US Federal Trade Commission report examines how the price of biologic drugs could be reduced by FOB competition

The US Federal Trade Commission (FTC) has concluded that providing the US Food and Drug Administration (FDA) with the authority to approve "follow-on" biologics (FOBs) would be an efficient way to bring these lower-priced drugs to market.

The FTC examined whether the price of biologic drugs - products derived from living tissues or manufactured in living cells using recombinant DNA biotechnologies - could be reduced by competition from FOBs in its new report, "Follow-on Biologic Drug Competition".

FOBs are like generic drugs, but with significant differences. Biologics are increasingly used to treat arthritis, cancer, diabetes, and other diseases. No pathway currently exists for such FOBs to enter the market and compete with their pioneer counterparts.

"This consumer-focused competition perspective is a critically important element of the FOB debate," said commissioner Pamela Jones Harbour. "The Commission's report highlights fundamental aspects of FOB competition, as well as implications for the design of an abbreviated regulatory pathway that will bring life-saving therapies to the American public at competitive prices. I hope and expect that it will serve as a valuable reference, especially for legislators."

The other main conclusions drawn in the FTC's report about the likely impact of possible incentives to promote FOB competition are:

Patent protection and market-based pricing will promote competition by FOBs, as well as encourage 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 are likely to 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.