[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