 10, 2012). This
is a database of voluntary reporting by healthcare professionals and
consumers of adverse events associated with FDA-approved products.
The terms pharmacovigilance and track and trace systems are
industry-wide terms generally referring to the various FDA and
private mechanisms, such as a product's National Drug Code, and
manufacturers quality control and quality assurance programs, that
can be utilized during public health crisis, such as the heparin
contamination, to resolve the critical public health issues as
quickly as possible. However, these pharmacovigilance systems are
not without weaknesses and difficulties. See e.g., U.S. Gov't
Accountability Office, Food and Drug Administration: Response to
Heparin Contamination Helped Protect Public Health Controls That
Were Needed for Working With External Entities Were Needed for
Working With External Entities Were Recently Added (2010), http://www.gao.gov/assets/320/311879.pdf. FDA informed the GAO that under
the FDA's adverse event reporting system, it does not necessarily
receive a report for every adverse event that occurs. Manufacturers
are required to submit adverse event reports to FDA if known;
however, health providers and consumers are not required to do so
but submit adverse event reports on a voluntary basis. Id. at 36
n.65.
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Questions Related to the Naming of FOBs
1. What has been learned from the experience under Hatch-Waxman
about the incentives necessary to encourage physicians and patients to
switch between branded and lower cost, therapeutically substitutable
products? Do naming and name changes affect switching? If so, how?
2. How do the European Medicines Agency (``EMA'') and other
regulatory authorities comparable to the FDA handle the names of FOBs?
3. A prefix or suffix, such as ``ado'' or ``TBO'', has been
attached to the nonproprietary names of several biological products
licensed under a stand-alone biologic license application. How does the
use of such prefixes or suffixes affect the inclusion of that product
in third-party publications, compendia references, and health
information systems, such as electronic health records and prescription
processing systems?
4. How does the use of certain identifiers, such as National Drug
Codes, brand names, or nonproprietary names, work with existing adverse
event reporting, track and trace, or other pharmacovigilance systems?
5. With respect to prescription drugs, does the use of
nonproprietary names globally contribute to or detract from competition
and consumer protection? Do any studies exist to show increased or
decreased consumer benefits or harms, due to changes in names or naming
conventions?
C. How FOB Competition Has Evolved in Other Countries With Comparable
Prescription Drug Regulation Regimes, and How FOB Competition Is
Evolving in the United States
Some countries or intergovernmental organizations, such as the
European Union (``EU''), have drug regulatory approval schemes similar
to those in the United States, and have already approved biosimilars.
In the EU, for example, the EMA already has an established regulatory
pathway for biosimilars, and since 2006 has approved fifteen
biosimilars for marketing in the EU.\52\ Unlike the FDA FOB abbreviated
approval process, the EMA approval process does not contemplate
interchangeable biologics; the EMA approves only biosimilars. Several
other countries, including Australia, Canada, and Japan, have adopted
similar regulatory approaches
[[Page 68845]]
to the approval of biosimilars.\53\ Reports indicate that biosimilars
have offered price competition in various EU markets, resulting in ten
to forty percent price discounts from branded biologics pricing.\54\
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\52\ See European Comm'n, What you Need to Know about Biosimilar
Medicinal Products 9 n.11 (2013), http://ec.europa.eu/enterprise/sectors/healthcare/files/docs/biosimilars_report_en.pdf;
Lovenworth, supra note 47; Press Release, Hospira Inc., Hospira's
Inflectra (infliximab) the first biosimilar antibody to be approved
in Europe (Sept. 10, 2013), http://phx.corporate-ir.net/phoenix.zhtml?c=175550&p=irol-newsArticle&ID=1853480.
\53\ Biosimilars also exist in other countries. See e.g.,
Pharmaceutical Product Development, Developing Biosimilars Across
Emerging Markets: Clinical and Regulatory Considerations (2013),
http://www.healthtrustpg.com/biosimilars/pdf/ppd.pdf.
\54\ See European Comm'n, supra note 53, at 16. See also Health
Policy Brief: Biosimilars, supra note 2, at 2 (average price
discount on EU biosimilars is ``about 25 percent,'' and overall EU
savings by 2020 ``are projected to total $16-43 billion,'' although
level of biosimilar penetration varies substantially among EU
countries, depending on ``differences in payment systems and
policies, laws related to drug substitution, and the overall size of
the generics market within each country'').
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At the workshop, the FTC will explore the status of the development
of biosimilars in the United States. Further, the FTC will examine
other countries' experiences with the regulation and marketing of
biosimilars.\55\ The Commission will explore how biosimilar competition
has developed and the extent of biosimilar price competition, along
with related questions listed below.
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\55\ See European Comm'n, supra note 53, at 9-10 (``The EU is
the first region in the world to have set up a legal framework and a
regulatory pathway for `similar biological medicinal products', more
commonly called `biosimilars'. The EU regulatory framework inspired
many countries around the world, e.g.., Australia, Canada, Japan,
Turkey, Singapore, South Africa, Taiwan, USA etc. as well as the
World Health Organisation (WHO).''). The concept of a ``similar
biological medicinal product'' was adopted in EU pharmaceutical
legislation in 2004 and came into effect in 2005. The first
biosimilar medicine was approved by the European Commission in
2006.'') The FTC will focus on countries with regulatory approval
schemes comparable to those of the FDA.
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Questions Related to Biosimilar Competition in the United States and in
Other Countries
1. What, if any, predictions made in the FTC's 2009 FOB Report
should be revised in light of more recent data available on approved
biological products or biosimilar development programs?
2. What has been the competitive effect of the market entry of
biosimilar competitors in countries with drug regulatory approval
standards comparable to those of the U.S. FDA, such as the EU,
Australia, or New Zealand? After such entry, have reference biologic
manufacturers lowered their prices, offered discounts, engaged in
enhanced marketing activities, or increased innovation or next-
generation developments?
3. Are there empirical models that could predict the nature of U.S.
biosimilar or interchangeable biologics competition based on existing
biologic product competition in Europe, Australia, New Zealand, or
other countries? Are there empirical models that could predict the
nature of U.S. biosimilar or interchangeable biologics competition
based on existing competition in specialty drug markets? What factors
increase or detract from robust competition between reference biologic
and biosimilars or interchangeable biologics in other countries?
4. Based on the experiences in other countries, does competition
from biologics influence investments in research and development for
new biologics, improvements to existing biologics, and the timing and
rollout of new and/or improved biologics? Does the market experience
with generic drugs provide insights into these issues?
5. What data or empirical evidence exist in Europe or other
countries regarding immunogenicity or other serious adverse events, if
any, caused by substitution or switching between biosimilar and
reference biologics?
III. Request for Comment
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before March 1, 2014.
Write ``Workshop on Follow-On Biologics: Project No. P131208'' on your
comment. Your comment--including your name and your state--will be
placed on the public record of this proceeding, including, to the
extent practicable, on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the
Commission tries to remove individuals' home contact information from
comments before placing them on the Commission Web site.
Because your comment will be made public, you are solely
responsible for making sure that your comment does not include any
sensitive personal information, like anyone's Social Security number,
date of birth, driver's license number or other state identification
number or foreign country equivalent, passport number, financial
account number, or credit or debit card number. You are also solely
responsible for making sure that your comment does not include any
sensitive health information, like medical records or other
individually identifiable health information. In addition, do not
include any ``[t]rade secret or any commercial or financial information
which is obtained from any person and which is privileged or
confidential,'' as provided in Section 6(f) of the FTC Act, 15 U.S.C.
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do
not include competitively sensitive information such as costs, sales
statistics, inventories, formulas, patterns, devices, manufacturing
processes, or customer names.
If you want the Commission to give your comment confidential
treatment, you must file it in paper form, with a request for
confidential treatment, and you have to follow the procedure explained
in FTC Rule 4.9(c), 16 CFR 4.9(c).\56\ Your comment will be kept
confidential only if the FTC General Counsel grants your request in
accordance with the law and the public interest. Postal mail addressed
to the Commission is subject to delay due to heightened security
screening. As a result, we encourage you to submit your comments
online. To make sure that the Commission considers your online comment,
you must file it at https://ftcpublic.commentworks.com/ftc/biologicsworkshop, by following the instructions on the web-based form.
If this Notice appears at http://www.regulations.gov/#!home, you also
may file a comment through that Web site.
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\56\ In particular, the written request for confidential
treatment that accompanies the comment must include the factual and
legal basis for the request, and must identify the specific portions
of the comment to be withheld from the public record. See FTC Rule
4.9(c), 16 CFR 4.9(c).
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If you file your comment on paper, write ``Workshop on Follow-On
Biologics: Project No. P131208'' on your comment and on the envelope,
and mail or deliver it to the following address: Federal Trade
Commission, Office of the Secretary, Room H-113 (Annex X), 600
Pennsylvania Avenue NW., Washington, DC 20580. If possible, submit your
paper comment to the Commission by courier or overnight service.
Visit the Commission Web site at http://www.ftc.gov to read this
Notice and the news release describing it. The FTC Act and other laws
that the Commission administers permit the collection of public
comments to consider and use in this proceeding as appropriate. The
Commission will consider all timely and responsive public comments that
it receives on or before March 1, 2014. You can find more information,
including routine uses permitted by the Privacy Act, in the
Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2013-27406 Filed 11-14-13; 8:45 am]
BILLING CODE 6750-01-P