Follow-On Biologics Are Set Up to Fail
26 Pages Posted: 26 May 2018 Last revised: 27 Sep 2018
Date Written: April 28, 2018
In their article, “Biologics: The New Antitrust Frontier,” Michael Carrier and Carl Minniti provide a comprehensive review of the various kinds of antitrust violations that beleaguer pharmaceutical markets in the United States. Carrier & Minniti examine the applicability of these anticompetitive behaviors to biopharmaceutical (a.k.a. biologics) markets, and in doing so alert regulators and courts to such potential antitrust violations in the emerging area of follow-on biologics. Carrier & Minniti’s article also provides recommendations for limiting anticompetitive behavior in biologics markets that will, no doubt, serve as a valuable guide for regulators, judges, and practitioners. Yet, Carrier & Minniti’s article appears to share in an optimism about the prospects of such markets: that if we just policed them properly, competition could be guaranteed and, with it, prices would drop significantly. Such optimism is unwarranted.
The legislative and regulatory efforts to instill competition into biologics markets have been fraught, from their outset, with persistent and mostly successful counter-efforts by the brand-name pharmaceutical industry (“Industry”) to make follow-on biologics a limited and contained regulatory and commercial phenomenon. To that end, the Industry — with its lobbying spearheads, BIO and PhRMA — and its many allies in Congress, state legislatures, and state and federal administrations, have been waging war to maintain existing and erect new regulatory obstacles to the development, approval, and marketing of follow-on biologics. The Industry’s success in undercutting the emergence of truly competitive follow-on biologics markets thus far rests on four pillars: (1) an Industry-favorable, obstructed pathway for the approval of follow-on biologics; (2) acceptance and upholding of the view that regulatory filings submitted to the FDA are proprietary and confidential; (3) state laws making onerous the substitution of biologics with follow-on versions thereof; and (4) efforts to block any and all specific attempts to make, gain approval for, and sell follow-on biologics. Of these four pillars, the area of antitrust law (and, thus, Carrier & Minniti’s article) addresses mostly the fourth. Yet, the emergence of competitively robust follow-on biologics markets requires dismantling more than one pillar. Until then, efforts to open biologics markets to competition will continue to be no more than a rearguard battle over the approval and marketing of a small number of follow-on versions of a mere handful of original products with limited substitutability. The price, as always, will be borne by payors, patients, and ultimately, the public.
In this comment, I discuss each of the four pillars supporting the Industry’s success in inhibiting the development, approval, and marketing of follow-on biologics. I show that unlike the story of the Hatch-Waxman Act, that of the Biologics Price Competition and Innovation Act (BPCIA) does not and probably will not have a happy ending; that if the goal is to significantly lower biologics’ prices, then the paradigm of approval of follow-on biologics in the United States would need to change.
Keywords: biologics, biosimilars, pharmaceuticals, follow-on, generics, innovation, biopharmaceuticals, competition, antitrust
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