INTERESTS IN THE BALANCE: FDA REGULATIONS UNDER THE BIOLOGICS PRICE COMPETITION AND INNOVATION ACT
Recent advances in biotechnology are yielding increasingly prevalent and diverse biological products made from a variety of natural sources intended to diagnose, treat, and prevent disease. The Food and Drug Administration (FDA) continues to increase the number of biologics for which it grants approval, and biologics are being used to treat an increasing variety of conditions. Yet, Americans do not have equitable and inexpensive access to these potentially life-saving products. These products’ high prices prevent many patients from obtaining the biologic treatments they require. Many believe that these prohibitive costs are the result of weak competition from generic biologic products, also known as follow-on biologics (FOBs).
Much like the current problem facing biologics manufacturers, traditional generic pharmaceutical manufacturers struggled to compete with brand name manufacturers until Congress passed the Drug Price Competition and Patent Term Restoration Act, commonly referred to as the Hatch-Waxman Act. The Hatch-Waxman Act created an expedited pathway for FDA approval of generic pharmaceuticals. Under the Hatch-Waxman Act, generic drug manufacturers could obtain FDA approval for drugs before expiration of the associated brand name drug’s patent term and could rely on the brand name drug’s preclinical safety and efficacy testing results.
Biologic products, as opposed to traditional pharmaceuticals, were originally regulated under the Hatch-Waxman Act. However, by the early 2000’s, the difficulties associated with FDA regulation of biologic products had evinced the need for legislation dedicated specifically to FOBs. First, reference product and FOB manufacturers disagree over whether biologic products’ inherent complexity compared to traditional pharmaceuticals should require FOB manufacturers to conduct expensive clinical trials to prove their products’ safety and potency. Second, reference product and FOB manufacturers disagree on the extent to which reference products should be afforded exclusivity to recoup their front-end investment in innovative products. Third, FOB manufacturers fear that brand name biologics manufacturers may engage in “evergreening,” an anti-competitive strategy whereby manufacturers strategically alter their brand name drugs to eliminate demand for FOBs. Fourth, critics argue that, unlike traditional pharmaceuticals, biologics should not be interchangeable with one another due to safety concerns, while supporters believe that interchangeability and automatic pharmacy substitution are essential to increasing FOB competition.
Three specific provisions within the Biologics Price Competition and Innovation Act (BPCIA) were designed to address the regulatory and policy concerns associated with an abbreviated biologics approval pathway: exclusivity, biosimilarity, and interchangeability. Throughout the BPCIA’s legislative history, Senators and Representatives proposed eight major bills, nine amendments, and numerous discussion drafts, all with different provisions on exclusivity, biosimilarity, and interchangeability.
It is important to track the evolution of biosimilarity, interchangeability, and exclusivity provisions throughout the BPCIA’s legislative history and distill Congress’ intent to balance reference product sponsors’ interest in protecting their investments and consumers’ and FOB manufacturers’ interest in bringing less expensive competing biological products to market. Yet, the BPCIA alone is not enough. As it stands, the limited entry of competing FOBs in conjunction with the significant costs incurred by companies in the manufacture of both brand name and follow-on biologics make significant price reductions for biologic products under the BPCIA unlikely. Because the biologics market is likely to remain hostile to FOB market entry even after the BPCIA’s enactment, it is imperative that the FDA promulgates regulations designed to facilitate strong FOB competition while maintaining incentives for brand name manufacturers to produce innovative biologic products.
This Comment analyzes the BPCIA’s legislative history and identifies the extent to which Congress intended the Act’s biosimilarity, interchangeability, and exclusivity provisions to protect reference product versus FOB interests. Part II provides an overview of biologics and their increasing use. Part III reviews how the Hatch-Waxman Act was enacted to deal with the inherent conflict between a need for brand name patent protection and a need for generic competition in the traditional pharmaceutical sector. Part IV introduces the major practical and policy issues driving biologics legislation. Part V details the BPCIA’s legislative history and highlights crucial differences between proposed versions of the Act, and Part VI details the provisions of the BPCIA. Part VII then extracts Congress’ intent in enacting the BPCIA’s specific provisions and proposes regulations through which the FDA can most cogently effectuate Congress’ intent.